BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


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          |SENATE RULES COMMITTEE            |                   SB 720|
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                              UNFINISHED BUSINESS


          Bill No:  SB 720
          Author:   Bowen (D) and Alarcon (D)
          Amended:  8/18/03
          Vote:     21

           
           SENATE ENERGY, U.&C. COMMITTEE  :  8-1, 4/8/03
          AYES:  Bowen, Morrow, Alarcon, Battin, Dunn, Murray, Sher,  
            Vasconcellos
          NOES:  McClintock

           SENATE FLOOR :  34-1, 5/8/03
          AYES:  Aanestad, Ackerman, Alpert, Ashburn, Battin, Bowen,  
            Brulte, Burton, Cedillo, Chesbro, Denham, Ducheny,  
            Escutia, Figueroa, Florez, Hollingsworth, Karnette,  
            Knight, Kuehl, Machado, Margett, McPherson, Morrow,  
            Murray, Oller, Ortiz, Perata, Poochigian, Romero, Scott,  
            Sher, Soto, Speier, Torlakson
          NOES:  McClintock
          NO VOTE RECORDED:  Alarcon, Dunn, Johnson, Vasconcellos,  
            Vincent

           ASSEMBLY FLOOR  :  54-25, 9/4/03 - See last page for vote


           SUBJECT  :    Telecommunications services

           SOURCE  :     Author


           DIGEST  :    This bill provides for payment of installation  
          costs and discounts for use of high speed Internet services  
          for schools, libraries, community-based organizations, and  
          hospitals owned by cities or counties.  This bill also  
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          clarifies that advanced telecommunications services  
          includes high speed communications services such as digital  
          subscriber line (DSL) services for the purposes of the  
          California Teleconnect Fund.

           Assembly Amendments  add the provisions authorizing use of  
          special funds for installation costs.  As it left the  
          Senate, the bill only clarified that DSL service is  
          eligible for California Teleconnect Fund (CTF) discounts.

           ANALYSIS  :    Current law establishes the policy of  
          "universal telephone service."  Current regulations provide  
          for the CTF, which provides discounted telephone service to  
          schools, libraries, health care institutions, and  
          community-based organizations.

          This bill clarifies that DSL service is among the services  
          eligible for CTF discounts.

          This bill authorizes the Public Utilities Commission-using  
          any unencumbered California Teleconnect Funds (CTF) from  
          the 2003-04 and 2004-05 Budget Act appropriations-to make  
          one-time expenditures of up to $3 million to cover up to an  
          additional 40 percent of the installation costs of advanced  
          telecommunications service (such as DSL) for schools,  
          libraries, or non-profit community technology programs  
          without access to such service. 
           
          Comments
           
          California has a long history of encouraging the widespread  
          deployment of telecommunications service.  A number of  
          programs exist to subsidize telephone service in rural  
          areas, for the deaf and handicapped, and for the poor.  One  
          of those programs is the CTF, which derives revenues from a  
          0.31 percent surcharge on telephone bills, provides a  
          discount on telephone service to schools, libraries,  
          community-based organizations, and hospitals, including a  
          50 percent discount for installation costs. SB 1863  
          (Bowen)-Chapter 308/Statutes of 2002 codified the language  
          upon which the CTF is based. There is a currently a balance  
          in the CTF exceeding $200 million. The 2003-04 budget  
          appropriates $40 million from the CTF and transfers $150  
          million from the fund into to the General Fund as a loan. 







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          The author indicates that 16 percent of schools and 21  
          percent of school district offices do not have high speed  
          access to the internet, and that a primary reason for this  
          is the installation  cost. The author argues that, while  
          the CTF provides a 50 discount for installation costs, this  
          is insufficient for some less well-to-do schools. The  
          author believes that authorizing the PUC to provide an  
          additional, incremental discount of up to 40 percent of  
          installation costs (up to a 90 percent total discount),  
          using up to $3 million of unencumbered CTF funds over the  
          next two years, will make a difference for such  
          institutions.

          The CTF is intended to provide discount access to advanced  
          communications services.  This bill clarifies that advanced  
          communications services include DSL.  DSL provides a fast  
          connection that is useful when accessing the Internet.   
          There are approximately 1.4 million DSL lines in  
          California, with approximately one in ten homes and  
          businesses having DSL.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  9/4/03)

          California Community Technology Policy Group
          California County Superintendents Educational Services  
          Association
          Cisco Systems
          Digital California Project (of the Corporation for Network  
             Education Initiatives in California)
          Monterey Peninsula College
          Pomona Unified School District
          SBC
          Ventura County Superintendent of Schools Office  
             (Information Technology Services)


           ASSEMBLY FLOOR  : 
          AYES:  Benoit, Berg, Bermudez, Calderon, Campbell,  
            Canciamilla, Chan, Chavez, Chu, Cogdill, Cohn, Corbett,  
            Correa, Diaz, Dutra, Dymally, Frommer, Garcia, Goldberg,  







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            Hancock, Jerome Horton, Jackson, Kehoe, Koretz, Laird,  
            Leno, Levine, Lieber, Liu, Longville, Lowenthal, Maddox,  
            Maldonado, Matthews, Montanez, Mullin, Nakano, Nation,  
            Negrete McLeod, Nunez, Oropeza, Parra, Pavley, Reyes,  
            Richman, Ridley-Thomas, Salinas, Simitian, Steinberg,  
            Vargas, Wiggins, Wolk, Yee, Wesson
          NOES:  Aghazarian, Bates, Bogh, Cox, Daucher, Dutton,  
            Harman, Haynes, Shirley Horton, Houston, Keene, La Malfa,  
            La Suer, Leslie, Maze, McCarthy, Mountjoy, Nakanishi,  
            Pacheco, Plescia, Runner, Samuelian, Spitzer, Strickland,  
            Wyland


          NC:mel  9/5/03   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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