BILL NUMBER:  AB 1825
  VETOED	DATE: 09/29/2000




SEP 29 2000

I am returning Assembly Bill 1825 without my signature.

This bill expands the California High-Cost fund program to fund a
grant program within the California Public Utilities Commission for
rural telecommunications infrastructure.  It provides grants to
community-based organizations to construct telecommunications
infrastructure in rural areas that are currently not served by a
telecommunications carrier.  The bill sunsets the grant program on
January 1, 2006.

For public safety, health, and convenience reasons, all Californians
should have access to reliable local telephone service.  Regrettably,
topography and fiscal concerns prohibit providing telephone service
to every Californian.

The intent of AB 1825 is good.  It seeks to provide telephone service
to remote, low-income communities.  Unfortunately, it has the
potential to hurt all high-cost areas of the state.  By diverting up
to $10 million a year from the California High Cost Funds, it could
cause other rural ratepayers to see increases in their telephone
bills.  The High Cost Funds provide subsidies to small and mid-sized
telephone companies to keep telephone rates affordable for rural
telephone consumers.  If funds are diverted to pay for a new grant
program, existing payments could be jeopardized.

Sincerely,



GRAY DAVIS