Article 8. Universal Telephone Service of California Public Utilities Code >> Division 1. >> Part 1. >> Chapter 4. >> Article 8.
This article shall be known and may be cited as the Moore
Universal Telephone Service Act.
The Legislature finds and declares all of the following:
(a) The offering of high-quality basic telephone 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, an important means for achieving universal service
by making basic telephone service affordable to low-income households
through the creation of a lifeline class of service.
(c) Every means should be employed by the commission and telephone
corporations to ensure that every household qualified to receive
lifeline telephone service is informed of and is afforded the
opportunity to subscribe to that service.
(d) The furnishing of lifeline telephone service is in the public
interest and should be supported fairly and equitably by every
telephone corporation, and 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.
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
(2) Expanding access to public and private resources for
education, training, and commerce.
(3) Increasing access to public resources enhancing public health
(4) Assisting in bridging the "digital divide" through expanded
access to new technologies by low-income, disabled, or otherwise
(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
(3) Benefits that justify the costs.
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.
(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) Develop eligibility criteria for that service.
(4) Assess the degree of achievement of universal service,
including telephone penetration rates by income, ethnicity, and
(b) Minimum communications needs includes, but is not limited to,
the ability to originate and receive calls and the ability to access
electronic information services.
The lifeline telephone service rates and charges shall be as
(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
(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
(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
(d) There shall be no charge to the residential customer who has
filed a valid eligibility statement for changing out of lifeline
(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.
(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
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.
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.
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.
(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.
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.
The commission may determine any question of fact in its
administration of this article.
(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
(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
(c) In the proceeding or proceedings, the commission should also
consider, but need not limit its consideration to, all of the
(1) Whether the definition of universal service should be
(2) How to encourage the timely and economic development of an
advanced public communications infrastructure, which may include a
variety of competitive providers.
(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
(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
(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
(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
(D) Assistance in bridging the "digital divide" through expanded
access to new technologies by low income, disabled, or otherwise
(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
(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
(e) The commission shall complete its investigation and report to
the Legislature its findings and recommendations on or before January
(a) It is the intent of the Legislature that any program
administered by the commission that addresses the inequality of
access to high-speed broadband services by providing those services
to schools and libraries at a discounted price, provide comparable
discounts to a nonprofit community technology program.
(b) Notwithstanding any other law or existing program of the
commission, but consistent with the purposes for which those funds
were appropriated from the California Teleconnect Fund Administrative
Committee Fund in Item 8660-001-0493 of Section 2.00 of the Budget
Act of 2003 (Chapter 157 of the Statutes of 2003), and reappropriated
in Item 8660-491 of Section 2.00 of the Budget Act of 2006 (Chapter
47 of the Statutes of 2006), the commission may expend up to two
million dollars ($2,000,000) of the unencumbered amount of those
funds for the nonrecurring installation costs for high-speed
broadband services for community organizations that are eligible for
discounted rates pursuant to Section 280.
(c) For the purpose of this section:
(1) "High-speed broadband services" means a system for the digital
transmission of information over the Internet at a speed of at least
384 kilobits per second.
(2) "Nonprofit community technology program" means a
community-based nonprofit organization that is exempt from taxation
under Section 501(c)(3) of the Internal Revenue Code and engages in
diffusing technology into local communities and training local
communities that have no access to, or have limited access to, the
Internet and advanced telecommunications technologies.
(a) This section shall apply to all customers eligible to
receive discounts for telecommunications services under the federal
Universal Service E-rate program administered by the Schools and
Libraries Division of the Universal Service Administrative Company
that also apply for discounts on telecommunications services provided
through the California Teleconnect Fund Administrative Committee
Fund program pursuant to subdivision (a) of Section 280.
(b) A teleconnect discount shall be applied after applying an
E-rate discount. The commission shall first apply an E-rate discount,
regardless of whether the customer has applied for an E-rate
discount or has been approved, if the customer, in the determination
of the commission, meets the eligibility requirements for an E-rate
(c) Notwithstanding subdivision (b), the teleconnect discount
shall be applied without regard to an E-rate discount for a school
district that meets the conditions specified for compensation
pursuant to Article 4 (commencing with Section 42280) of Chapter 7 of
Part 24 of Division 3 of Title 2 of the Education Code, unless that
school district has applied for, and been approved to receive, the
(d) In establishing a discount under the California Teleconnect
Fund Administrative Committee Fund program, the commission shall give
priority to bridging the "digital divide" by encouraging expanded
access to state-of-the-art technologies for rural, inner-city,
low-income, and disabled Californians.
(e) As used in this section:
(1) "E-rate discount" means an actual discount under the E-rate
program, or a representative discount figure as determined by the
(2) "E-rate program" means the federal Universal Service E-rate
program administered by the Schools and Libraries Division of the
Universal Service Administrative Company.
(3) "Teleconnect discount" means a discount on telecommunications
services provided through the California Teleconnect Fund
Administrative Committee Fund program set forth in subdivision (a) of