Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations. The Moore Universal Telephone Service Act established the Universal Lifeline Telephone Service (ULTS) program. In carrying out the ULTS program, the commission is required annually to annually designate a class of lifeline service necessary to meet minimum residential communications needs, to set the rates and charges for that service, to develop eligibility criteria for that service, and to assess the degree of achievement of universal service. Funding for the ULTS program is provided through a surcharge established by the commission on specified communications services that services, moneys from which are deposited into the Universal Lifeline Telephone Service Trust Administrative Committee Fund and are made available to the commission, upon appropriation, exclusively for the ULTS program. Existing law establishes creates the Universal Lifeline Telephone Service Trust Administrative Committee, which is an advisory board to advise the commission regarding the development, implementation, and administration of the ULTS program, program and to carry out the ULTS program pursuant to the commissions direction, control, and approval.

This bill would repeal language creating the Universal Lifeline Telephone Service Trust Administrative Committee and instead establish the Lifeline Oversight Board both to advise the commission on the effective development, implementation, and administration of the lifeline program to ensure lifeline service is available to the people of the state, and to serve as a liaison between the commission and low-income subscribers and their representatives to carry out the program pursuant to the commissions direction, control, and approval. The board would be composed of 11 members, selected by the commission as specified, and the bill would require that board meetings alternate locations between northern, central, and southern California to maximize participation from consumers in those regions. The bill would require the commission to (1) establish a 90% lifeline participation goal for all eligible California households, (2) assign staff and provide technical support to the board, and work with the board and other specified entities to increase participation in the lifeline program, (3) (2) ensure the needs of low-income lifeline subscribers are met, and (4) (3) provide formal notice of board meetings in the commissions daily calendar.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because certain of the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local 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.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations. The Moore Universal Telephone Service Act established the Universal Lifeline Telephone Service (ULTS) program. In carrying out the ULTS program, the commission is required to annually designate a class of lifeline service necessary to meet minimum residential communications needs, including the ability to originate and receive calls and the ability to access electronic information service, to set the rates and charges for that service, to develop eligibility criteria for that service, and to assess the degree of achievement of universal service, including telephone penetration rates by income, ethnicity, and geography. service. Funding for the ULTS program is provided through a surcharge established by the commission on specified communications services that are deposited into the Universal Lifeline Telephone Service Trust Administrative Committee Fund and are made available to the commission, upon appropriation, exclusively for the ULTS program. Existing law establishes the Universal Lifeline Telephone Service Trust Administrative Committee, which is an advisory board to advise the commission regarding the development, implementation, and administration of the ULTS program, and to carry out the ULTS program pursuant to the commissions direction, control, and approval.

This bill would repeal language creating the Universal Lifeline Telephone Service Trust Administrative Committee and instead establish the Lifeline and Broadband Oversight Board both to advise the commission on the effective development, implementation, and administration of the lifeline program, and to perform specified duties, including program to ensure lifeline service is available to the people of the state state, and to serve as a liaison between the commission and low-income subscribers and their representatives to carry out the program pursuant to the commissions direction, control, and approval. The board would be composed of 13 11 members, selected by the commission as specified, and the bill would require that board meetings alternate locations between northern, central, and southern California to maximize participation from consumers in those regions. The bill would require the commission to (1) establish a 90% lifeline participation goal for all eligible California households, (2) assign staff and provide technical support to the board, and work with the board and other specified entities to increase participation in the lifeline program, (3) ensure the needs of low-income lifeline subscribers are met, and (4) provide formal notice of board meetings in the commissions daily calendar.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because certain of the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new 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.

Existing law, the federal Telecommunications Act of 1996, establishes a program of cooperative federalism for the regulation of telecommunications to attain the goal of local competition, while implementing specific, predictable, and sufficient federal and state mechanisms to preserve and advance universal service, consistent with certain universal service principles. Under the act, universal service is an evolving level of telecommunications services that the Federal Communications Commission is required to establish periodically, taking into account advances in telecommunications and information technologies and services. The universal service principles include the principle that consumers in all regions of the nation, including low-income consumers and those in rural, insular, and high-cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas. The act authorizes each state to adopt regulations to provide for additional definitions and standards to preserve and advance universal service within the state, only to the extent that they adopt additional specific, predictable, and sufficient mechanisms that do not rely on or burden federal universal service support mechanisms.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations. The Moore Universal Telephone Service Act established the Universal Lifeline Telephone Service (ULTS) program. In carrying out the ULTS program, the commission is required to annually designate a class of lifeline service necessary to meet minimum residential communications needs, including the ability to originate and receive calls and the ability to access electronic information service, to set the rates and charges for that service, to develop eligibility criteria for that service, and to assess the degree of achievement of universal service, including telephone penetration rates by income, ethnicity, and geography. Funding for the ULTS program is provided through a surcharge established by the commission on specified communications services that are deposited into the Universal Lifeline Telephone Service Trust Administrative Committee Fund and are made available to the commission, upon appropriation, exclusively for the ULTS program. Existing law establishes the Universal Lifeline Telephone Service Trust Administrative Committee, which is an advisory board to advise the commission regarding the development, implementation, and administration of the ULTS program, and to carry out the ULTS program pursuant to the commissions direction, control, and approval.

This bill would repeal language creating the Universal Lifeline Telephone Service Trust Administrative Committee and instead establish the Lifeline and Broadband Oversight Board to advise the commission on the effective development, implementation, and administration of the lifeline program, and to perform specified duties, including to ensure lifeline service is available to the people of the state and to serve as a liaison between the commission and low-income subscribers and their representatives to carry out the program pursuant to the commissions direction, control, and approval. The board would be composed of 13 members, selected as specified, and the bill would require that board meetings alternate locations between northern, central, and southern California to maximize participation from consumers in those regions. The bill would require the commission to (1) establish a 90% lifeline participation goal for all eligible California households, (2) assign staff and provide technical support to the board, and work with the board and other specified entities to increase participation in the lifeline program, (3) ensure the needs of low-income lifeline subscribers are met, and (4) provide formal notice of board meetings in the commissions daily calendar.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because certain of the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by creating a new crime.

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.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

AB 2537 (Carrillo) - Telecommunications universal service programs: Lifeline Oversight Board

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

This bill establishes the Lifeline Oversight Board and specifies its membership and duties.

Fiscal Impact:

• Ongoing annual costs of about $350,000 (LifeLine surcharge revenues) for the California Public Utilities Commission (CPUC) to coordinate with, and provide assistance to, the LifeLine Oversight Board, and work with interested parties and community-based organizations to increase LifeLine participation.

Background: The LifeLine program provides discounted home phones or cell phones to qualified households. Only one discount per household is allowed; however, the CPUC has interpreted this as an economic unit so there could be multiple lifeline phones in one house. A person can qualify for the lifeline program if they are enrolled in any of numerous public assistance programs such as Medicaid/Medi-Cal, Low Income Home Energy Assistance Program, Supplemental Security Income, Food Stamps, and Women, Infants, and Children Program. In 2014 the CPUC expanded the program to include wireless services - voice, text, and data. The lifeline program had been on a decline, but after the 2014 decision the program more than doubled. As a result the surcharge paid by telephone customers, except low-income customers, increased three times in 2015. In November 2016, the commission reduced the surcharge to 4.75% stating the program had attained an adequate fund reserve.

Proposed Law:

This bill would eliminate the Universal Lifeline Telephone Service Trust Administrative Committee and replace it with the Lifeline Oversight Board to advise the commission on the effective development, implementation, and administration of the lifeline program and serve as a liaison between the commission and low-income subscribers and their representatives.

It also would require the Lifeline Oversight Board to do the following:

1. Monitor and evaluate the implementation of the program;
2. Advise and assist in the development and analysis of low-income subscribers' needs;
3. Monitor the program's budget and provide recommendation to maximize the program's effectiveness and delivery;
4. Assist in developing outreach, education, marketing, and communications strategies to increase program participation;
5. Encourage the use of community-based organization networks in outreach and program implementation;
6. Encourage collaboration between other state-funded programs and community-based stakeholders to increase participation among low-income individuals;
7. Provide reports or testimony to the Legislature, as requested;
8. Assist in streamlining the program's application and enrollment process, including options to share enrollment information with other state-funded low-income programs; and
9. Coordinate with the Low-Income Oversight Board, including holding one joint meeting per year.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Ben Hueso, Chair

2017 - 2018 Regular

Bill No: Hearing Date: 6/27/2018

SUBJECT:

DIGEST: This bill establishes the Lifeline Oversight Board (LLOB) and specifies its membership and duties.

ANALYSIS:

Existing law:

1. Gives the California Public Utilities Commission (CPUC) the authority to supervise and regulate every public utility in the state and do all things necessary and convenient in the exercise of such power and jurisdiction. (Public Utilities Code §701)
2. Defines the term “public utility” and includes common carriers in the definition of a public utility. (Public Utilities Code §216)
3. States California’s telecommunications policy, including affirming the State’s commitment to universal service by assuring the continued affordability and widespread availability of high-quality telecommunications services to all Californians. (Public Utilities Code §709)
4. Requires the CPUC to designate a class of Lifeline service necessary to meet minimum communications needs and set rates and eligibility criteria for that service. (Public Utilities Code §873)
5. Establishes the Universal Lifeline Telephone Service Trust Administrative Committee (ULTSAC) to advise the CPUC on the Lifeline program and execute the program pursuant to the CPUC’s direction, control, and approval. (Public Utilities Code §277)

This bill:

1. Re-establishes the ULTSAC as the LLOB.
2. Specifies the LLOB’s composition by requiring the CPUC to select the following 11 members:
   1. One member from a large or midsize local exchange carrier.
   2. One member from a small local exchange carrier.
   3. One member from an interexchange carrier or competitive local exchange carrier.
   4. One member from a wireless carrier.
   5. Two members from consumer organizations, each of whom represents a different constituency impacted by a lack of access to basic telephone service.
   6. Three members from community-based organizations, each of whom represents a different constituency impacted by a lack of access to basic telephone service.
   7. One member that represents deaf or disabled Lifeline users.
   8. One member from the Office of Ratepayer Advocates.
3. Specifies the duties of the LLOB to include the following:
   1. Monitoring an evaluating the Lifeline program.
   2. Advising and assisting in development and analysis of low-income subscribers’ needs.
   3. Monitoring the program’s budget and recommending options for improving the Lifeline program.
   4. Assisting in the development of outreach and marketing efforts to increase program participation.
   5. Encouraging the use of community-based organization networks in outreach and program implementation efforts.
   6. Encourage collaboration between other state programs and community-based organizations to increase participation.
   7. Report or testify to the Legislature regarding the Lifeline program as needed.
   8. Assisting in streamlining the Lifeline program’s application and enrollment process, including options for coordinating enrollment with other state programs for low-income Californians.
   9. Coordinating with the Low-Income Oversight Board to coordinate services across CPUC-administered low-income programs and hold one joint meeting per year.
   10. Holding meetings in geographically diverse regions of the state and effectively assigning staff.
4. Clarifies that members are eligible for compensation in compliance with requirements for state travel.

Background

Federal and State Lifeline Programs. The Lifeline program is one of several universal service programs and subsidizes the cost of telecommunications services for low-income consumers. The Lifeline program provides households at or below 135 percent of the federal poverty level with a monthly subsidy to obtain one fixed or wireless line with a participating communications provider, which may include a data package. In California, Lifeline subscribers receive benefits from two different programs: the state-level California Lifeline Program and the federal Lifeline program. In California, the CPUC administers both of the programs through a single third-party administrator. However, the Federal Communications Commission establishes policy for the federal Lifeline program. Both programs are funded through a surcharge on other consumers’ telecommunications bills. California Lifeline subscribers may receive $13.75 per month from the state program in addition to the $9.25 from the federal program. As a result, California participants can receive a total of $23 per month towards their Lifeline service. While certain differences exist between the state and federal programs, California operates both Lifeline programs in coordination to maximize benefits for California subscribers.

Universal Lifeline Telephone Service Trust Administrative Committee. Existing law establishes advisory bodies to inform the CPUC on its telecommunications programs, including the Lifeline program. Under existing law, ULTSAC is tasked with advising the CPUC on administration of the Lifeline program. ULTSAC provides the CPUC with recommendations on outreach efforts to improve program participation and meeting universal service goals through the Lifeline program. ULTSAC’s membership, specific duties, and rules of governance are clarified in ULTSAC’s charter, which is periodically modified by the CPUC.

Bill Codifies Administrative Actions. This bill codifies activities undertaken at the CPUC to update the ULTSAC. In March 2018, the CPUC issued a resolution (Resolution T-17574) clarifying ULTSAC’s budgeting and meeting duties and modifying its membership. Prior to this resolution, ULTSAC was required to have nine members specified by the ULTSAC charter. The charter also did not explicitly establish a specific representative from wireless providers. Instead, the charter specified that ULTSAC must have a member from an inter-exchange carrier, competitive local exchange carrier or wireless carrier. The 2018 resolution increased ULTSAC’s membership to 11 members by adding an additional two members: one representing a wireless Lifeline provider and one representing the deaf/hearing impaired or disabled community. The resolution notes that the addition of a representative from the Lifeline wireless community reflects the evolution of Lifeline services. According to the resolution, wireless service represents 75 percent of the California Lifeline Program’s growth. Adding a specific member from a Lifeline wireless provider ensures that participating wireless companies will have a voice in the advisory body for the program. The addition of a deaf/hearing impaired or disabled member to ULTSAC also ensures that this constituency has a representative to speak to unique accessibility issues that face the deaf/hearing impaired and disabled communities.

This bill renames ULTSAC as the Lifeline Oversight Board, codifies the membership changes made by Resolution T-17574 and clarifies duties assigned to the LLOB. While the CPUC has implemented many of the membership changes and updated the ULTSAC charter, codifying the membership may ensure that these beneficial modifications are retained in the future. Prior to approving the addition of two new members, the CPUC explored options to convert one ULTSAC position designated for a community-based organization member into a position for a wireless company member. While filling the positions designated for community-based organizations can be challenging, the CPUC determined that converting a position intended for these organizations into one for a wireless company was inconsistent with goals to ensure that community-based organizations can represent the interests of specific constituencies impacted by a lack of access to affordable telecommunications.

Prior/Related Legislation

AB 2652 (Quirk, 2018) would establish a 60-day portability freeze for California Lifeline subsidies and modify the program’s enrollment and recertification process. The bill is currently up for consideration in this committee.

SB 669 (Polanco, Chapter 677, Statutes of 1999) added a representative from a city and a county to the list of entities with which the State Department of General Services must consult when considering the state's 9-1-1 program, and it codified the advisory boards for six telecommunications programs administered by the CPUC.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

The Utility Reform Network (Source)

Afghan Coalition

Armenian Relief Society of Western USA, Social Services

Asian-American Resource Center

California Alliance for Retired Americans

California Council of Churches IMPACT

Casa Familiar

City of Huron

Coalition for Economic Survival

Deaf Community Services of San Diego, Inc.

Good Samaritan Family Resource Center, Inc.

International Institute of Los Angeles

Korean American Community Services

Little Tokyo Service Center CDC

Madera Coalition for Community Justice

Milestone Consulting, LLC

POSSO/Portuguese Community Center

Southeast Asian Community Center

Suscol Intertribal Council

Tenderloin Housing Clinic & Central City S.R.O. Collaborative

TruConnect Telecommunications, Inc.

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the author:

“The Lifeline Oversight Board represents a restructuring of the existing ULTSAC. This restructure will clarify the scope of the duties and responsibilities of the Board at this critical juncture. The LLOB will more effectively and efficiently uphold the original intent of the board to advise the commission on practical development, implementation, and administration of the low-income landline and cellphone program. This would in turn strengthen the ability of this program to provide better service to a larger number of deserving low-income households.”

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2537

Author:(Carrillo)

As Amended Ver:May 25, 2018

Majority vote

SUMMARY: Establishes the Lifeline Oversight Board to advise the California Public Utilities Commission (CPUC) on the California LifeLine Program. Specifically, this bill:

1. Eliminates the Universal Lifeline Telephone Service Trust Administrative Committee (ULTSAC) and establishes the Lifeline Oversight Board, to advise the CPUC on the effective development, implementation, and administration of the lifeline program to ensure lifeline service is available to the people of the state, as specified, and to serve as a liaison between the CPUC and low-income subscribers and their representatives to carry out the program pursuant to the CPUC's direction, control, and approval.
2. Specifies that the Lifeline Oversight Board shall be composed of 11 members to be selected by the CPUC as follows:
   1. One member who is a representative of a large or midsized local exchange carrier;
   2. One member who is a representative of a small local exchange carrier;
   3. One member who is a representative of an interexchange carrier or a competitive local exchange carrier;
   4. One member who is a representative of a wireless carrier;
   5. Two members who are representatives of consumer organizations, each of whom represents a different constituency, based on geographic or economic criteria, on language, or on other criteria that reasonably influence lack of access to basic telephone service;
   6. Three members who are representatives of community-based organizations, each of whom represents a different constituency, based on geographic or economic criteria, on language, or on other criteria that reasonably influence lack of access to basic telephone service;
   7. One member who is an individual, or a representative of an organization, representing the interests of either the deaf or disabled users of the lifeline program; and,
   8. One member who is a representative of the Office of Ratepayer Advocates.
3. Requires the Lifeline Oversight Board, to do all of the following:
   1. Monitor and evaluate the implementation of the lifeline program;
   2. Advise and assist in the development and analysis of low-income subscribers' needs;
   3. Monitor the budget for the lifeline program and provide recommendations to maximize the program's effectiveness and delivery;
   4. Assist in developing outreach, education, marketing, and communications strategies, independent of participating providers' marketing efforts, to increase program participation from within the low-income community;
   5. Encourage the use of community-based organization networks in outreach efforts and program implementation to increase program participation;
   6. Encourage collaboration between other state-funded programs and community-based stakeholders to increase participation among low-income individuals;
   7. Provide reports or testimony to the Legislature, as requested, summarizing any needs, audits, and analysis associated with the implementation of the lifeline program;
   8. Assist in streamlining the lifeline program's application and enrollment process, including options to share enrollment information with other state-funded low-income programs; and,
   9. Coordinate with the Low-Income Oversight Board, as specified, to maximize the effective implementation and delivery of low-income programs administered by the CPUC by holding one joint meeting per year.
4. Requires the specified board to alternate meeting locations between northern, central, and southern California to maximize participation from consumers in those regions.
5. Requires the CPUC to do all of the following in conjunction with the specified board:
   1. Assign staff and provide technical support to the board, and work with the board, interested parties, and community-based organizations to increase participation in the lifeline program. The assigned staff shall not be members of the board or have a vote on board decisions;
   2. Ensure the needs of low-income lifeline subscribers are met; and,
   3. Provide formal notice of board meetings in the CPUC's daily calendar.
6. Specifies that members of the board shall be eligible for compensation in accordance with state guidelines for necessary travel.

FISCAL EFFECT: According to the Assembly Appropriations Committee: Annual, ongoing costs to the CPUC, likely less than $150,000 (special fund) for the CPUC to staff and support the work of the board.

COMMENTS:

1. Author's Statement: According to the author, "The Lifeline Oversight Board represents a restructuring of the existing ULTSAC. This restructure will clarify the scope of the duties and responsibilities of the Board at this critical juncture. The [Lifeline Oversight Board] will more effectively and efficiently uphold the original intent of the board to advise the [CPUC] on practical development, implementation, and administration of the low-income landline and cellphone program. This would in turn strengthen the ability of this program to provide better service to a larger number of deserving low-income households."
2. Background: The CPUC is tasked with developing and implementing programs to advance universal access to necessary services, such as telephone and broadband services. To do so, the CPUC implements a number of public programs to promote universal service, including the LifeLine Program. The universal service programs are funded through a surcharge on each customer's phone bill.
3. California LifeLine Program: The California LifeLine Program was created in 1984 to provide access for low-income households to affordable basic residential telephone service. The California LifeLine Program, together with the federal LifeLine program, helps consumers lower the cost of their phone bills by providing discounts for home phone and cell phone service. Together each program participant can currently receive a monthly maximum discount of $14.30 from the California LifeLine Program in addition to a monthly maximum discount of $9.25 from the Federal LifeLine Program. To qualify for LifeLine, consumers must be enrolled in certain public assistance programs, such as Medi-Cal and CalFresh, or demonstrate that their household income falls within certain parameters.
4. Universal Lifeline Telephone Service Trust Administrative Committee: SB 669 (Polanco) Chapter 677, Statutes of 1999, established the ULTSAC as an advisory board tasked with advising the CPUC on the development, implementation, and administration of the California LifeLine Program. According to the author, restructuring the existing ULTSAC with the LifeLine Oversight Board would clarify the scope of duties and responsibilities of the board which will more effectively and efficiently uphold the original intent of the board. This bill would establish the LifeLine Oversight Board and task it with advising the CPUC on the lifeline program.

Analysis Prepared by: Edmond Cheung / C. & C. / (916) 319-2637 FN: 0003430

Date of Hearing: April 25, 2018

ASSEMBLY COMMITTEE ON COMMUNICATIONS AND CONVEYANCE

Miguel Santiago, Chair

ABPCA Bill Id:AB 2537 (

Author:Carrillo) – As Introduced Ver:February 14, 2018

SUBJECT: Telecommunications universal service programs: Lifeline Oversight Board

SUMMARY: Establishes the Lifeline Oversight Board to advise the California Public Utilities Commission (CPUC) on the California LifeLine Program. Specifically, this bill:

1. Eliminates the Universal Lifeline Telephone Service Trust Administrative Committee (ULTSAC) and establishes the Lifeline Oversight Board, to advise the CPUC on the effective development, implementation, and administration of the lifeline program to ensure lifeline service is available to the people of the state, as specified, and to serve as a liaison between the CPUC and low-income subscribers and their representatives to carry out the program pursuant to the CPUC’s direction, control, and approval.
2. Specifies that the Lifeline Oversight Board shall be composed of 13 members to be selected as follows:
   1. Six members, selected by the CPUC, who have expertise in, and experience working with, low-income communities and who are not employed by, or by corporate affiliates of, any state agency or telecommunications or communications corporate entity. These members shall be selected in a manner to ensure an equitable geographic and community-of-interest distribution;
   2. One member, selected by the Governor, who is a representative of the Governor’s office;
   3. One member, selected by the Governor, who is a representative of the Department of Technology or a similar state agency;
   4. One member, selected by the CPUC, who is a commissioner or commissioner designee;
   5. One member, selected by the CPUC, who is a representative of the Office of Ratepayer Advocates;
   6. One member, selected by the CPUC, who is a representative of a lifeline wireline telephone service provider;
   7. One member, selected by the CPUC, who is a representative of a lifeline mobile telephony service provider that is unaffiliated with a wireline telephone corporation that offers lifeline services; and,
   8. One member, selected by the CPUC, who is a representative of a wireline telephone service provider that is a small independent telephone corporation, as specified.
3. Requires the Lifeline Oversight Board, to do all of the following:
   1. Monitor and evaluate the implementation of the lifeline program;
   2. Advise and assist in the development and analysis of low-income subscribers’ needs;
   3. Monitor the budget for the lifeline program and provide recommendations to maximize the program’s effectiveness and delivery;
   4. Assist in developing outreach, education, marketing, and communications strategies, independent of participating providers’ marketing efforts, to increase program participation from within the low-income community;
   5. Encourage the use of community-based organization (CBO) networks in outreach efforts and program implementation to increase program participation;
   6. Encourage collaboration between other state-funded programs and community-based stakeholders to increase participation among low-income individuals;
   7. Provide reports or testimony to the Legislature, as requested, summarizing any needs, audits, and analysis associated with the implementation of the lifeline program;
   8. Assist in streamlining the lifeline program’s application and enrollment process, including options to share enrollment information with other state-funded low-income programs; and,
   9. Coordinate with the Low-Income Oversight Board, as specified, to maximize the effective implementation and delivery of low-income programs administered by the CPUC by holding one joint meeting per year.
4. Requires the specified board to alternate meeting locations between northern, central, and southern California to maximize participation from consumers in those regions.
5. Requires the CPUC to do all of the following in conjunction with the specified board:
   1. Establish a 90-percent lifeline participation goal for all eligible California households;
   2. Assign staff and provide technical support to the board, and work with the board, interested parties, and CBOs to increase participation in the lifeline program. The assigned staff shall not be members of the board or have a vote on board decisions;
   3. Ensure the needs of low-income lifeline subscribers are met; and,
   4. Provide formal notice of board meetings in the CPUC’s daily calendar.
6. Specifies that members of the board shall be eligible for compensation in accordance with state guidelines for necessary travel.

EXISTING LAW:

1. Establishes the Moore Universal Telephone Service Act to achieve universal service by making basic telephone service affordable to low-income households through the creation of a lifeline class of service. Requires the CPUC and telephone corporations to employ every means to ensure that every qualified household is informed and afforded the opportunity to subscribe to the service. (Public Utilities Code (PUC) Section 871 et seq.)
2. Establishes the ULTSAC, which is an advisory board to advise the CPUC regarding the development, implementation, and administration of a program to ensure lifeline telephone service is available to the people of the state, as specified, and to carry out the program pursuant to the CPUC’s direction, control, and approval. (PUC Section 277)
3. Established a Low-Income Oversight Board to advise the CPUC on low-income electric, gas, and water customer issues and to serve as a liaison for the CPUC to low-income ratepayers and representatives. (PUC Section 382.1)
4. Requires the CPUC to 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. Develop eligibility criteria for that service; and,
   4. Assess the degree of achievement of universal service, including telephone penetration rates by income, ethnicity, and geography. (PUC Section 873)
5. Specifies that the lifeline telephone service rates and charges shall be as follows:
   1. 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; and,
   2. 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; or,
      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. (PUC Section 874)
6. Requires the CPUC to 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 CPUC. (PUC Section 876)
7. Requires a lifeline telephone service subscriber to be provided with one lifeline subscription, as defined by the CPUC, 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. (PUC Section 878)
8. Requires the CPUC to require interconnected Voice over Internet Protocol (VoIP) service providers to collect and remit surcharges on their California intrastate revenues in support of specified public purpose program funds. (PUC Section 285)

FISCAL EFFECT: Unknown. This bill has been keyed fiscal by the Legislative Counsel.

COMMENTS:

1. Author’s Statement: According to the author, “The Lifeline Oversight Board represents a restructuring of the existing ULTSAC. This restructure will clarify the scope of the duties and responsibilities of the Board at this critical juncture. The [Lifeline Oversight Board] will more effectively and efficiently uphold the original intent of the board to advise the [CPUC] on practical development, implementation, and administration of the low-income landline and cellphone program. This would in turn strengthen the ability of this program to provide better service to a larger number of deserving low-income households.”
2. Background: Ensuring that everyone has access to safe, reliable, and high-quality telecommunications service is a bedrock principle of telecommunications policy. The CPUC is tasked with developing and implementing programs to advance universal access to necessary services, such as telephone and broadband services. To do so, the CPUC implements a number of public programs to promote universal service, including the California High Cost Fund-A, California High Cost Fund-B, the California LifeLine Program, the California Teleconnect Fund, the Deaf & Disabled Telecommunications Program, and the California Advanced Services Fund.

Such universal service programs are generally developed to provide support either for providers in areas of the state where it might not make economic sense to provide telecommunications services due to the difficulties in building and/or providing services, such as rural, remote, and sparsely populated areas; or support for individuals who are low income, deaf and disabled, or living in or serving disadvantage communities and institutions, that otherwise might struggle to access affordable telecommunications services. Universal service programs serve to give as many subscribers as possible access to the telecommunications network; further complimenting the network and advancing the State’s telecommunications objectives.

The universal service programs are funded through a surcharge on each customer’s phone bill for landline, wireless, and VoIP services. The surcharge for each program is typically adjusted on an annual basis to ensure adequate funding to cover carrier claims and administrative costs. As of March 1, 2018, the total surcharge for all universal service programs is 7.24 percent of each customer’s phone bill for intrastate telecommunications service.

1. California LifeLine Program: The California LifeLine Program was created in 1984 following the enactment of the Moore Universal Telephone Service Act to provide access for low-income households to affordable basic residential telephone service. The California LifeLine Program helps consumers lower the cost of their phone bills by providing discounts for home phone and cell phone service to qualified California residents. The California LifeLine Program works in conjunction with the federal LifeLine program which provides an additional discount on phone service for qualifying low-income consumers. Together each program participant can currently receive a monthly maximum discount of $14.30 from the California LifeLine Program in addition to a monthly maximum discount of $9.25 from the Federal LifeLine Program. As of March 1, 2018, the surcharge for Universal Lifeline Telephone Service is 4.75 percent of each customer’s phone bill for intrastate telecommunications service.

To qualify for LifeLine, consumers must be enrolled in certain public assistance programs, such as, Medicaid/Medi-Cal; Supplemental Security Income; CalFresh, Food Stamps or Supplemental Nutrition Assistance Program; Women, Infants and Children Program; National School Lunch Program, among others. In addition, consumer may also qualify if their household’s total annual gross income is less than a specified amount. Only one LifeLine discount is allowed per household for each residential address. As of January 2018, there are approximately 1.77 million participants in the California LifeLine Program.

1. Universal Lifeline Telephone Service Trust Administrative Committee: In 1999, the Legislature passed SB 669 (Polanco) Chapter 677, Statutes of 1999, which established the ULTSAC as an advisory board tasked with advising the CPUC on the development, implementation, and administration of the California LifeLine Program. In 2001, SB 742 (Escutia), Chapter 118, Statutes of 2001, transferred the California Lifeline Program under the state’s fiscal and budgetary control. Hence, ULTSAC acts as an advisory board to the CPUC, but the CPUC is responsible for implementing and overseeing the California LifeLine Program.

The CPUC Executive Director is tasked with selecting and approving members on the ULTSAC. Members remain on the board until a successor has been appointed or until the member has been removed or resigns. In March 2018, the CPUC added two additional members to the ULTSAC; a representative from a wireless carrier, and an individual or organization representing the interest of either the deaf or disabled users of Lifeline. The CPUC noted that it was reasonable to add these new members to the board because the program has experienced significant increase in both overall lifeline participants and reimbursement request from lifeline wireless service providers since the introduction of wireless service to the program in 2014. In addition, adding a representative from the deaf or disable community further aligns the board with other public purpose programs.

As a result, the ULTSAC is currently composed of 11 members consisting of the following representatives: a large or mid-sized local exchange carrier (LEC); a small LEC; an inter-exchange carrier, or competitive local exchange carrier (CLEC); a wireless carrier; two consumer organizations, as specified; three CBOs; one individual or organization representing the interest of either the deaf or disabled users of the Lifeline program; and the CPUC’s Office of Ratepayer Advocates.

Aside from the two new positions recently added, the ULTSAC currently has filled five out of the nine other representative positions: one large LEC, one small LEC, one CLEC, one consumer organization, and one representative from the Office of Ratepayer Advocates. Five positions remained vacant, including two consumer organizations and three CBO positions.

According to the author, many of the consumer positions previously held by ratepayer advocates or CBO representatives have been left vacant due to issues regarding the committee’s charter. Particularly there are concerns that the scope of the board’s responsibilities have not kept pace with the need to promote and strengthen the program. This bill would establish the LifeLine Oversight Board and task it with advising the CPUC on the lifeline program. According to the author, restructuring the existing ULTSAC with the LifeLine Oversight Board would clarify the scope of duties and responsibilities of the board which will more effectively and efficiently uphold the original intent of the board. However, seeing that there remain a number of vacancies on the current ULTSAC board, it is unclear if creating a new makeup of the board, which includes adding additional positions, would serve to advance the purpose of the board.

The author may wish to consider an amendment to better align the membership of the LifeLine Oversight Board with the existing makeup of the ULTSAC board.

1. Suggested Amendment:

871.9 (b) The Lifeline Oversight Board shall be composed of 13 11 members to be selected by the commission as follows:

(1) One member who is a representative of a large or mid-sized local exchange carrier.

(2) One member who is a representative of a small local exchange carrier.

(3) One member who is a representative of an inter-exchange carrier or a competitive local exchange carrier.

(4) One member who is a representative of a wireless carrier.

(5) Two members who are representatives of consumer organizations, each of whom represents a different constituency, based on geographic or economic criteria, on language, or on other criteria which reasonably influence lack of access to basic telephone service.

(6) Three members who are representatives of community based organizations, each of whom represents a different constituency, based upon geographic or economic criteria, on language, or other criteria which reasonably influence lack of access to basic telephone service.

(7) One member who is an individual or a representative of an organization representing the interests of either the deaf or disabled users of the Universal Lifeline Telephone Service program.

(8) One member who is a representative of the Office of Ratepayer Advocates.

(1) Six members, selected by the commission, who have expertise in, and experience working with, low-income communities and who are not employed by, or by corporate affiliates of, any state agency or telecommunications or communications corporate entity. These members shall be selected in a manner to ensure an equitable geographic and community-of-interest distribution.

(2) One member, selected by the Governor, who is a representative of the Governor’s office.

(3) One member, selected by the Governor, who is a representative of the Department of Technology or a similar state agency.

(4) One member, selected by the commission, who is a commissioner or commissioner designee.

(5) One member, selected by the commission, who is a representative of the Office of Ratepayer Advocates.

(6) One member, selected by the commission, who is a representative of a lifeline wireline telephone service provider.

(7) One member, selected by the commission, who is a representative of a lifeline mobile telephony service provider that is unaffiliated with a wireline telephone corporation that offers lifeline services.

(8) One member, selected by the commission, who is a representative of a wireline telephone service provider that is a small independent telephone corporation subject to Section 275.6.

1. Arguments in Support: According to The Utility Reform Network, the sponsor of the bill, “In order to achieve higher [Lifeline] participation rates, the Legislature and CPUC created the consumer-majority advisory board, the [ULTSAC], made up of nine members to represent the interests of telecommunication carriers and ratepayers. Unfortunately, many of the consumer positions previously held by ratepayer advocates and [CBOs] are currently vacant. The scope of the committee’s responsibilities have simply not kept pace with the need to promote and strengthen the program. AB 2537 seeks to restructure the existing committee and clarify the duties and responsibilities of the proposed Board. With a growing population of eligible ratepayers, it is critical that we effectively and efficiently uphold the intent of the Lifeline program. Enshrining this Board into statute will help to ensure a successful lifeline program.”
2. Related Legislation: AB 2652 (Quirk) of 2018 requires the CPUC to adopt a portability freeze and a rule to improve the cost-effectiveness of the delivery of the California LifeLine Program. Status: Pending in the Assembly Committee on Communications and Conveyance.

AB 3111 (E. Garcia) of 2018 requires the CPUC, in consultation with the Department of Corrections and Rehabilitation, and the Department of Veteran Affairs, to develop outreach and enrollment programs for the California LifeLine Program for the formerly incarcerated and veterans. Status: Pending in the Assembly Committee on Communications and Conveyance.

1. Previous Legislation: AB 2570 (Quirk) of 2016 required the CPUC to adopt a portability freeze rule for the California LifeLine Program that limits the ability of subscribers to change services. Status: Chaptered by the Secretary of State, Chapter 577, Statutes of 2016.

AB 2213 (Fuentes) of 2010 replaced the definition of “residential” for California’s low-income residential telephone service with a definition of “household” and defines household as a residential dwelling that is the principal place of residence of the lifeline telephone service subscriber. Status: Chaptered by the Secretary of State, Chapter 381, Statutes of 2010.

SB 742 (Escutia) of 2001 provided for an orderly transition of the Universal Service Telephone Programs, including the Universal Lifeline Telephone Service Program, to state fiscal and budgetary control. Status: Chaptered by the Secretary of State, Chapter 118, Statutes of 2001.

SB 669 (Polanco) of 1999 codified six existing CPUC advisory boards, including the ULTSAC, and requires the CPUC to administer the revenues used to fund the boards’ activities. Status: Chaptered by the Secretary of State, Chapter 677, Statutes of 1999.

REGISTERED SUPPORT / OPPOSITION:

Support

The Utility Reform Network (sponsor)

Afghan Coalition

Armenian Relief Society of Western USA

Asian -American Resource Center

California Church IMPACT

Casa Familiar

City of Huron

Coalition for Economic Survival

Deaf Community Services of San Diego

Good Samaritan Family Resource Center, Inc.

International Institute of Los Angeles

Korean American Community Services

Little Tokyo Service Center

Madera Coalition for Community Justice

Milestone Consulting, LLC

Portuguese Organization for Social Services and Opportunity

Southeast Asian Community Center

Suscol Intertribal Council

Tenderloin Housing Clinic & Central City S.R.O. Collaborative

Opposition

None on file.

Analysis Prepared by: Edmond Cheung / C. & C. / (916) 319-2637

Date of Hearing: May 16, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2537

Author:(Carrillo) – As Amended Ver:April 30, 2018

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill establishes the Lifeline Oversight Board to advise the California Public Utilities Commission (CPUC) on the California LifeLine Program. Specifically, this bill:

1. Repeals the existing Universal Lifeline Telephone Service Trust Administrative Committee (ULTSTAC) and replaces it with the Lifeline Oversight Board to serve as a liaison between the CPUC and low-income subscribers and their representatives to carry out the program pursuant to the commission’s direction, control, and approval.
2. Establishes the board membership at 11 and prescribes membership of specified backgrounds.
3. Prescribes responsibilities of the board, including monitoring and evaluating implementation of the lifeline program.
4. Directs the CPUC to undertake a number of actions in conjunction with the board, including:
   1. Establish a 90% lifeline participation goal for all eligible California households.
   2. Assign staff and provide technical support to the board, and work with the board, interested parties, and community-based organizations to increase participation in the lifeline program.
   3. Ensure the needs of low-income lifeline subscribers are met.
   4. Provide formal notice of board meetings in the commission’s daily calendar.

FISCAL EFFECT:

1. Annual, ongoing costs to the CPUC, likely less than $150,000 for the CPUC to staff and support the work of the board.
2. Ongoing annual special fund costs to CPUC, for staff and contracting, to solicit, receive, and coordinate stakeholder input; and develop, implement, and assess new, revised, and expanded marketing-and-outreach campaigns and materials. The CPUC reports these activities and staffing will cost several millions of dollars annually. These costs are largely driven by the bill’s requirement that CPUC establish a goal of enrolling 90% of all individuals statewide who are eligible to participate in the lifeline program.

COMMENTS:

1. Purpose. According to the author:

The Lifeline Oversight Board represents a restructuring of the existing ULTSAC. This restructure will clarify the scope of the duties and responsibilities of the Board at this critical juncture. The [Lifeline Oversight Board] will more effectively and efficiently uphold the original intent of the board to advise the [CPUC] on practical development, implementation, and administration of the low-income landline and cellphone program. This would in turn strengthen the ability of this program to provide better service to a larger number of deserving low-income households.

1. Background. The California LifeLine Program is one of several programs administered by the CPUC to further the goal of universal access to telecommunications service. LifeLine does so by subsidizing the landline and cellular service of low-income Californians who qualify for the program. A surcharge on each Californian’s telecommunications bill funds the LifeLine program. The current surcharge is 4.75% of each bill’s total.

Currently, the California LifeLine Program offers a monthly subsidy of up to $14.30. The federal lifeline program, also administered by CPUC, offers an additional subsidy of up to $9.25. Individuals may qualify for the lifeline subsidies a couple of ways—either by showing participation in any one of several programs to help low-income individuals, such as Medi-Cal and CalFresh, or by demonstrating household income falls within certain parameters. Statute limits program participation to only one LifeLine discount per household.

Statute establishes the ULTSAC to advise the CPUC regarding the development, implementation, and administration of a program to ensure lifeline telephone service is available to the people of the state. ULTSAC membership is comprised of representatives of larger and small landline companies, wireless carriers, consumer organizations, community-based organizations, the deaf/hearing impaired or disabled communities, and Office of Ratepayer Advocate.

The CPUC reports 1.8 million Californians currently participate in the lifeline program, a number that represents only 41% of those eligible to participate. The CPUC contends it is difficult, and costly, to increase program participation significantly, and that difficulty—and cost—expands considerably as the program attempts to increase participation to something near all eligible participants. Therefore, the author could reduce the costs of this bill substantially were the bill to be amended to delete the 90% goal or to express such a goal through some sort of intent language.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081