Rulemaking to Conduct a Comprehensive Examination of the California Teleconnect Fund

In 1996, when the CTF was created to encourage adoption of “advanced communications” this meant access to telephones and to dial-up Internet connections available in computer labs. Technology has changed considerably since then and the Fund has grown from $60 million in 2009-2010 to distributing more than $108 million in discounts in 2014-2015. The budget increases reflect growing demand from educational institutions, like community colleges, and other new program participants.

In response to the technology changes and the growth of the Fund, a Rulemaking to Conduct a Comprehensive Examination of the California Teleconnect Fund was issued by the CPUC on January 31, 2013, to examine whether the California Teleconnect Fund (CTF) was fulfilling its purpose and whether the CTF’s current structure and administrative process are adequate to further the programs goals. The CPUC also reaffirmed its commitment to bringing the benefits of advanced communications services to all Californians, while also ensuring that California ratepayer money is spent prudently.

The Rulemaking was divided into 3 Phases, with Phase I to cover revising the program goals, Phase II to cover new rules for participation and eligibility, and Phase III to cover implementation details. When it became clear that the goals and the eligibility criteria were inextricably linked, Phases I and II were combined and on July 7, 2015 the Commissioners issued a decision on Phases I and II. The Decision details revised goals and new criteria for participation for both recipients and telecommunications/internet providers.

Phase I & II

During the decision making process for Phases I & II, CalNonprofits and our allies focused on a few primary issues to keep the Commissioners from disqualifying organizations that served low income communities, rural communities, and communities of color. You can find our complete filings here, but a few of the highlights included:

1. The CTF Staff proposed that only CBOs that serve communities with a median household income below 150% of the poverty line be eligible for the CTF, with “community” defined by zip code. We argued that income levels and household Internet adoption rates vary widely within a given zip code, making this an arbitrary standard contrary to the intent of the CTF program.
2. We argued that sometimes the services provided by the CBO include giving individuals “direct access,” as in a computer lab, but often the services include “indirect access,” as in the case of a social service agency that uses the Internet to provide referrals for clients, or in cases where clients have a disability, have not or cannot learn to use a computer or effectively search the Internet, or those who do not speak English.
3. We argued that voice and VoIP services continue to be included in the discount, particularly given that in many areas these are the most advanced communications technologies affordable and/or available.
4. In response to the Proposed Decision, we argued that the criteria that a CBO must provide 50% or more CTF-eligible services to qualify for the discount misunderstands the complexity of CBOs, many of which are designed to offer a variety of services in one place. For example, a youth serving organization that offers tutoring and job training would be eligible for the CTF, but if they grow to offer substance abuse counseling, homeless teen outreach, and day care for teen mothers to attend school, the job training program is no longer 50% of their services thus disqualifying the organization.
5. The CTF is currently available to organizations that have budgets under $50 million. The new rules change the cap to $5 million. We argued strenuously against this disincentive to growth and efficiency through mergers.

Phase III

There are several implementation and clarification issues that need to be resolved before the new rules take effect. For complete details see Scoping Memo. We are hoping to influence several key implementation issues to make the soften the impact of the changes on CBOs. These include:

• Figuring out a fair way to allow CBOs to request exemption from reduced support for voice-only services, including VoIP. A Decision released in April 2016 clarified the exemption criteria (here).
• Making sure the documentation requirements for qualification and ongoing re-certification are not burdensome for CBOs.
• Finding a fair way to determine how much of a given Internet connection (for example, a T1 line) is used for program delivery and how much is used for administrative purposes (and thus not eligible for the discount).

If you're interested in supporting our efforts to improve the CTF program for nonprofits, please contact Christina Dragonetti for ways you can help, or to see the Comments CalNonprofits has filed on Phase III issues.