BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1712|
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THIRD READING
Bill No: SB 1712
Author: Polanco (D)
Amended: 5/9/00
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 9-1, 4/25/00
AYES: Bowen, Brulte, Hughes, Kelley, Murray, Peace, Solis,
Speier, Vasconcellos
NOES: Mountjoy
NOT VOTING: Alarcon
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Universal telephone service
SOURCE : Author
DIGEST : The bill directs the Public Utilities Commission
to initiate an investigation and open a proceeding to
examine the current and future definitions of universal
telephone service. Such an investigation would commence on
or before February 1, 2001 and be completed and reported to
the Legislature on or before January 1, 2002.
ANALYSIS : Current law establishes a lifeline telephone
service program which provides discounted basic telephone
service rates for low-income telephone customers.
This bill adds findings and declarations stating it's the
intent of the Legislature that the California Public
Utilities Commission (CPUC) redefine universal telephone
CONTINUED
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service by incorporating two-way voice, video, and data
service as components of basic service.
This bill requires the CPUC, by February 1, 2001, to open
an investigation into the definition of universal service.
The purpose of the proceeding is to examine current and
future definitions of universal service, seek input through
public hearings from a wide cross section of providers,
users and state agencies while adhering to specified
objectives, and report its findings and recommendations
consistent with stated policies and principles. The report
shall be completed and the results provided to the
Legislature by January 1, 2002.
Background
One of the cornerstones of state and federal
telecommunications policy is universal service, which is
designed to ensure basic telephone service is made
available to people irrespective of their location and
income. California enacted the Moore Universal Telephone
Service Act in 1987 to provide discounts to low-income
customers to allow them to be able to afford basic
telephone service. "Basic telephone service" includes all
the services included in the basic telephone rate, such as
a directory listing, 911 access, and local calling, but
does not include toll calls or optional services such as
call waiting.
AB 3643 (Polanco), Chapter 278, Statutes of 1994, required
the CPUC to, among other things, develop a process to
periodically review and revise the definition of basic
service to reflect new technology and markets. The CPUC
recommended that it review the basic service definition
every three years and consider the following three factors:
1.Is the service essential for participation in society?
2.Do a majority of residential customers subscribe to the
service?
3.Will the benefits of adding the service to basic service
exceed the costs?
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The Senate Education Committee, in conjunction with the
Senate Education Committee and the Senate Select Committee
on Economic Development has held three hearings on issue of
the "digital divide" this year. Over the course of those
hearings, it's become clear to many that the solution to
the digital divide problem involves a combination of
providing computers, software, training, mentoring, and
telecommunications capability in an environment which
encourages exploration and experimentation.
Simply providing computers has proven to be an incomplete,
and sometimes wasteful, solution because users must be
trained on how to set up and use the computers, be mentored
on how to find useful information, and be provided with
ongoing technical support.
This bill is an effort to address one of the components of
the "digital divide" problem -- the lack of affordable
access to high-speed Internet access.
While high-speed service may not be affordable when
compared to basic telephone service, there's some evidence
that the competitive forces of the marketplace are working
to make it more affordable. With both cable companies and
telecommunications companies offering a high speed service
known as "digital subscriber line," or DSL, prices have
come down quickly. For example, Pacific Bell first
introduced DSL in 1998 for $89/month, but that service now
goes for $39/mo. A new method of offering DSL, known as
"line-sharing," holds promise for even cheaper and more
widespread availability of the service. Last year, the
Legislature passed and the Governor signed AB 991 (Papan),
(Chapter 714, Statutes of 1999), which enacted the
California High Speed Internet Access Act of 1999 and
required the CPUC to implement line-sharing as soon as the
Federal Communications Commission permits states to put it
into place.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/16/00)
Pacific Bell
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NC:sl 5/17/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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