In 2007, the CPUC created the California Advanced Services Fund (CASF) to help promote the deployment of broadband infrastructure in unserved areas of the state. Assembly Bill (AB) 1262 would require that of the moneys collected for the CASF on and after a specified date, a specified amount is to be deposited into the Rural and Urban Regional Broadband Consortia Grant Account and used for specified purposes and a specified amount is to be deposited into the Broadband Infrastructure Revolving Loan Account and used for specified purposes.
STATUS: 04/20/2015 From ASSEMBLY Committee on UTILITIES AND COMMERCE: Do pass to Committee on APPROPRIATIONS.
SUMMARY: This bill modifies existing limits on funds allocated into from the California Advanced Services Fund (CASF) to the Rural and Urban Regional Broadband Consortia Grant Account and the Broadband Infrastructure Revolving Loan Account, as specified. Specifically, this bill:
a) Increases an existing $10 million limit to $15 million for monies collected for the CASF for and allocated to the Rural and Urban Regional Broadband Consortia Grant Account.
b) Decreases and existing $15 million limit to $10 million for monies collected for the CASF and allocated to the Broadband Infrastructure Revolving Loan Account.
EXISTING LAW:
1) Establishes the CASF in the State Treasury, and requires that monies in those funds are the proceeds of rates and held in trust for the benefit of ratepayers, and to compensate telephone corporations for their costs of providing universal service, and expended only to accomplish specified telecommunications universal service programs, upon appropriation in the annual Budget Act or upon supplemental appropriation. (Public Utilities Code Section 270)
2) Requires the California Public Utilities Commission (CPUC) to develop, implement, and administer the CASF to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation, and substantial social benefits of advanced information and communications technologies, as provided in specific decisions of the CPUC and in the CASF statute. (Public Utilities Code Section 281)
3) Requires that $190 million, collected by a surcharge authorized by the CPUC, after
January 1, 2011, is to be deposited into the Broadband Infrastructure Account. (Public Utilities Code Section 281)
4) Requires that $10 million, collected by a surcharge authorized by the CPUC, after January 1, 2011, is to be deposited into the Rural and Urban Regional Broadband Consortia Grant Account. (Public Utilities Code Section 281)
5) Require that $15 million, collected by a surcharge authorized by the CPUC, after January 1, 2011, to be deposited into the Broadband Infrastructure Revolving Loan Account. (Public Utilities Code Section 281)
6) Requires the CPUC to transfer to the Broadband Public Housing Account $20 million from the Broadband Infrastructure Grant Account and $5 million from the Broadband Revolving Loan Account. Any moneys in the Broadband Public Housing Account that have not been awarded by December 31, 2016, shall be transferred back to the Broadband Infrastructure Grant Account and Broadband Infrastructure Revolving Loan Account in proportion to the amount transferred from the respective accounts. (Public Utilities Code Section 281)
7) Authorizes the CPUC to collect an additional sum not to exceed $215 million after January 1, 2011, for a sum of total moneys collected through the surcharge not to exceed $315 million. (Public Utilities Code Section 281)
8) Authorizes the CPUC to collect the additional sum through the 2020 calendar year. (Public Utilities Code Section 281)
9) Requires the CPUC to give priority to projects that provide last-mile broadband access to households that are unserved by an existing facilities based broadband provider. (Public Utilities Code Section 281)
COMMENTS:
1) Author's Statement: "The [CASF] was created to encourage deployment of high-quality advanced communications services to all Californians that will promote economic growth, job creation, and substantial social benefits of advanced information and communications technologies. . . As work continues to progress in achieving greater broadband expansion, it is imperative to continue the state's commitment to help ensure universal access to basic telecommunications services, such as broadband. Unfortunately, [the Rural and Urban Regional Broadband Consortia Grant Account] is about to be exhausted. Therefore, if further monies are not available, many rural consortia will no longer be able to provide the appropriate broadband educational service nor assist in preparing applications for CASF grants."
2) Background: In 2007, the CPUC created the CASF to help promote the deployment of broadband infrastructure in unserved areas of the state. SB 1193 (Padilla) Chapter 393, Statutes of 2008, statutorily established the CASF and gave the CPUC authority to assess a surcharge on communication service ratepayers (wireline, wireless, and voice over internet protocol customers) receiving intrastate telecommunication services to fund the program. Beginning in April 1, 2014, the CPUC increased the surcharge from 0.164% to 0.464%.
In 2009, the CPUC revised the CASF program to allow more California companies to use CASF grants as a match to receive federal funds through broadband grants offered through the American Reinvestment and Recovery Act of 2009. In 2010, SB 1040 (Padilla) Chapter 317, Statutes of 2010, expanded the program by authorizing telecommunications carriers to collect an additional $125 million. Furthermore, SB 740 (Padilla) Chapter 522, Statutes of 2013, further expanded CASF eligibility to any commercial provider of broadband access, or any nonprofit entity, including government entities or community anchor institutions that elect to provide facilities based broadband service, prioritized projects that provide last-mile broadband access to households that are unserved by an existing facilities based broadband provider, and specified a goal for the CASF to approve funding for infrastructure projects that will provide broadband access to no less than 98% of California households by December 31, 2015.
3) Unserved vs. underserved: The CPUC authorizes CASF grants for projects in both unserved and underserved areas, with priority going to unserved areas. An unserved area is an area where no broadband service is available, (except through dial-up or satellite service). The CPUC defines an underserved area as an area where broadband service is slower than 6Mbps/1.5Mbps. The Federal Communication Commission (FCC) defines underserved as slower than 4Mbps/1Mbps. The CPUC prioritized CASF expenditures to unserved areas where no facilities based provider offered broadband service, followed by underserved areas where no facilities based providers offered broadband service at specific speeds.
4) CASF accounts: The CASF has a total authorized funding of $315 million to be collected in surcharges through 2020. CASF grantees can receive a grant and loan simultaneously for a proposed project. The maximum grant is limited to 60% of the total project cost in unserved and 70% in underserved areas. Financing is limited to 20% of the project cost. The remaining funds are to be provided by the local broadband service provider, provided the CPUC has determined eligibility. As of December 31, 2014, the CASF has collected approximately $199 million of which approximately $85 million is still remaining in the fund. Funding is allocated to four CASF accounts.
* Broadband Infrastructure Grant Account (Infrastructure Account) funds the capital costs of broadband infrastructure projects in unserved and underserved areas in California. Local government projects are limited to unserved households or businesses. Carriers eligible to apply for a grant award must hold a certificate of public convenience and necessity or Wireless Identification Registration from the CPUC. CASF funding is also available to non-telephone corporations which are facilities based broadband service providers.
* Rural and Urban Regional Broadband Consortia Grant Account (Consortia Grant Account) provides funding for the cost of broadband deployment activities, other than the capital cost of facilities. Eligible recipients include, but is not limited to local and regional governments, public safety, K-12 education, health care, and community-based organizations.
* Broadband Infrastructure Loan Account (Revolving Loan Account) supplements financing for projects also receiving CASF grant funding. Up to 20% of total project cost is eligible for financing. Applicant and project eligibility is the same as the Infrastructure Grant Account.
* Broadband Public Housing Account (Housing Account) supports projects to deploy local area networks and to increase adoption rates in publicly supported housing communities.
5) Senate Bill 1040 (Padilla) Chapter 317, Statue of 2010: SB 1040 (Padilla), authorized additional funds for the CASF and designated separate accounts within the CASF. The bill established the Consortia Grant Account and the Revolving Loan Account. These two accounts are intended to address the needs unmet under the originally established CASF program. The Consortia Grant Account is designed to authorize the CASF to award a small amount of total CASF moneys to eligible consortia for costs other than broadband infrastructure, such as the collection and analysis of market data, regional demand aggregation, and engaging civic leaders and stakeholders to submit cost-effective applications for CASF and other grants. Furthermore, the Revolving Loan Account was created to provide supplemental financing for projects also applying for CASF grant funding so that projects are more likely to be financially feasible and move forwards. CASF applicants may obtain loans of up to 20% of a project's cost, with a maximum of $500,000.
6) Creation of the Broadband Public Housing Account: In 2013, the legislature passed
AB 1299 (Bradford) Chapter 507, Statutes of 2013, which created the Housing Account, within the CASF, and required the CPUC to fund grants for the deployment and adoption of broadband services in publicly supported housing communities. The bill provided $25 million in CASF funding for the Housing Account by transferring $5 million from the Revolving Loan Account and $20 million from the Infrastructure Account. The CPUC has until December 31, 2016 to award the moneys available for Public Housing grants. Any remaining funds after December 31, 2016, is to be transferred back in proportion to the two accounts. Hence, the current funding for each CASF account is as follows:
*Broadband Infrastructure Grant Account: $270 million,
*Broadband Infrastructure Revolving Loan Account $10 million,
*Rural and Urban Regional Broadband Consortia Grant Account $10 million, and
*Broadband Public Housing Account $25 million.
7) Revolving Loan Account vs. Consortia Grant Account: Since its inception in 2012, the Revolving Loan Account has been undersubscribed to. To date, the CPUC has awarded $126,624 in loans for three infrastructure projects submitted on the February 1, 2013 application deadline. With new applications being accepted starting in December 1, 2014, as of April 9, 2015, the CPUC has received 12 applications all applying for infrastructure grants only. In contrast, the CPUC has awarded a total of $9.26 million in grant funding for 16 consortia groups with only around $250,000 remaining in the Consortia Account for new consortia projects or grants around the state. In 2015, 13 of the 16 consortia will have exhausted their funding and will cease to continue broadband deployment activities under the original CASF grant. Only three consortia groups have approved CASF grant funding through June 2016.
This bill would allot an additional $5 million to be used for the Consortia Account, increasing its total allotment to $15 million, and decrease the allotment for the Revolving Loan Account by $5 million, therefore reducing the Revolving Loan Account total allotment to $5 million. Instead of viewing each account as a pot of money that sits in the account until it is spent, the maximum funding for each account should be viewed as the maximum amount of funds that the CPUC can use for the specific purpose designated by each account. Hence, this is not a transfer from one account to another. Instead, this bill authorizes the CPUC to spend an additional $5 million for Consortia Grant projects and $5 million less for revolving loans. By also decreasing the total allotment that can be used for the Revolving Loan Account, the total amount the CPUC is allowed to collect for the CASF remains unchanged at $315 million to be collected by 2020, but not to exceed $25 million per year.
8) Arguments in support: According to the Kern, West Kern, and Yuba community college districts, "community colleges districts often form part of the consortia, are valuable resources in reaching out to local communities, and are best situated to comment on the needs of the area. [...] Without the $5 million transfer that this bill provides the Grant Account would no longer be able to provide any funds to important infrastructure projects and consortia. This would mean that there would be limited improvements in broadband access that would leave these rural areas, as well as community colleges, a step behind as this type of access becomes a more critical part of our digital era."
9) Related Legislation:
AB 238 (Stone) 2015: This bill would define "broadband" for purposes of the California Advanced Services Fund and expand funding eligibility to specific projects.
10) Prior Legislation:
SB 740 (Padilla) 2013: Expands eligibility in the CASF, establishes a program goal, and increases the program funding. Chaptered by the Secretary of State - Chapter 522, Statutes of 2013.
AB 1299 (Bradford) 2013: Requires the CPUC to find grants for the deployment and adoption of broadband services in publicly supported housing communities using the CASF. Chaptered by the Secretary of State - Chapter 507, Statutes of 2013.
SB 1040 (Padilla) 2010: Authorizes telecommunication carriers to collect an additional $125 million for the CASF to encourage deployment of advanced communication services in California. Chaptered by the Secretary of State - Chapter 317, Statutes of 2010.
SB 1193 (Padilla) 2008: Creates the CASF to fund the cost of deploying broadband Internet facilities to unserved and underserved areas of the state. Chaptered by the Secretary of State - Chapter 393, Statutes of 2008.
REGISTERED SUPPORT / OPPOSITION:
Support
Anza Electric Cooperative, Inc.
California Center for Rural Policy at Humboldt State University
California State Association of Counties (CSAC)
California State University, San Bernardino
Central Coast Broadband Consortium
Central Sierra Connect Broadband Consortia
City of Bishop
City of California City
City of Ridgecrest
City of Riverside
City of Tehachapi
Connect Capital Area Broadband Consortium
Contra Costa Economic Partnership
Corporation for Education Network Initiatives in California (CENIC)
County of Alpine
County of Del Norte
County of El Dorado
County of Humboldt
County of Mariposa
County of Modoc
County of Mono
County of Nevada
County of Sacramento
County of Sierra
County of Tehama
County of Trinity
County of Tuolumne
County of Ventura
County of Yolo
Eastern Sierra Connect Regional Broadband Consortium
Gold Country Broadband Consortium
Inyo Networks, Inc.
Kern Community College Districts
Lake Tahoe South Shore Chamber of Commerce
North Bay/North Coast Broadband Consortium
North Lake Tahoe Chamber/CVB/Resort Association
Northeastern CA Connect Consortium
Praxis Associates, Inc.
Riverside County Innovation Center
Rural County Representatives of California
San Bernardino Community College District
San Bernardino County 211
San Diego Imperial Regional Broadband Consortium
San Joaquin Valley Regional Broadband Consortium
Sierra Economic Development Corporation
Sierra Ecosystems Associates
SmartRiverside
Tahoe Prosperity Center
Town of Mammoth Lakes
Tuolumne County Economic Development Authority
Upstate CA Connect Consortium
Volcano Communications Group
West Kern Community College Districts
Yuba Community College Districts
Opposition
None on file. |