Bill Text: CA SB754 | 2023-2024 | Regular Session | Amended
Bill Title: Communications: California High-Cost Fund-A Administrative Committee Fund program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2024-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB754 Detail]
Download: California-2023-SB754-Amended.html
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Amended
IN
Senate
April 18, 2023 |
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Amended
IN
Senate
March 21, 2023 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Senate Bill
No. 754
| Introduced by Senator Alvarado-Gil |
February 17, 2023 |
An act to amend Section 275.6 of the Public Utilities Code, relating to communications.
LEGISLATIVE COUNSEL'S DIGEST
SB 754, as amended, Alvarado-Gil.
Communications: California High-Cost Fund-A Administrative Committee Fund program.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including telephone corporations. Existing law authorizes the commission to fix just and reasonable rates and charges for public utilities. Existing law requires the commission to maintain the California High-Cost Fund-A Administrative Committee Fund (CHCF-A) program until January 1, 2028, to provide universal service rate support to small independent telephone corporations, as defined, in certain amounts in furtherance of the state’s universal service commitment to the continued affordability and widespread availability of safe, reliable, high-quality communications services in rural areas of the state.
This bill would, among other things, modify the definition of “rate design” for purposes of the CHCF-A program to specify that it does not
include certain revenues, including internet access services, and would require the commission to ensure that each small independent telephone corporation’s rate design equals its revenue requirement. The bill would also require the commission, on or before February 1, 2024, to adjust each small independent telephone corporation’s rate design to remove any broadband or internet access revenues and implement corresponding increases to the distribution of CHCF-A program for funds to each small independent telephone
corporation to ensure that its rate design equals its revenue requirement.
Under existing law, a violation of the Public Utilities Act or an order or direction order, decision, rule, direction, demand, or requirement
of the commission is a crime.
Because the CHCF-A program is within the act and a decision or order of the violation of a commission implements the programs’ requirements, action implementing this bill’s requirements would be a crime, the bill would impose a state-mandated local program by expanding the definition of a crime. program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 275.6 of the Public Utilities Code is amended to read:275.6.
(a) The commission shall exercise its regulatory authority to maintain the California High-Cost Fund-A Administrative Committee Fund program (CHCF-A program) to provide universal service rate support to small independent telephone corporations in amounts sufficient to meet the revenue requirements established by the commission through rate-of-return regulation in furtherance of the state’s universal service commitment to the continued affordability and widespread availability of safe, reliable, high-quality communications services in rural areas of the state. The CHCF-A program is designed to ensure that telephone rates in high-cost, rural service territories remain reasonable and that sufficient incentives exist for small independent telephone corporations to make continued investments in broadband-capable facilities. This section(b) For purposes of this section, the following terms have the following meanings:
(1) “Carrier of last resort” means a telephone corporation that is required to fulfill all reasonable requests for service within its service territory.
(2) “Rate base” means the value of a telephone corporation’s plant and equipment that is reasonably
necessary to provide intrastate regulated voice services and access to advanced
services through deployment of broadband-capable facilities, and upon which the telephone corporation is entitled to a fair opportunity to earn a reasonable rate of return.
(3) “Rate design” means the mix of revenue from end user rates, federal universal service rate support, CHCF-A program funds, and other revenue sources derived from, or issued to, support the telephone corporation’s intrastate operations, that are collectively targeted to provide a fair opportunity to meet the revenue requirement of the telephone corporation. Rate design does not include revenue from internet access services, other nonregulated services, or interstate services regulated under the authority of the Federal Communications Commission.
(4) “Rate-of-return regulation” means a regulatory
structure whereby the commission establishes a telephone corporation’s intrastate revenue requirement, and then fashions a rate design to provide the company a fair opportunity to meet the revenue requirement.
(5) “Revenue requirement” means the amount that is necessary for a telephone corporation to recover its reasonable intrastate expenses and tax liabilities and earn a reasonable rate of return on its intrastate rate base.
(6) “Small independent telephone corporations” are rural incumbent local exchange carriers subject to commission regulation.
(c) In administering the CHCF-A program the commission shall do all of the following:
(1) Continue to set rates to be charged by the small independent telephone corporations in accordance with Sections 451, 454, 455, and 728.
(2) Employ rate-of-return regulation to determine a small independent telephone corporation’s revenue requirement in a manner that provides revenues and earnings sufficient to allow the small independent telephone corporation to deliver safe, reliable, high-quality voice communication service and fulfill its obligations as a carrier of last resort in its service territory, and to afford the small independent telephone corporation a fair opportunity to earn a reasonable return on its investments,
attract capital for investment on reasonable terms, and ensure the financial integrity of the small independent telephone corporation.
(3) Ensure that each small
independent telephone corporation’s rate design equals its revenue requirement.
(4) Ensure that rates charged to customers of small independent telephone corporations are just and reasonable and are reasonably comparable to rates charged to customers of urban telephone corporations.
(5) Provide universal service rate support from the CHCF-A program to small independent telephone corporations in an amount sufficient to supply the portion of the revenue requirement that cannot reasonably be provided by the customers of each small independent telephone corporation after receipt of federal universal service rate support.
(6) Promote customer access to advanced services and deployment
of broadband-capable facilities in rural areas that is reasonably comparable to that in urban areas, consistent with national communications policy.
(7) Include all reasonable investments necessary to provide for the delivery of high-quality voice communication services and the deployment of broadband-capable facilities in the rate base of small independent telephone corporations.
(8) Ensure that support is not excessive so that the burden on all contributors to the CHCF-A program is limited, while ensuring that each small independent telephone corporation’s rate design is sufficient to meet its revenue requirement.
(d) In order
to participate in the CHCF-A program, a small independent telephone corporation shall meet all of the following requirements:
(1) Be subject to rate-of-return regulation.
(2) Be subject to the commission’s regulation of telephone corporations pursuant to this division.
(3) Be a carrier of last resort in their service territory.
(4) Qualify as a rural telephone company under federal law (47 U.S.C. Sec. 153(44)).
(e) Upon request from the commission, a small independent telephone corporation that receives support from the CHCF-A program shall provide information regarding revenues derived from the
provision of unregulated internet access service by that corporation or its affiliate within that corporation’s telephone service territory. The commission shall treat as confidential any information provided pursuant to this subdivision. This requirement to provide internet access revenue information does not change the scope of the commission’s jurisdiction over internet service providers or internet access services, nor does it permit the inclusion of internet access service revenues in small independent telephone corporations’ rate designs.
(f) On or before February 1, 2024, the commission shall adjust each small independent telephone corporation’s rate design to remove any broadband or internet access revenues and implement corresponding increases to the distribution
of CHCF-A program for funds to each small independent telephone corporation to ensure that its rate design equals its revenue requirement.
(g) The commission shall structure the CHCF-A program so that any charge imposed to promote the goals of universal service reasonably equals the value of the benefits of universal service to contributing entities and their subscribers.
(h) This section shall remain in effect only until January 1, 2028, and as of that date is repealed.
