BILL NUMBER: SB 1276 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 16, 2004
AMENDED IN ASSEMBLY JUNE 9, 2004
AMENDED IN SENATE APRIL 1, 2004
INTRODUCED BY Senator Bowen
FEBRUARY 13, 2004
An act to amend Section 739.3 of the Public Utilities Code,
relating to telecommunications.
LEGISLATIVE COUNSEL'S DIGEST
SB 1276, as amended, Bowen. Telecommunications: telephone
service rates.
Existing law, the federal Telecommunications Act of 1996,
establishes a program of cooperative federalism for the regulation of
telecommunications to attain the goal of local competition, while
implementing specific, predictable, and sufficient federal and state
mechanisms to preserve and advance universal service, consistent with
certain universal service principles. The universal service
principles include the principle that consumers in all regions of the
nation, including low-income consumers and those in rural, insular,
and high cost areas, should have access to telecommunications and
information services, including interexchange services and advanced
telecommunications and information services, that are reasonably
comparable to those services provided in urban areas and that are
available at rates that are reasonably comparable to rates charged
for similar services in urban areas. The act authorizes states to
adopt regulations not inconsistent with Federal Communications
Commission rules to preserve and advance universal service. The act
requires that every telecommunications carrier that provides
intrastate telecommunications services contribute, on an equitable
and nondiscriminatory basis, in a manner determined by the state, to
the preservation and advancement of universal service in that state.
The act authorizes each state to adopt regulations to provide for
additional definitions and standards to preserve and advance
universal service within the state, only to the extent that they
adopt additional specific, predictable, and sufficient mechanisms
that do not rely on or burden federal universal service support
mechanisms.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations.
Existing law authorizes the commission to fix just and reasonable
rates and charges. Existing law, until January 1, 2005, requires the
commission to develop, implement, and maintain a program to
establish a fair and equitable local rate structure designed to
reduce any disparity in rates charged by small independent telephone
corporations serving rural and small metropolitan areas, and a
competitively neutral, and broadbased program to provide for transfer
payments to telephone corporations serving areas where the cost of
providing services exceeds rates charged by providers, as determined
by the commission. Pursuant to this requirement, the commission has
imposed a surcharge to intrastate telephone service to fund the
transfer payments.
This bill would extend this program until January 1, 2009. By
extending the program, the bill would result in a change in state
taxes for the purpose of increasing state revenues within the meaning
of Section 3 of Article XIII A of the California Constitution, and
thus would require for passage the approval of2/3 of the membership
of each house of the Legislature.
The bill would require the commission by January 1, 2006, to
conduct a review of the program, as extended by the bill, for the
establishment of a fair and equitable local telephone rate support
structure, and a review of the California High-Cost Fund-B
Administrative Committee Fund, to accomplish an adjustment of subsidy
payments to reflect updated operating costs and an evaluation of
whether subsidy levels can be reduced while maintaining the goals of
the program.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 739.3 of the Public Utilities Code is amended
to read:
739.3. (a) The commission shall develop, implement, and maintain
a suitable program to establish a fair and equitable local rate
structure aided by transfer payments to small independent telephone
corporations serving rural and small metropolitan areas. The purpose
of the program shall be to promote the goals of universal telephone
service and to reduce any disparity in the rates charged by those
companies.
(b) For purposes of this section, small independent telephone
corporations means those independent telephone corporations serving
rural areas, as determined by the commission.
(c) The commission shall develop, implement, and maintain a
suitable, competitively neutral, and broadbased program to establish
a fair and equitable local rate support structure aided by transfer
payments to telephone corporations serving areas where the cost of
providing services exceeds rates charged by providers, as determined
by the commission. The commission shall develop and implement the
program on or before October 1, 1996. The purpose of the program
shall be to promote the goals of universal telephone service and to
reduce any disparity in the rates charged by those companies. The
commission shall structure the program required by this subdivision
so that the amount of each transfer payment reasonably equals the
value of the benefits of universal service to the transferor entity
and its subscribers. Except as otherwise explicitly provided, this
subdivision does not limit the manner in which the commission
collects and disburses funds, and does not limit the manner in which
it may include or exclude the revenue of transferring entities in
structuring the program.
(d) The commission shall investigate subsidy reduction, or
elimination of subsidies in service areas with demonstrated
competition.
(e) Not later than February 1, 2001, the Legislative Analyst shall
conduct a review of the state's universal telephone service program,
including subsequent modifications as appropriate, and report to the
Governor and the Legislature as part of the Legislative Analyst's
analysis of the Budget Bill to be issued in February 2001. In
evaluating the program, the Legislative Analyst shall consider all of
the following:
(1) The findings of the report required by subdivision (e).
(2) An assessment of whether any identified problems are issues
that affect the continued implementation of this chapter or issues
that warrant revisions of statutes or regulations.
(f) This section shall remain in effect until January 1, 2009, and
as of that date is repealed, unless a later enacted statute that
becomes effective on or before January 1, 2009, deletes or extends
that date.
SEC. 2. The Public Utilities Commission shall, by January 1, 2006,
conduct a review of the program established pursuant to subdivision
(c) of Section 739.3 of the Public Utilities Code and of the
California High-Cost Fund-B Administrative Committee Fund, to
accomplish both of the following:
(a) Adjust subsidy payments to reflect updated operating costs.
(b) Determine whether the subsidy program should be reduced if the
affected telephone corporation earns more than the market-based rate
of return.
(b) Evaluate whether subsidy levels can be reduced while still
meeting the goals of this program.