CPUC hikes surcharge to fill broadband subsidy fund faster

9 February 2014 by Steve Blum
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Pennies add up.

Half a percent would be added to phone bills to top up the California Advanced Services Fund (CASF), if a proposal now under review is approved. Last year, the state legislature gave the California Public Utilities Commission permission to collect an additional $90 million for CASF by extending a tax on landline and Internet telephone service through 2020. It’s up to the commission to determine how much that surcharge will be, within limits set by the legislature.

Lawmakers also decided that “the goal of the CASF program is, no later than December 31, 2015, to approve funding for infrastructure projects that will provide broadband access to no less than 98% of California households”. And they established a program for building and marketing broadband facilities in public housing, with a 2016 deadline. All of which makes waiting until 2020 to finish collecting the money problematic.

A draft resolution – scheduled to be considered on 27 February 2014 – solves that problem by boosting the CASF surcharge from its current level of less than two-tenths of a percent (0.164%) to about half a percent (.464%), adding a total of $157 million to the fund by mid–2016. That amount includes money previously approved for collection by the legislature, in addition to the extra $90 million added last year. According to the resolution, the grand total of all CPUC consumer phone taxes will stay the same, though, because another surcharge, to subsidise plain old telephone service, is ending.

If approved, the new half-percent CASF rate will take effect in April.