California High Cost Fund-B

Background

The California High Cost Fund-B (CHCF-B) was implemented in accordance with Public Utilities Code § 739.3 (now § 276.5). It provides subsidies to carriers of last resort (COLRs) for providing basic local telephone service to residential customers in high-cost areas that are currently served by Pacific Bell Telephone Company dba AT&T California, Verizon California Inc., Citizens Telecommunications Company of California dba Frontier Communications of California, and Cox Communications. The purpose of the subsidies is to keep basic telephone service affordable and to meet the Commission’s universal service goal.

High cost areas of California are those in which the cost to the COLR to provide service is $36 or more per telephone line. The downloadable file below contains a list of high cost 2010 Census Block Groups (CBGs) and the associated cost of service per landline within each CBG where the cost is $36 or more per line, according to the Cost Proxy Update Provision adopted by Commission Decision (D.) 14-06-008 in Rulemaking (R.) 09-06-019. The Census Block Groups are in the “Excel Workbook" file format. Download.

Please click here for the September 30, 2014 Administrative Letter from Communications Division to CHCF-B Carriers regarding the implementation of 2010 Census Block Groups (CBGs) for the filing CHCF-B Monthly Claims Pursuant to Decision (D.)14-06-008.

CHCF-B is funded by an all-end-user surcharge billed and collected by telecommunications carriers which, in turn, remit the surcharge monies to the Commission for CHCF-B program administration. Procedures for the administration of CHCF-B and guidelines for qualification of COLR are set forth in the Adopted Universal Service Rules adopted by the Commission in D. 96-10-066.

The five Incumbent Local Exchange Carriers (ILECs) in California that receive CHCF-B support are:

Citizens Telecommunications Company of CA
Consolidated Communications of CA Company
Frontier California, Inc.
Frontier Communications of the Southwest
Pacific Bell (dba AT&T California)

Map of ILECs territories - Please note this map includes an overlay of CHCF-A territories.

CHCF-B Administrative Committee

The CHCF-B Administrative Committee (AC) is the advisory board for the CHCF-B. The above link contains information about the CHCF-B annual budgets, adopted minutes from AC meetings, the current CHCF-B AC membership and the latest CHCF-B annual report.

Important Decisions and Resolutions Impacting the CHCF-B

In Decision (D.) 07-09-020, the Commission adopted the increase of the CHCF-B high-cost benchmark threshold level from $20.30 to $36 per line. Raising the threshold level significantly reduced the number of access lines eligible for high-cost support, although COLRs still served certain regions that reflected cost proxies above the threshold, based on the data utilized as adopted in D.96‑10‑066. This increase in the threshold level allowed the CHCF-B to target support levels more efficiently to cover only those “high cost” areas where funding is necessary to meet universal service goals. The act of updating the benchmark threshold level reduced the overall amount of high cost support provided to COLRs, and produced a significant consumer benefit as the surcharge on all California consumer bills has been reduced.

In D.12-12-038, the Commission adopted updated requirements for residential basic telephone service (basic service) and an updated list of service elements that comprise residential basic telephone service, along with the related requirements for offering these service elements.

On December 5, 2013, the Commission approved Resolution T-17417 which adopted a surcharge rate reduction from 0.30% to 0.00% for the California High Cost Fund-B (CHCF-B) Program. The surcharge rate reduction was due to an existing fiscal surplus in the B Fund. All regulated telecommunication carriers were instructed to revise the CHCF- B surcharge rate from 0.30% to 0.00% on their respective end-user charges billed for intrastate telecommunications services beginning February 1, 2014.

In D.14-06-008, the Commission adopted methodologies and algorithms necessary to remap 1990 households from their 1990 Census Block Groups (CBGs) to CBGs based on the more recent 2010 census. A July 10, 2013 workshop was held to better understand how the remapping of 1990 CBG data translates into impacts on the size of the B-Fund, and changes in B-Fund support payments to qualifying carriers.

A hard copy of Commission decisions/orders can be obtained for a fee by calling 415-703-2045. Questions about this program should be directed to Dorris Chow at dorris.chow@cpuc.ca.gov.