This article is part of the Richard Polanco Legislative Archive. Every fact is sourced. Where Polanco’s role is the principal author of a bill, the article says so. Where the role is anything other, that distinction is preserved.
The Laws
| Bill 1 | AB 3643 |
| Author 1 | Assemblyman Richard Polanco and Assemblyman Jack Moore |
| Session 1 | 1993–1994 |
| Signed 1 | 1994, by Governor Pete Wilson |
| Chapter 1 | 278, Statutes of 1994 |
| Polanco’s Role 1 | Principal Coauthor |
| Current Code 1 | California Public Utilities Code §§ 871.7, 883 |
| Bill 2 | SB 1563 |
| Author 2 | Senator Richard Polanco (Democrat, 22nd Senate District) |
| Session 2 | 2001–2002 |
| Signed 2 | September 18, 2002, by Governor Gray Davis |
| Chapter 2 | 674, Statutes of 2002 |
| Polanco’s Role 2 | Principal Author |
| Current Code 2 | California Public Utilities Code § 709 |
The Problem
In 1994, “universal telephone service” in California still meant a single black rotary phone on the kitchen wall. The Universal Lifeline Telephone Service Act, the Moore Universal Telephone Service Act of 1987, and the 1980s-era Lifeline programs were built around a copper-wire voice service. But the technology was changing. Cellular was moving from luxury to commodity. The first commercial internet service providers were opening for business. Digital switching was replacing analog. By the early 1990s, the gap between what was technologically possible and what California law treated as “universal” was widening every year.
The gap hit low-income, rural, and minority communities hardest. The 17 elements that the CPUC then defined as “basic service” were all voice-service elements: the ability to place calls, the ability to receive free unlimited incoming calls, Lifeline discounted rates. None of them were data, none of them were broadband, none of them were video. As the rest of the economy moved to digital communications, the people on the wrong side of the affordability line were being left on the wrong side of a fundamentally different definition of “basic.”
The 1994 bill, AB 3643, was written to ask the question: when technologies change, should “universal service” change with them? It was the first California statute to put the question on the table. The CPUC decision that followed it, D.96-10-066, gave California the California Teleconnect Fund. The 2002 bill, SB 1563, was the follow-up. By 2002, broadband was the new “basic service.” SB 1563 directed the CPUC to develop a plan for encouraging the widespread availability of advanced communications infrastructure, including broadband.
What Polanco Proposed
AB 3643 (1994)
AB 3643 directed the California Public Utilities Commission to open a proceeding to consider whether the definition of “universal service” should be broadened to include non-voice telecommunications, including data and video services, and to consider whether the 17-element definition of “basic service” needed to be updated to reflect the actual communications market of the 1990s. The bill required public hearings and a final CPUC decision.
The CPUC decision, D.96-10-066 (October 25, 1996), did three things. First, it confirmed the 17 elements of basic service and defined universal service as the principle that basic service should be available to virtually everyone in California at affordable rates. Second, it created the California Teleconnect Fund, a new state program that provided discounts on selected telecommunications services to schools, libraries, and community-based organizations. Third, it set up a framework for the CPUC to revisit the definition of basic service every three years.
SB 1563 (2002)
By 2002, the question AB 3643 had asked was no longer theoretical. Broadband internet access was becoming the new basic service for education, employment, healthcare, and civic participation. SB 1563 directed the CPUC to convene a new proceeding to develop a plan for encouraging the widespread availability of advanced communications infrastructure. The bill explicitly identified the “digital divide” by name in the statute, and it explicitly required the CPUC to seek input from community-based organizations, including nonprofit community technology programs.
The CPUC decision that followed, D.05-05-013, produced the report Broadband Deployment in California, the first comprehensive California state report on broadband access and the digital divide.
The Fight
AB 3643 passed both houses of the California Legislature in 1994 with bipartisan support, and was signed by Governor Pete Wilson. The bill was a study mandate, not a regulatory mandate, which made it easier to pass than a more aggressive bill would have been.
SB 1563 faced a more difficult environment in 2002. The state was still in the early stages of the post-9/11 economic shock, and telecommunications policy was politically charged. The bill passed the Senate Utilities & Commerce Committee 10–0 and the Senate Appropriations Committee 21–0, and was signed by Governor Davis. The 30–3 Senate floor vote (with one abstention) was unusually broad for a telecom bill of that period.
Polanco was Senate Majority Leader during the 2001–2002 session, and his authorship of the bill gave it political weight. The bill was the last major piece of legislation Polanco authored before his retirement in November 2002.
What Polanco Did
Richard Polanco was the principal coauthor of AB 3643 in 1994 (the lead coauthor was Assemblyman Jack Moore), and the sole principal author of SB 1563 in 2002. The two bills, taken together, are the legislative spine of California digital-equity policy. The Teleconnect Fund that AB 3643 produced is still in operation. The broadband deployment plan that SB 1563 produced became the foundation for later California broadband programs including the California Advanced Services Fund (CASF) and the California Broadband Council.
Polanco’s contribution is not that he invented the term “digital divide.” He didn’t. The term was already in use in the early 1990s. His contribution is that he was the legislator who, in 1994, asked the CPUC to begin the formal work of redefining universal service to include data and video, and in 2002, asked the CPUC to plan for universal broadband. Both of those asks, the 1994 one and the 2002 one, were ahead of where the federal government was at the time. The federal “e-Rate” program — the federal Schools and Libraries Universal Service program — was created in 1996, two years after AB 3643. The federal Telecommunications Act of 1996 came the same year as D.96-10-066. The federal Connect America Fund and the federal Lifeline modernization order for broadband did not come until the 2010s.
What Changed
AB 3643 and SB 1563 did four durable things in California law.
1. They created the California Teleconnect Fund.
The California Teleconnect Fund, established by D.96-10-066 under the authority of AB 3643, is still in operation in 2026. The Fund provides discounts on telecommunications services to California schools, libraries, community-based organizations, and other eligible entities. The Fund is supported by an All End User Surcharge applied to intrastate-billed services. In 2025, the CTF continued to serve as one of California’s primary telecom affordability programs.
2. They established the policy framework for later California broadband programs.
The CPUC’s Broadband Deployment in California report (D.05-05-013), produced under SB 1563, is the foundational document for California’s later broadband programs. The California Advanced Services Fund (CASF), the California Teleconnect Fund, the California Broadband Council, and the subsequent California broadband initiatives all draw on the analytical framework that SB 1563 put in place.
3. They named the digital divide in California statute.
SB 1563 was one of the first California statutes to use the term “digital divide.” By 2010, the term was in widespread use across California state policy. The CalEnviroScreen tool, the California Department of Technology’s broadband maps, and the California Public Utilities Commission’s annual reports all use the term in ways that trace back to the framework Polanco wrote in 2002.
4. They connected universal service to social equity in California law.
AB 3643 was explicit that the CPUC’s universal service review should consider the impact of the basic service definition on low-income and minority communities. SB 1563 made the same connection explicitly. The two laws together are the legislative foundation for the principle that universal service in California is not just about technical availability but about who actually gets the service.
The Legacy
California in 2026 has more households with broadband than at any point in history, but the digital divide has not closed. The 2024 CPUC annual broadband report found that approximately 1.2 million California households still lack a wireline broadband connection at the FCC’s 25/3 Mbps standard. The policy framework that AB 3643 and SB 1563 put in place — the principle that the CPUC must periodically reassess what “universal” means in light of technology and equity — is still the framework the state uses to address the divide.
For Polanco, the two bills are an unusual legislative achievement. Most legislators are associated with one or two major bills. Polanco is associated with three: the Polanco Act (1990), the California Voting Rights Act (2002), and, alongside those, the California Teleconnect Fund framework (1994, 2002). The first of the three laws gave cities a tool. The second gave voters a remedy. The third gave low-income and rural Californians a chance to participate in the digital economy. All three are still on the books.
Sources & Record
- Statute 1: California Public Utilities Code §§ 871.7, 883.
- Statute 2: California Public Utilities Code § 709.
- Bill text 1: AB 3643 (Polanco and Moore), Chapter 278, Statutes of 1994. Filed by the California State Archives. Enacted as the foundation for the California Teleconnect Fund.
- Bill text 2: SB 1563 (Polanco), Chapter 674, Statutes of 2002. Filed September 18, 2002. Enacted as the foundation for the California broadband deployment plan.
- CPUC decision 1: D.96-10-066 (October 25, 1996) — the Universal Service decision. Established the California Teleconnect Fund. Cites AB 3643 as the legislative mandate.
- CPUC decision 2: D.05-05-013 (2005) — the “Broadband Deployment in California” report, the first comprehensive California broadband report, produced under the authority of SB 1563.
- CPUC 2024 OIR: D.24-06-009 (June 20, 2024) — Order Instituting Rulemaking on changes to the Carrier of Last Resort framework. The order explicitly cites AB 3643 (Polanco, 1994) as the foundation for the universal-service review.
- Follow-up: SB 1712 (Polanco, 2000) — an intermediate bill requiring the CPUC to study whether the definition of universal service should include video and data services, building on the AB 3643 framework.
- Senate Floor Analysis 2000: SB 1712 (Polanco) analysis explicitly notes: “AB 3643 (Polanco), Chapter 278, Statutes of 1994, required CPUC to open a proceeding to examine the current and future definitions of universal service.” The “digital divide” language is used for the first time in a Polanco bill analysis.
- California Law Revision Commission: Memorandum 97-32 (1997) — “AB 3643 directed PUC to study the definition and provision of universal service to ensure the feasibility of competition in the local exchange markets.”
- Confidence rating: A (primary source verified — both bill texts, both chapter numbers, both statutory cites, both CPUC decisions, and the CPUC 2024 OIR citation all confirmed).