20070312_1862.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
CO MMISSI 0 NER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:MARCH 9, 2007
RE:2006 TELECOMMUNICATIONS RELAY SERVICE ANNUAL REPORT.
On February 15 , 2006, Idaho s Telecommunications Relay Service (TRS) Administrator
Mr. Robert Dunbar, submitted the 2006 TRS Annual Report to the Commission. He reported the
relay service conversation time, including interstate long distance, totaled 263 327 minutes. This
represents a 27% decrease from calendar year 2005. Likewise, disbursements to Hamilton
Telecommunications of $265 580 for in-state relay calls were approximately 27% less than 2005.
Idaho s TRS fund reimburses Hamilton Telecommunications for processing in-state relay calls
while the National Exchange Carrier Association (NECA) reimburses Hamilton for out-of-state
relay service.
In 2006, the TRS relay system was enhanced when the Commission approved the
introduction of Captioned Telephone (CapTeITM) service as an optional feature of the Idaho TRS.
By year-end, 73 CapTelTM units were in place and accounted for approximately 41 000 minutes
of relay conversation, a monthly average of approximately 1 00 minutes per phone. CapTeITM
devices allow users to hear as well as read the conversation on the phone s built-in screen. A
trained operator "re-voices" everything they hear from a caller into the voice-recognition
technology that converts the words into a text message and provides the TRS user with a more
natural conversation.
2006 TRS REVENUE AND EXPENSES
The TRS fund is supported by assessments on local access lines and on billed intrastate
MTS/W ATS minutes. The total number of intrastate toll minutes reported to the Administrator
DECISION MEMORANDUM - 1 -MARCH 9, 2007
2006 TRS REVENUE AND EXPENSES
The TRS fund is supported by assessments on local access lines and on billed intrastate
MTS/W A TS minutes. The total number of intrastate toll minutes reported to the Administrator
during calendar year 2006 was approximately 328 769 840, and the total number of lines
reported was approximately 652 120. The 2006 annual contribution to the TRS fund totaled
$425,155, a decrease of $94 191 from 2005. The end-of-year fund balance was $473,402. In
addition to the decrease in fund disbursements, the TRS administrative costs also decreased in
2006. The 2006 disbursements and contributions are were as follows:
Fund Disbursements
Hamilton Telecommunications
Program Administrative Expenses & Fees
Total
2006
$265 580
45,389
$310 969
2005
$366 120
61.463
$427 583
TRS Revenue Contributions 2006 2005
Local access service providers $267 535 (63%)$319 006 (61%)
MTS/W A TS providers 157 620 (37%)200 340 (39%)
Interest earned on funds 189 142
Total $425 344 $519,488
2007 TRS BUDGET AND TRENDS
Mr. Dunbar estimated the 2007 annual operating expenses would be approximately
$263 080. This budget includes a forecasted 17 percent decrease in traditional relay usage
reflecting continued user migration to Internet, video relay, and wireless instant messaging
services. The line count and long distance billed minutes are expected to remain stable in 2007.
During the 2006 National Association for State Relay Administration (NASRA)
conference, Jay Keithly, FCC Deputy Bureau Chief of Policy addressed the conference. He
conveyed his belief that the FCC will require the state commissions to assume payment for
intrastate Internet services. These include the intrastate portion of the Internet Relay (IR) and
Video Relay (VRS) services currently reimbursed by NECA. Based on the latest NECA figures
the Idaho intrastate IR service for 2006 was estimated to be $268 560 and the intrastate VRS was
DECISION MEMORANDUM - 2 -MARCH 9, 2007
approximately $677 610 for a combined annual total of$946 170. This figure does not reflect
any growth and would nearly quadruple the estimated 2007 budget requirement for the Idaho
TRS.
Following the discussion with Mr. Keithly, an advisory NASRA resolution was
unanimously passed recommending that payment for Internet-based services continue at the
federal (NECA) level. Mr. Dunbar recommends vigorous opposition to the funding transfer of
these programs to Idaho. NASRA does not believe this change will occur in 2007, but feels the
situation merits close monitoring in 2008. Should funding changes occur, it would necessitate an
immediate increase in the TRS assessments. Mr. Dunbar noted that the assessments along with
the current fund reserve would support intrastate IR and VRS service for approximately six
months.
ADMINSTRATOR'S 2007 FUNDING RECOMMENDATION
Mr. Dunbar acknowledged that the uncertainty of the intrastate Internet services funding
should be a concern for Idaho , but based on the healthy TRS fund reserve, he recommended a
35% reduction in funding for 2007. The Administrator, therefore, suggested a per line reduction
from the current $.03 to $.02 and an adjustment to the intrastate per minute rate from $.0003 to
0002. At these assessment rates, Mr. Dunbar felt the funding would be adequate to meet the
proj ected needs in 2007.
STAFF'S RECOMMENDATION
Based on the proposed TRS budget and trends for 2007, Staff agrees with the
Administrator s recommendation to reduce the TRS assessment rates. Staff also agrees with the
Administrator that the fund reserve allows the Commission adequate time to react to federally
imposed changes that may occur regarding funding for intrastate Internet services. Staff
therefore, recommends that the Commission approve the Administrator s proposal to reduce the
access line and MTS/W ATS assessment rates.
DECISION MEMORANDUM - 3 -MARCH 9 , 2007
COMMISSION DECISION
1. Does the Commission wish to reduce the TRS contribution from levels authorized by
Order No. 29997 and adopt the Administrator s recommendation to reduce the access line rate to
02 and the MTS/W ATS assessment to $.0002?
2. Does the Commission wish to change the distribution or the methodology in some
other way?
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race Seaman
i:udmemos/trs report for 2006
DECISION MEMORANDUM - 4-MARCH 9, 2007