Today's Law As Amended


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AB-1407 Public utilities: voice communications service: lifeline program.(2013-2014)



As Amends the Law Today


SECTION 1.
 The Legislature finds and declares all of the following:
(a) Technological advances in Internet and mobile communications have resulted in a variety of new voice communications offerings beyond traditional wireline telephone service, such as mobile telephony service, commonly known as cellular telephone service, and Voice over Internet Protocol service.
(b) California consumers are increasingly choosing these new voice communications services, while conversely, traditional telephone subscriptions are decreasing.
(c) The Moore Universal Telephone Service Act should be modernized in order to maintain the vitality of its original policy goals by acknowledging that technologies, services, and business models other than traditional telephone service can be used to offer low-income citizens access to affordable, reliable, and high-quality communications service.
(d) In enacting this act, it is the intent of the Legislature to ensure that California residents have access to technologies and services and to promote technological neutrality by giving lifeline customers the ability to choose the voice communications service provider and service that best meets their unique needs, while encouraging mobile telephony service and other nontraditional providers to participate in the lifeline program.

SEC. 2.

 Section 871.5 of the Public Utilities Code is amended to read:

871.5.
 The Legislature finds and declares all of the following:
(a) The offering of high-quality basic telephone voice communications  service at affordable rates to the greatest number of citizens has been a longstanding goal of the state.
(b) The Moore Universal Telephone Service Act has been, and continues to be,  is  an important means for achieving universal service by making basic telephone voice communications  service affordable to low-income households through the creation of a lifeline class of service. lifeline program. 
(c) The Federal Communications Commission has recently reformed and modernized the federal universal service fund’s lifeline program by, among other things, adopting a technology neutral approach to lifeline.
(c) (d)  Every means should be employed by the commission and telephone corporations  to ensure that every household qualified to receive lifeline telephone service  support  is informed of and is afforded the opportunity to subscribe to that service. obtain that support. Nothing in this section effects an eligible telecommunications carrier’s obligations to advertise the availability of its offerings and charges for those offerings using media of general distribution under Section 54.201(d)(2) of Title 47 of the Code of Federal Regulations. The commission shall not impose any additional advertising obligations on lifeline providers. 
(d) (e)  The furnishing of lifeline telephone service  support  is in the public interest and should be supported fairly and equitably by every telephone corporation, and the  interest. The  commission, in administering the lifeline telephone service  program, should implement the program in a way that is equitable, nondiscriminatory, and without competitive consequences for the telecommunications industry in California.

SEC. 3.

 Section 871.7 of the Public Utilities Code is repealed.

871.7.
 The Legislature finds and declares all of the following:
(a) The Moore Universal Telephone Service Act, enacted in 1987, was intended to offer high quality basic telephone service at affordable rates to the greatest number of California residents, and has become an important means of achieving universal service by making residential service affordable to low-income citizens through the creation of a lifeline class of service.
(b) Factors such as competition and technological innovation are resulting in the convergence of a variety of telecommunications technologies offering an expanded range of telecommunications services to users that incorporate voice, video, and data. These technologies have differing regulatory regimes and jurisdictions.
(c) It is the intent of the Legislature that the commission initiate a proceeding investigating the feasibility of redefining universal telephone service by incorporating two-way voice, video, and data service as components of basic service. It is the Legislature’s further intent that, to the extent that the incorporation is feasible, that it promote equity of access to high-speed communications networks, the Internet, and other services to the extent that those services provide social benefits that include all of the following:
(1) Improving the quality of life among the residents of California.
(2) Expanding access to public and private resources for education, training, and commerce.
(3) Increasing access to public resources enhancing public health and safety.
(4) Assisting in bridging the “digital divide” through expanded access to new technologies by low-income, disabled, or otherwise disadvantaged Californians.
(5) Shifting traffic patterns by enabling telecommuting, thereby helping to improve air quality in all areas of the state and mitigating the need for highway expansion.
(d) For purposes of this section, the term “feasibility” means consistency with all of the following:
(1) Technological and competitive neutrality.
(2) Equitable distribution of the funding burden for redefined universal service as described in subdivision (c), among all affected consumers and industries, thereby ensuring that regulated utilities’ ratepayers do not bear a disproportionate share of funding responsibility.
(3) Benefits that justify the costs.

SEC. 4.

 Section 872 of the Public Utilities Code is repealed.

872.
 As used in this article, “household” means a residential dwelling that is the principal place of residence of the lifeline telephone service subscriber, and excludes any industrial, commercial, or other nonresidential building.

SEC. 5.

 Section 872 is added to the Public Utilities Code, to read:

872.
 As used in this article, the following terms have the following meanings:
(a) “Eligible customer” means any person who has, after providing adequate supporting documentation, been determined to be eligible to receive lifeline support by a third-party lifeline administrator. A lifeline provider shall not be obligated to provide, nor shall any person be entitled to receive, any lifeline support until that person has been determined to be an eligible customer by a third-party lifeline administrator. A customer applying to become an eligible customer shall not be required to first establish service as a condition for lifeline eligibility.
(b) “Household” means any individual or group of individuals who are living together at the same address as one economic unit. A household may include related and unrelated persons. An “economic unit” consists of all adult individuals contributing to and sharing in the income and expenses of a household. An adult is any person 18 years of age or older. If an adult has no or minimal income, and lives with someone who provides financial support to him or her, both people shall be considered part of the same household. Children under 18 years of age living with their parents or guardians are considered to be part of the same household as their parents or guardians.
(c) (1) “Lifeline provider” means any telephone corporation or alternative provider that meets all of the following requirements:
(A) Provides voice communications services that are eligible for federal universal service support pursuant to Section 54.101 (a) of Title 47 of the Code of Federal Regulations.
(B) Collects and remits surcharges for all universal service programs funded through those funds created pursuant to Section 270 and for the emergency telephone system described in Section 41030 of the Revenue and Taxation Code.
(C) Voluntarily chooses to participate in the lifeline program or is otherwise mandated to offer basic service.
(D) Agrees to comply with, and be held liable for any violations of, this article and any commission rules implementing this article, as enforced by the commission.
(2) Any “lifeline provider,” including a local exchange carrier, may use any technology, or multiple technologies, within the provider’s service territory, except as otherwise required pursuant to the obligation of a carrier of last resort to provide basic service to any customer upon request, including any eligible customer.

SEC. 6.

 Section 873 of the Public Utilities Code is amended to read:

873.
 (a)  The commission shall annually do all of the following:
(1) Designate a class of lifeline service necessary to meet minimum communications needs.
(2) Set the rates and charges for that service.
(3) (a)  Develop eligibility criteria for that service. eligible customers to participate in the lifeline program. The commission shall not increase lifeline income limits from those in effect on January 1, 2013, except for an annual adjustment to reflect inflation based on changes to the United States Consumer Price Index for All Urban Consumers (CPI-U). 
(4) (b)  Assess the degree of achievement of universal service, including telephone penetration rates  penetration rates for the lifeline program  by income, ethnicity, and geography. This information shall be annually reported to the Legislature by the commission in a document that can be made public. 
(b) (c)  Minimum communications needs include, but are not limited to, the ability to originate and receive calls and the ability to access electronic information services. Not withstanding Section 10231.5 of the Government Code, not later than March 31 of each year, prepare and submit a report to the Legislature on the fiscal status of the lifeline program. The report shall be submitted in compliance with Section 9795 of the Government Code. The report shall include a statement of the lifeline program surcharge level and revenues produced by the surcharge, the size of the Universal Lifeline Telephone Service Trust Administrative Committee Fund, the reason for a decline or increase in the size of the fund, if applicable, an accounting of program expenses, and an evaluation of options for controlling those expenses and increasing program efficiency. 

SEC. 7.

 Section 874 of the Public Utilities Code is repealed.

874.
 The lifeline telephone service rates and charges shall be as follows:
(a) In a residential subscriber’s service area where measured service is not available, the lifeline telephone service rates shall not be more than 50 percent of the rates for basic flat rate service, exclusive of federally mandated end user access charges, available to the residential subscriber.
(b) In a residential subscriber’s service area where measured service is available, the subscriber may elect either of the following:
(1) A lifeline telephone service measured rate of not more than 50 percent of the basic rate for measured service, exclusive of federally mandated end user access charges, available to the residential subscriber.
(2) A lifeline flat rate of not more than 50 percent of the rates for basic flat rate service, exclusive of federally mandated end user access charges, available to the residential subscriber.
(c) The lifeline telephone service installation or connection charge, or both, shall not be more than 50 percent of the charge for basic residential service installation or connection, or both. The commission may limit the number of installation and connection charges, or both, that may be incurred at the reduced rate in any given period.
(d) There shall be no charge to the residential customer who has filed a valid eligibility statement for changing out of lifeline service.
(e) The commission shall assess whether there is a problem with customers who fraudulently obtain lifeline telephone service. If the commission determines that there is a problem, it shall recommend and promulgate appropriate solutions. This assessment and the solutions determined by the commission shall not, in and of themselves, change the procedures developed pursuant to Section 876.

SEC. 8.

 Section 874 is added to the Public Utilities Code, to read:

874.
 (a) The commission may authorize a lifeline provider to be reimbursed pursuant to this section for commencing voice service for an eligible customer only if that provider is the customer’s carrier of last resort for basic service.
(b) Until and including December 31, 2014, the nonrecurring service charge for commencing voice service for a single voice connection for a lifeline customer shall be no more than ten dollars ($10). Until and including December 31, 2014, a lifeline provider shall be eligible for reimbursement from the Universal Lifeline Telephone Service Trust Administrative Committee Fund for the difference between the nonrecurring charge paid by a lifeline subscriber and the nonrecurring charge the lifeline provider charges for identical service in the ordinary course of business to subscribers that are not eligible customers, subject to the limitation that the reimbursement to the lifeline provider shall be no more than forty dollars ($40) per connection.
(c) Beginning January 1, 2015, the commission may annually increase the nonrecurring service charge incurred by eligible customers by an amount in proportion to the increase, if any, to the Consumer Price Index for All Urban Consumers (CPI-U). If the commission exercises this authority, then it also shall increase the lifeline provider connection reimbursement by a proportionate amount.

SEC. 9.

 Section 875 of the Public Utilities Code is repealed.

875.
 (a) In addition to Section 874, every lifeline telephone service subscriber shall be given an allowance, reduced by the amount of any credit or allowance authorized by the Federal Communications Commission, equal to the then current or announced federally mandated residential end user access charges.
(b) The commission may, in a separate proceeding, establish procedures necessary to ensure that the lifeline telephone service program qualifies for any federal funds available for the support of those programs.

SEC. 10.

 Section 875 is added to the Public Utilities Code, to read:

875.
 (a) Except as provided in subdivision (b), every eligible customer shall be given a discount of eleven dollars and eighty-five cents ($11.85) per month, in addition to any federally supported lifeline discount provided to customers of an eligible telecommunications carrier. Beginning January 1, 2015, the commission may annually adjust the support amount in proportion to the increase, if any, in the Consumer Price Index for All Urban Consumers (CPI-U).
(b) An eligible customer shall not be entitled to any combined monthly federal and state lifeline support in excess of the eligible customer’s monthly rate. State lifeline support shall be provided only after federal lifeline support, if any, is received by an eligible customer. Lifeline providers shall be eligible for reimbursement from the Universal Lifeline Telephone Service Trust Administrative Committee Fund in an amount not to exceed the amount of state lifeline support that is actually received by an eligible customer.
(c) To the extent necessary to support the lifeline program, the commission may assess a lifeline surcharge in an amount not to exceed 3.3 percent of the subscriber’s charges for intrastate telephone communications services or interconnected Voice over Internet Protocol (VoIP) service. The methodology for applying the lifeline surcharge to interconnected VoIP service shall be that set forth in subdivision (e) of Section 285.

SEC. 11.

 Section 875.5 is added to the Public Utilities Code, to read:

875.5.
 (a) Through and including December 31, 2014, all providers participating in the California lifeline program shall offer lifeline service at the same rates that were in effect on July 1, 2013.
(b) Every lifeline provider, on first contact by a prospective eligible customer, shall inform the customer of the availability of the lifeline discount and how that customer may qualify for and obtain the discount. A provider may present that information orally, electronically, or in print form.
(c) A lifeline provider that is a prospective eligible customer’s carrier of last resort for basic service shall also remain subject to any customer notification obligations applicable to the provision of basic service.

SEC. 11.SEC. 12.

 Section 876 of the Public Utilities Code is repealed.

876.
 The commission shall require every telephone corporation providing telephone service within a service area to file a schedule of rates and charges providing a class of lifeline telephone service. Every telephone corporation providing service within a service area shall inform all eligible subscribers of the availability of lifeline telephone service, and how they may qualify for and obtain service, and shall accept applications for lifeline telephone service according to procedures specified by the commission.

SEC. 13.

 Section 876 is added to the Public Utilities Code, to read:

876.
 (a) The commission shall, upon a request of a provider, designate as a lifeline provider a telephone corporation or alternative provider that meets the requirements of subdivision (c) of Section 872. The commission shall not, in exercising its delegated authority under federal law to designate eligible telecommunications carriers, or in exercising its authority under this section to designate state lifeline providers, deny a request to be designated based on the requesting entity providing any VoIP or IP-enabled service. The commission shall not, as a condition for either designation, impose any obligation that exceeds the obligations imposed on state-designated eligible telecommunications carriers in Subpart E (commencing with Section 54.400) of Part 54 of Title 47 of the Code of Federal Regulations, except that designation as a lifeline provider does not eliminate or diminish any obligation of a carrier of last resort to provide basic service to any customer upon request, including any eligible customer.
(b) The commission shall require a lifeline provider to offer only the minimum service elements to eligible lifeline customers set forth in Section 54.101 (a) of Title 47 of the Code of Federal Regulations. Lifeline support may be applied to any bundle or package that includes voice service.

SEC. 13.SEC. 14.

 Section 877 of the Public Utilities Code is repealed.

877.
 Nothing in this article precludes the commission from changing any rate established pursuant to Section 873, either specifically or pursuant to any general restructuring of all telephone rates, charges, and classifications.

SEC. 15.

 Section 877 is added to the Public Utilities Code, to read:

877.
 (a) Lifeline discounts shall be limited to one per household. Nothing in this section effects the ability of a member of a household to obtain an additional lifeline discount if that member is medically certified as deaf or hard of hearing and has continuous access to teletypewriter equipment, or its functional equivalent, pursuant to Section 2881, and has been determined to be an eligible customer by a third-party lifeline administrator.
(b) An applicant for lifeline support may report only one address in the state as a principal place of residence.

SEC. 15.SEC. 16.

 Section 878 of the Public Utilities Code is repealed.

878.
 A lifeline telephone service subscriber shall be provided with one lifeline subscription, as defined by the commission, at his or her principal place of residence, and no other member of that subscriber’s family or household who maintains residence at that place is eligible for lifeline telephone service.
An applicant for lifeline telephone service may report only one address in this state as the principal place of residence.

SEC. 17.

 Section 878 is added to the Public Utilities Code, to read:

878.
 This article does not eliminate or diminish the obligation of a carrier of last resort to provide basic service to any customer upon request, including to any eligible customer.

SEC. 16.SEC. 18.

 Section 879 of the Public Utilities Code is repealed.

879.
 (a) The commission shall, at least annually, initiate a proceeding to set rates for lifeline telephone service. All telephone corporations providing lifeline telephone service shall annually file, on a date set by the commission, proposed lifeline telephone service rates and a statement of projected revenue needs to meet the funding requirements to provide lifeline telephone service to qualified subscribers, together with proposed funding methods to provide the necessary funding. These funding methods shall include identification of those services whose rates shall be adjusted to provide the necessary funding.
(b) The commission shall commence a proceeding within 30 days after the date set for the filings required in subdivision (a), giving interested parties an opportunity to comment on the proposed rates and funding requirements and the proposed funding methods. The commission may change the rates, funding requirements, and funding methods proposed by the telephone corporations in any manner necessary, including reasonably spreading the funding among the services offered by the telephone corporations, to meet the public interest. Within 60 days of the annual filing, the commission shall issue an order setting lifeline telephone service rates and funding methods for each telephone corporation making a filing as required in subdivision (a). The commission may establish a lifeline service pool composed of the rate adjustments and surcharges imposed by the commission pursuant to this section for the purpose of funding lifeline telephone service.
(c) Any order issued by the commission pursuant to this section shall require telephone corporations providing lifeline telephone service to apply the funding requirement in the form of a surcharge to service rates which may be separately identified on the bills of customers using those services. The commission shall not allow any surcharge under this section on the rates charged by those telephone corporations for lifeline telephone service.
(d) The commission shall permit telephone corporations operating between service areas to adjust the rates of any service which may be affected by any surcharge imposed by this section.

SEC. 17.SEC. 19.

 Section 879.5 of the Public Utilities Code is repealed.

879.5.
 Notwithstanding Section 879, the commission shall issue its initial order adopting required rates and funding requirements not later than October 31, 1987, and prior to the issuance of that order, may fund lifeline telephone service through the use of an interim surcharge on service rates for telephone service provided by telephone corporations operating between service areas. The interim surcharge shall not exceed 4 percent of the service rates.

SEC. 18.SEC. 20.

 Section 880 of the Public Utilities Code is repealed.

880.
 The commission may determine any question of fact in its administration of this article.

SEC. 19.SEC. 21.

 Section 882 of the Public Utilities Code is repealed.

882.
 (a) The Public Utilities Commission shall, as soon as practicable, open a proceeding or proceedings to, or as part of existing proceedings shall, consider ways to ensure that advanced telecommunications services are made available as ubiquitously and economically as possible, in a timely fashion, to California’s citizens, institutions, and businesses. The proceeding or proceedings should be completed within one year of commencement.
(b) The proceeding or proceedings shall develop rules, procedures, orders, or strategies, or all of these, that seek to achieve the following goals:
(1) To provide all citizens and businesses with access to the widest possible array of advanced communications services.
(2) To provide the state’s educational and health care institutions with access to advanced communications services.
(3) To ensure cost-effective deployment of technology so as to protect ratepayers’ interests and the affordability of telecommunications services.
(c) In the proceeding or proceedings, the commission should also consider, but need not limit its consideration to, all of the following:
(1) Whether the definition of universal service should be broadened.
(2) How to encourage the timely and economic development of an advanced public communications infrastructure, which may include a variety of competitive providers.

SEC. 20.SEC. 22.

 Section 883 of the Public Utilities Code is repealed.

883.
 (a) The commission shall, on or before February 1, 2001, issue an order initiating an investigation and opening a proceeding to examine the current and future definitions of universal service. That proceeding shall include public hearings that encourage participation by a broad and diverse range of interests from all areas of the state, including, but not limited to, all of the following:
(1) Consumer groups.
(2) Communication service providers, including all providers of high-speed access services.
(3) Facilities-based telephone providers.
(4) Information service providers and Internet access providers.
(5) Rural and urban users.
(6) Public interest groups.
(7) Representatives of small and large businesses and industry.
(8) Local agencies.
(9) State agencies, including, but not limited to, all of the following:
(A) The Government Operations Agency.
(B) The State Department of Education.
(C) The State Department of Public Health.
(D) The California State Library.
(10) Colleges and universities.
(b) The objectives of the proceeding set forth in subdivision (a) shall include all of the following:
(1) To investigate the feasibility of redefining universal service in light of current trends toward accelerated convergence of voice, video, and data, with an emphasis on the role of basic telecommunications and Internet services in the workplace, in education and workforce training, access to health care, and increased public safety.
(2) To evaluate the extent to which technological changes have reduced the relevance of existing regulatory regimes given their current segmentation based upon technology.
(3) To receive broad-based input from a cross section of interested parties and make recommendations on whether video, data, and Internet service providers should be incorporated into an enhanced Universal Lifeline Service program, as specified, including relevant policy recommendations regarding regulatory and statutory changes and funding options that are consistent with the principles set forth in subdivision (c) of Section 871.7.
(4) To reevaluate prior definitions of basic service in a manner that will, to the extent feasible, effectively incorporate the latest technologies to provide all California residents with all of the following:
(A) Improved quality of life.
(B) Expanded access to public and private resources for education, training, and commerce.
(C) Increased access to public resources enhancing public health and safety.
(D) Assistance in bridging the “digital divide” through expanded access to new technologies by low income, disabled, or otherwise disadvantaged Californians.
(5) To assess projected costs of providing enhanced universal lifeline service in accordance with the intent of this article, and to delineate the subsidy support needed to maintain the redefined scope of universal service in a competitive market.
(6) To design and recommend an equitable and broad-based subsidy support mechanism for universal service in competitive markets in a manner that conforms with subdivision (c) of Section 871.7.
(7) To develop a process to periodically review and revise the definition of universal service to reflect new technologies and markets consistent with subdivision (c) of Section 871.7.
(8) To consider whether similar regulatory treatment for the provision of similar services is appropriate and feasible.
(c) In conducting its investigation, the commission shall take into account the role played by a number of diverse but convergent industries and providers, even though many of these entities are not subject to economic regulation by the commission or any other government entity.
(d) The recommendations of the commission shall be consistent with state policies for telecommunications as set forth in Section 709, and with all of the following principles:
(1) Universal service shall, to the extent feasible, be provided at affordable prices regardless of linguistic, cultural, ethnic, physical, financial, and geographic considerations.
(2) Consumers shall be provided access to all information needed to allow timely and informed choices about telecommunications products and services that are part of the universal service program and how best to use them.
(3) Education, health care, community, and government institutions shall be positioned as early recipients of new and emerging technologies so as to maximize the economic and social benefits of these services.

SEC. 23.

 Section 1001.7 is added to the Public Utilities Code, to read:

1001.7.
 The commission shall neither deny nor revoke a certificate of public convenience and necessity applied for by or issued to a telephone corporation that provides retail or wholesale telecommunications services on the grounds that the telephone corporation also provides Voice over Internet Protocol service or any other unregulated service. This section does not expand the commission’s existing jurisdiction over any service or affect any provision of Section 710. This section does not give any telephone corporation any new rights or powers.
SEC. 24.
 (a) This act does not create or expand the Public Utilities Commission’s jurisdiction over any provider, service, or technology. In implementing this act, the commission shall not impose any new obligation, standard, or requirement upon any provider, service, or technology that is not expressly required by the act.
(b) By May 1, 2014, the commission shall revise General Order 153 to bring it into compliance with this act. The commission shall eliminate or modify any rule that imposes substantive requirements upon lifeline providers beyond the express terms of this act, but may retain, modify, or enact rules governing the administration of the lifeline program that are not inconsistent with this act, including rules governing enrollment processes, eligibility forms, the third-party administrator, the calculation of the fund and establishment of the surcharge, reporting and remittances of surcharges, use of electronic communications, and audits and records. The commission shall allow a lifeline provider a reasonable period of time to implement the requirements or obligations of this act.
SEC. 25.
 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.