1 California Advanced Services Fund Broadband Summit: Connecting America FCC-NARUC Joint Conference on Advanced Services Rachelle Chong Commissioner California Public Utilities Commission November 6, 2008

2 Overview In 2007, the California Broadband Task Force determined investment in broadband infrastructure is just as important as investment in other critical infrastructure, such as roads, electricity, and water. To meet this goal, the California Public Utilities Commission sought to bring broadband to unserved and underserved areas, resulting in the creation the California Advanced Services Fund (CASF) at the end of 2007.

3 CBTF Identified Areas Without Broadband Good news: The California Broadband Taskforce mapped broadband availability throughout the state and found 96% of California residences had access to some level of broadband. Bad News: 1.4 million people live in the 4% of the state without access to broadband. Half of Californians have access to broadband at speeds greater than 10 Mbps (including both upstream and downstream speeds).

4 CBTF Mapping Included Service Speeds

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6 California Advanced Services Fund The CPUC determined that – in an era where broadband services had been growing in both breadth and download speed offerings – that market failure was occurring in unserved and underserved areas of the state CASF created to help address the problem and close the gap

7 Calif. Advanced Service Fund Overview CASF will collect $100 million over two years from a 0.25% surcharge on consumer’s intrastate telephone bill Funds will be allocated to broadband providers to build infrastructure to provide service to the unserved areas CASF will award funds through a technology neutral application process to cover 40% of the project costs Enacted into legislation in 2008 to streamline processes and provide appropriate legislative oversight

8 First Round of CASF Applications First set of applications submitted in July projects requested support of $35 million Some of the applicant were not ILECs or cable providers. Over 102,000 households would gain access to broadband capabilities, raising broadband availability measure to 97%

9 CASF Lessons Learned and Next Steps Speed is of the essence to bring broadband to our citizens. Traditional providers are not the only option. Concern that 40% match may not attract additional applications for remaining unserved areas; money is still left in fund. CPUC seeking input on program improvements - to be considered in 2009.

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