California’s controversial bill to allow third-party, online courses to count for credit at the three public systems of higher education has met an ignoble end.  Or has it? On July 31, we learned that Senate Bill 520 (SB 520), authored by Senate President Pro Tempore Darrell Steinberg, is being moved to the two-year file, and will remain dormant for at least a year.
Is this a telling defeat for powerful state politicians who went too far in trying to advance online education options, or did the process of introducing the bill and debating it in public actually create the same goals and opportunities that drove the bill in the first place?
We believe that despite the tremendous and dramatic opposition and perceived defeat of SB 520, quite a lot has been accomplished as a direct result of the initial bill language. Despite spectacular headlines, the bill itself is not dead, but rather has simply been moved to the two-year file where it will be revived as needed.
How Did We Get Here?
As described in a position paper  written by Phil Hill and Michael Feldstein for the 20 Million Minds Foundation, when the California Master Plan was adopted in 1960, the basic premise was to guarantee students a place within one of the three public systems based on their high school record. It was assumed that by having a place in a public institution, the student would have access to needed courses. As the state budget has crumbled, unemployment rates have skyrocketed and enrollment demand has surged without the resources to accommodate it, this assumption is no longer valid. Across the state, literally hundreds of thousands of students have been turned away from needed courses at the California Community Colleges (CCC), the California State University (CSU), and the University of California (UC).
In January of 2013, in an effort to address the growing public education access problem facing California, the 20 Million Minds Foundation brought together students, faculty, administrators, state leaders, and ed-tech pioneers for a one-day symposium. The "Re:Boot California Higher Education" conference promoted a robust discussion that examined not only the challenges, but also the potential technological solutions to the major issues facing California’s three segments of higher education. During his opening address to the Re:Boot participants, Senator Steinberg indicated: 
[Online education] is a […] revolution and possibilities abound using technology in ways that not only equal or enhance quality but also reduce the cost of higher education for struggling students and their families.
In March of this year, during an online press conference, Senator Steinberg unveiled Senate Bill 520,  announcing the legislation that would “would reshape higher education, in partnership with technology we already use, to break bottlenecks that prevent students from completing education.”
The newfound involvement of state government officials in this level of higher education, and the nature of the bill itself, which proposed the heretofore unheard-of use of controversial, potentially disruptive, large-scale solutions such as MOOCs for credit, generated significant resistance from faculty groups and the systems themselves. In particular, a New York Times article  "broke the news" that a powerful senate leader was going to challenge the status quo without getting agreement from faculty groups first, and this publicity helped rally vocal opposition to the bill. Of course, this level of resistance should not have surprised anyone involved in higher education in California.
The nature of government is that real legislative movement most often occurs for two reasons – bad press or a crisis. Senator Steinberg sees course access as a crisis for public higher education, and he introduced a bill designed to wake up the higher education community. The bill essentially sent the message that "we need to solve these problems of access whether our colleges and universities do it themselves or whether we need outside help." This challenge to go beyond the ordinary thoughts and discussions in public policy pushed the boundaries and made many groups quite uncomfortable.
In parallel, Governor Jerry Brown added fuel to the fire by proposing additional funding to the CCC, CSU, and UC with the caveat that certain conditions be tied to the funding. The language in the proposed budget obligated the funds "to increase the number of courses available to matriculated undergraduates through the use of technology, specifically those courses that have the highest demand, fill quickly, and are prerequisites for many different degrees.” This language was interpreted as telling the systems how to do their job. After CSU and UC indicated they would follow the same guidelines, but execute the solution their own way, Governor Brown used a line-item veto to remove his own proposed earmarks creating conditions for the additional funding.
The result of the intense opposition and debate during the legislative process led to significant amendments to SB 520. Originally envisioned as the gateway to public-private partnerships with a common pool of courses, the bill has been transformed into a grant program for each system to implement individually. Even with the passage of the amended bill in the Senate, the bill is currently on hold.
Movement From Systems
All three systems have proposed new programs that broadly meet the same goals outlined by SB 520, largely based on the additional funding for online initiatives, with the new emphasis being the introduction or expansion of online courses with cross-enrollment across each system.
The California Community Colleges currently enroll as much as 17 percent of their students in various types of online or distance education. The system is poised to continue to advance and expand its online programs with a strong focus on career technical education as well as workforce development programs as outlined in the CCC System Strategic Plan,  updated in June of this year.
In July, the CSU introduced a new Intrasystem Concurrent Enrollment  program, allowing students at each campus to sign up for one of 30 online courses offered in the program from other "host" campuses. Under the current plan, students will be limited to one course per semester.
In January, UC introduced the Innovative Learning Technology Initiative,  updated in May, as "a direct response to the governor’s plan to earmark $10 million from UC’s FY 14 core budget to use technology to increase access to high-demand courses for UC matriculated students.”
Despite the welcome news of these programs, we are already hearing widespread concerns over the pace and scale of implementation. Lieut. Governor Gavin Newsom, a noted supporter of more effective use of technology, following the online program presentation at the July meeting of the UC Regents, stated, "I don’t think we’re running at full speed here. We’re moving extraordinarily slowly…. Californians are looking to us" for progress in online education.
What to Expect Next
Students enrolled in California public colleges and universities should be guaranteed timely access to the core courses that they are required to take in order to graduate. Given that there are a variety of ways in which the institutions could meet this obligation, the state should avoid being overly prescriptive about the method. Rather, it should supply the mandate for educational access, support institutions in meeting this mandate, and provide a safety valve to ensure the mandate’s right is preserved.
--From our position paper
The focus should remain on finding effective solutions to the course-access issue -- providing students with high-quality courses they need while reducing costs. Before this year, this was not happening for a variety of reasons, and it remains to be seen just how much the institutions will do without the pressure of earmarked funding in the state budget or pending legislation such as SB 520.
We believe the best outcomes for online education occur when faculty and institutions are motivated and supported to design high-quality options for students. Ideally, colleges and universities would craft solutions, but use third-party courses as safety valves to ensure students have access to necessary classes. The hope is that the three public systems will continue their progress, find real solutions to the course access problem, and not fall into the trap of doing the same old thing again, just with online options.
At this point, one might actually suggest that a welcome policy outcome has indeed been accomplished as a direct result of the initial language in SB 520. The bill is certainly not dead. The bill itself could now be thought of as a safety valve, providing an option in case the three systems fail to show real progress in meeting the challenge of course access. We are, however, cautiously optimistic that viable and effective change is, at least for now, in the formative stages.
Phil Hill is a consultant and industry analyst covering the educational technology market primarily for higher education. He is co-publisher of the e-Literate  blog and co-founder of MindWires Consulting.  Follow him on Twitter at @PhilOnEdTech. 
Dean Florez is the former Senate majority leader of the California State Senate and the current president and CEO of the 20 Million Minds Foundation  (@20MillionMinds). Follow him on Twitter at @DeanFlorez.