13. California Teleconnect Fund

Section 280 requires the Commission to, among other things, "develop, implement, and administer a program to advance universal service by providing discounted rates to qualifying schools...libraries, hospitals, health clinics, and community organizations, consistent with Chapter 278 of Statutes of 1994."¹²⁴ This program is referred to as the California Teleconnect Fund. Section 280 also delegates to the Commission the responsibility to develop a funding mechanism for this program. The pertinent statutory language provides as follows: "[a]ll revenues collected by telephone corporations in rates authorized by the commission to fund the program...shall be submitted to the commission pursuant to a schedule established by the commission."¹²⁵

In D.96-10-066, the Commission implemented a funding mechanism for the California Teleconnect Fund and found that, similar to the California High Cost Fund-B "all end-users of every LEC, IEC, cellular, and paging company in the state..."(including all CMRS providers, except for one way paging) should be included in the billing base...."¹²⁶

Similar to the universal lifeline and the other surcharges, discussed above, the Commission in D.96-10-066 explicitly included cellular service, such as TracFone's, as one of the services subject to the California Teleconnect Fund.

TracFone argues that it is not responsible for the payment of the California Teleconnect Fund surcharge for the same reasons that it is not responsible for the universal lifeline surcharge. TracFone's central argument is that the debit card exemption, discussed above, serves to exempt its prepaid wireless services from the California Teleconnect Fund surcharge. TracFone makes other more minor arguments as well. These arguments are all addressed above. We disagree with TracFone's reasoning.

We find that TracFone is ultimately responsible for payment of the surcharge to fund the California Teleconnect Fund surcharge set forth in §§ 280 et seq. The relevant statutory framework for the universal lifeline surcharge and the California Teleconnect Fund surcharge are the same. As a result, our decision finding TracFone's service subject to the California Teleconnect Fund surcharge and responsible for payment of this surcharge is based on the same reasoning set forth above regarding the universal lifeline surcharge. We further find TracFone acted unlawfully by failing to pay this California Teleconnect Fund surcharge.

¹²⁴ § 280(a), referring to Chapter 278 of Statutes of 1994, which was AB 3643. AB 3643, chaptered on July 21, 1994, required the Commission to institute an investigation and open a proceeding to examine the current and future definitions of universal service.

¹²⁵ § 280(c).

¹²⁶ D.96-10-066, 1996 Cal. PUC LEXIS 1046 *123, stating that The California Teleconnect Fund shall be funded in the same manner and upon the same billing base as the CHCF-B, as discussed later in this decision and *288.