BILL ANALYSIS 1
1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
MARTHA M. ESCUTIA, CHAIRWOMAN
SB 850 - Escutia Hearing Date:
April 5, 2005 S
As Amended: March 30, 2005 FISCAL B
8
5
0
DESCRIPTION
Current law declares that it is state policy to:
Encourage the development and deployment of new
technologies and the ubiquitous availability of
state-of-the-art services;
Assist in the bridging of the digital divide by
encouraging expanded access to state-of-the-art
technologies for rural, inner-city, low-income and disabled
Californians;
Promote economic growth, job creation, and the
substantial social benefits that result from the rapid
implementation of advanced information and communications
technologies.
This bill finds that the President of the United States has
declared that the country should have universal, affordable
broadband access by 2007.
This bill requires the California Public Utilities Commission
(CPUC) to determine the availability, and level of competition
in the provision, of two-way broadband access by census track by
July 1, 2006.
This bill requires California's Chief Information Officer to
develop a broadband deployment strategy for the state.
BACKGROUND
California has a long-standing policy of encouraging the
deployment and use of advanced telecommunications services,
including high-speed, or broadband, services. Examples of
broadband service include DSL service as offered by SBC and
Verizon, and cable modem services. SB 1563 (Polanco: Chapter
674, Statutes of 2002) required the CPUC to look at ways of
encouraging the widespread availability of broadband
infrastructure. In response the CPUC has issued a draft report
on broadband deployment in California.<1> Among the
recommendations are making broadband deployment and
accessibility a priority, in the form of an Executive Order or
statute, creating a Broadband Task Force, and integrating
broadband capabilities into the way the state performs its
functions.
Unsurprisingly California leads the nation in broadband lines
with 4.7 million such lines in use, almost double the next
leading state, New York. Broadband use in California has grown
rapidly, over 500% from 2000 to 2004. There is good reason for
this growth. From surfing the internet to downloading music to
improving access to health care, broadband access is useful.
Many studies conclude that more broadband accessibility will
increase economic growth and job creation.<2> Broadband access
is necessary for communities to compete for jobs.<3> Even the
President has noted that broadband technology will enhance our
nation's economic competitiveness and help improve education and
health-care for all Americans.
The Digital Divide refers to the widely varying use of computers
and the internet by different segments of society. African
Americans and Latinos consistently use these technologies less
than Whites and Asians, even accounting for income differences.
Bridging the Digital Divide has two components. The first is
making broadband service available for those who wish to use it.
The second is encouraging use. This bill deals with the first
of those components.
---------------------------
<1> California Public Utilities Commission, Draft Report:
Broadband Deployment in California , February 1, 2005.
<2> See, for example, Corporation for Education Network
Initiatives in California (CENIC), One Gigabit or Bust
Initiative: A Broadband Vision for California , May 2003. CENIC
commissioned a study by the Gartner Group which forecast an
almost $400 billion increase in gross state product and 2
million additional jobs if CENIC's broadband initiative were
implemented.
<3> Great Valley Center, Public Policy Roadmap for Improving
Broadband Access , December 2003.
COMMENTS
1) Developing a Strategy -- Encouraging the deployment of
broadband services will require leadership at the state
level. The Legislature initially tasked the CPUC with this
role, the result of which is the CPUC's broadband report.
But however useful the CPUC's effort, it is limited by the
CPUC's jurisdiction. The CPUC has regular dealings and
daily contact with regulated telecommunications companies.
This informs and influences, but also limits, the CPUC's
world view. Moreover, because the CPUC is a regulatory
agency, many companies actively avoid contact with the CPUC
for fear, justifiable or not, that the CPUC will regulate
them. And because the CPUC's responsibilities focus them
on suppliers of broadband, the CPUC has little
understanding of the demand for broadband.
For these reasons the state may obtain a deeper, more
comprehensive and creative broadband analysis if a state
official, such as the Chief Information Officer, that does
not have any regulatory authority, is tasked with
developing a broadband strategy. This analysis is enhanced
because the CIO would have a full grasp of the various
state communications networks that could be offered up in
public/private partnerships. Moreover, the CIO would have
full knowledge of the state demand for broadband services
which could be used to provide the initial demand necessary
to justify private-sector investment in broadband
infrastructure.
2) Where Do We Stand? -- The requirement to map the
availability of broadband service is necessary to
understand where the problem of the lack of broadband
access or broadband competition exists, according to the
author. Understanding where broadband capability is
lacking will help sharpen the formulation of policy
solutions, and will help individual regions or cities with
their planning. This bill requires the CPUC to map the
availability of broadband service. It does not require
broadband service providers to disclose their future plans
for broadband deployment.
The CPUC's broadband report maps broadband availability by
zip code. The shortcoming of the CPUC's approach is that
it is too broad. It assumes an entire zip code has
broadband access even if there is only one customer in the
zip code with such access. It also does not distinguish
between one-way (i.e. receive) and two-way (i.e. send and
receive) broadband availability. And, zipcodes are perhaps
too big an area to be useful.
POSITIONS
Sponsor:
Author
Support:
California Community Technology Policy Group
Oppose:
None on file
Randy Chinn
SB 850 Analysis
Hearing Date: April 5, 2005