20090323_2513.pdf

DECISION MEMORANDUM
TO:COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:MARCH 20, 2009
RE:2008 TELECOMMUNICATIONS RELAY SERVICE ANNUAL REPORT;
CASE NO. GNR-09-
BACKGROUND
Title IV of the Americans with Disabilities Act requires all states to provide a
Telecommunications Relay Service (TRS or "relay ) program that allows citizens who are hearing or
speech-impaired to engage in telephone communications "in a manner functionally equivalent to that of
individuals without hearing or speech impairments." This requirement is codified in Idaho Code 9 61-
1301. Under the Idaho TRS Act, all telephone corporations providing local or long-distance service (not
including cellular or VoIP) pay into the TRS Fund to defray the costs of providing TRS services. Idaho
Code 9 61-1305. Pursuant to TRS Rule 202, the Commission sets the TRS funding levels each year
based upon the Administrator s Annual Report. IDAP A 31.46.02.202.
THE 2008 ANNUAL REPORT
On January 29 2009, the TRS Administrator, Mr. Robert Dunbar, submitted the 2008 TRS
Annual Report and the 2009 TRS Budget for Commission approval. Mr. Dunbar reported the 2008 relay
service conversation time, including interstate long distance, totaled 137 253 minutes. This represents a
28% decrease from calendar year 2007. Likewise, disbursements of $231 918 to the TRS service
provider, Hamilton Telecommunications, for in-state relay calls were approximately 7.5% less than 2007.
Idaho s TRS fund reimburses Hamilton Telecommunications for processing in-state traditional relay and
DECISION MEMORANDUM MARCH 20, 2009
captioned telephone (CapTel)J calls, while the National Exchange Carrier Association (NECA)
reimburses Hamilton for the processing of out-of-state relay as well as intrastate Internet relay (IR) and
Internet video relay service (VRS) calls.
Mr. Dunbar reported that traditional relay usage decreased in 2008 while the CapTel usage
increased by 42%. CapTel calls comprise 47% of the total TRS billed minutes. The increase in the more
expensive CapTel billed minutes largely offset the 28% decrease in total relay use.
2008 TRS REVENUE AND EXPENSES
The TRS fund is supported by assessments on local telephone service (residential and business
access lines) and billed intrastate long distance (MTS/W A TS or "toll") minutes. In 2008, the total
number of intrastate toll minutes reported by the telephone companies was approximately 325 781 100
and the average number of local telephone lines reported per month was 585 958. The 2008 annual
contribution to the TRS fund totaled $209 367, a decrease of$79 806 (27.6%) from 2007. Local access
lines contributed $140 630 (67%) and MTS/W A TS services contributed $68 737 (33%) to the TRS
revenue. In Order No. 30531 , issued on April 16, 2008, the line rate remained unchanged from the
precious year at $0.02 and the intrastate per minute toll rate remained unchanged at $0.0002. The TRS
administrative fees and expenses for 2008 were $42 099, and the end-of-year balance ofthe TRS fund
was $405 115. The comparison of the 2008 disbursements and contributions from the previous year are
as follows:
TRS Fund Disbursements
Local access service providers
MTS/W A TS providers
Interest earned on funds
Total
2008 2007
$231 979 $250 755
42.099 42.157
$274 078 $292 912
2008 2007
$140 630 $199 922
737 251
$209 406 $289 236
Hamilton Telecommunications
Program Administrative Expenses & Fees
Total
TRS Revenue Contributions
I CapTel allows hard-of-hearing users to hear the conversation as well as read the words on the phone s built-
screen. A trained operator "re-voices" the conversation from a caller into the voice-recognition technology that
converts the words into a text message and provides the CapTel user with a more natural conversation.
DECISION MEMORANDUM MARCH 20, 2009
2009 TRS BUDGET AND TRENDS
Mr. Dunbar developed the 2009 budget, by assessing the reduced relay usage trend , the reduced
revenue associated with decreased number of lines and toll minutes reported by the telephone companies
as well as the possibility of a change in the intrastate Internet service funding (IR and VRS). Mr. Dunbar
estimates the 2009 annual operating expenses to be $272 195. This budget is essentially the same as the
2008 budget. The estimated 2% decrease in payments to Hamilton in 2009 is offset by the 2009 payment
for an audit conducted during the fourth quarter of2008. The Administrator forecasts a flattening out of
the combined traditional and CapTel usage. In addition, Mr. Dunbar anticipates a 10% decrease in
revenues in 2009 from both the number of lines and billed toll minutes as seen in calendar year 2008.
Mr. Dunbar also reported that Idaho s portion of the intrastate Internet relay funding that is
currently paid through NECA, totaled $1 302 634 for IR and VRS usage from July 2007 through June
2008. This amount is five times more than the current payments to the TRS service provider for
traditional and CapTel relay service.
ADMINISTRATOR'S 2009 FUNDING RECOMMENDATION
Mr. Dunbar reported that during 2009, the current TRS contribution rate should result in a
reduction of the reserve by approximately $75 000. He, therefore, recommends the rates remain
unchanged in 2009. This will preserve a small cushion in the TRS fund should the FCC make any policy
changes to the intrastate Internet relay funding (IR and VRS).
ST AFF'S RECOMMENDATION
Staff has reviewed the TRS annual report and agrees with the Administrator s recommendation to
maintain the current TRS assessment rates. Staff also agrees with the Administrator that the fund reserve
allows the Commission adequate time to react to any federally mandated changes that may potentially
occur regarding intrastate IR and VRS funding. Staff recommends that the Commission approve both the
Administrator s proposal to maintain the current access line and MTS/W A TS assessment rates and the
Administrator s 2009 budget.
DECISION MEMORANDUM MARCH 20, 2009
COMMISSION DECISION
1. Does the Commission wish to accept the Administrator s recommendation to maintain the
current TRS contribution levels adopted in Order No. 30531?
2. Does the Commission wish to accept the annual report and adopt the Administrator s budget
for 2009?
;f;6-Cz
Grace Seaman
i:udrnernos/trs report for 2008
DECISION MEMORANDUM MARCH 20, 2009