28328.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF REVIEWING THE ADMINISTRATIVES 1999 ANNUAL REPORT AND ESTABLISHING THE FUNDING LEVELS TO SUPPORT THE TELECOMMUNICATIONS RELAY SERVICES (TRS) PROGRAM.
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CASE NO. GNRT0011

ORDER NO. 28328

On February 14, 2000, the Telecommunications Relay Services (TRS) Administrator filed his 1999 annual report with the Commission. “The TRS program 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.” Idaho Code § 61-1301. The Federal Communications Commission (FCC) has certified the Idaho TRS program until July 25, 2002. Pursuant to TRS Rules 202 and 205, the Commission reviews the Administrator’s annual report and determines the appropriate funding levels necessary to meet the fund’s expenses on a prospective basis. IDAPA 31.46.02.202 and .205. In this Order we accept the Administrator’s report and continue TRS funding at existing levels.
THE 1999 ANNUAL REPORT
1. Operations. The Administrator reported that the total amount of 1999 relay minutes was 497,587. This represents a 1% decrease in the number of conversation minutes from calendar year 1998. The relay center, operated by Hamilton Telecommunications, converts or “relays” oral conversations to text type, and vice versa. The Administrator attributed the decrease in total relay minutes to the probable increase in Internet and e-mail communications and a slight increase in local calling.
2. Expenses. TRS expenses for 1999 totaled about $465,700. The Administrator reported that disbursements to Hamilton Telecommunications for the calendar year 1999 were approximately $434,400. This represents an increase of 2.4% compared to the preceding year. Administrative fees and expenses for the reporting year were approximately $31,300, a slight decrease from the previous year.
3. 1999 Revenues and Allocations. During 1999, the number of access lines supporting TRS grew by approximately 2.7% to a total of approximately 683,690 lines. The number of intrastate toll minutes in Idaho decreased by approximately 1% from the prior year to about 285 million minutes. The Administrator attributed the decrease in statewide toll minutes to the continued implementation of toll-free, extended area service (EAS) around the state in 1999 although the decline has “leveled out” over prior years. The toll minutes reported to the TRS Administrator mirror the data reported to the Idaho Universal Service Fund (USF) Administrator, which uses a similar collection methodology for USF support. The table below shows 1999 TRS contribution sources and levels.
1999 Revenues
From Basic Service Providers ($0.04/mo.) $328,267 (62%)
From MTS WATS Providers ($0.0007/min.) $199,873 (38%)
Interest Earned on Funds $ 1,665
Total $529,805

The 1999 ending balance of the TRS fund was $163,798. The balance as of January 19, 2000, was $126,336.
4. 2000 Budget. The Administrator projected an annual operating budget for 2000 of $531,567. His projection was based upon an assumption that TRS usage will remain at its present level. He also expected that his fees and expenses will remain comparable to 1999 levels. He and Staff projected a growth in local access lines of 4% for an average total of 707,000 for 2000. He also projected no significant change in toll minutes, or an average total of 285 million minutes.
The Administrator also noted in his report that Idaho’s contract with Hamilton Telecommunications expires at the end of the year 2000. Due to the smaller number of relay providers and less competition, the Administrator estimated that Idaho’s bid process this year will likely result in considerably higher per minute relay rates than at present. He also noted the FCC had recently amended its TRS Rules to include new relay requirements such as speech-to-speech, Spanish speaking, and other relay service quality standards. The Administrator suggested that these new FCC requirements are also likely to increase Idaho’s per-minute relay rate. Idaho currently pays Hamilton $1.085 per TRS conversation minute.

5. Proposed Funding Levels. Based upon the proposed budget for 2000, the Administrator recommended that TRS contributions from local service (currently $0.04 per month) remain the same. The Administrator estimated that this would result in an end-of-year balance in the TRS fund of $133,269 or, approximately a three-month operating reserve.
Following its review of the Administrator’s annual report, the Staff concurred in the estimated TRS budget for 2000. Staff also recommended that both the local monthly and the MTS/WATS funding levels be continued. The Staff observed that its funding recommendation would meet the 2000 budgeted expenses, maintain the three-month TRS fund reserve, and continue the current ratio between MTS/WATS contributions and local access contributions. Although Staff acknowledged that the per-minute rate paid to Hamilton will probably increase in calendar year 2001, Staff believed that changing the current TRS funding levels would be premature.
DISCUSSION
In this Order, we formally adopt the Administrator’s 1999 annual report. Following our review of the report, we find that the 1999 expenses are reasonable. Idaho citizens continue to be well served by the Administrator and the relay services provided by Hamilton Telecommunications.
The Commission further finds that the 2000 budget projection of $531,567 is reasonable based upon the anticipated expenses of the TRS program. The Commission believes that the 2000 budget is reasonable given the slight decrease in TRS conversation minutes experienced in 1999. We also believe that the FCC’s new TRS requirements will ultimately increase costs.
Based upon our review of the Administrator’s report and the Staff’s recommendations, we find that it is just and reasonable to continue the TRS contributions at the current funding levels: $0.04 per access line per month and $0.0007 per minute on intrastate MTS/WATS calls. We find a 3-month operating reserve is reasonable given the impending FCC changes. In addition, several carriers only remit their TRS contributions quarterly. Maintaining current contribution levels produces an estimated 2000 end-of-year balance of approximately three months reserve. We further find that continuing the TRS contribution levels provides administrative efficiencies to local and toll carriers by avoiding changes to the TRS reimbursement levels.

The Commission also finds that the projected 2000 allocation between local service and toll service (63% local and 37% toll) is fair, just and reasonable. Given the assumption for changes in access line growth and the reduction in toll minutes, we accept the contribution allocation. The table below portrays the TRS operating budget for 2000.

Est. 707,000 lines ($.04)(12 mos.) $339,000 (63%)
Est. 285 million toll minutes ($.0007) $199,500 (37%)
Total $538,500

Proposed budget for 2000 ($531,567)
Net $ 6,933

Current TRS Fund balance $126,336
Projected balance at end of 2000 $133,269

O R D E R
IT IS HEREBY ORDERED that the TRS funding obligation of telephone corporations providing local service in Idaho be continued without change at the existing level of $0.04 per month per access line.
IT IS FURTHER ORDERED that the TRS funding obligation of telephone corporations providing intrastate MTS/WATS service be continued at its existing level of $0.0007 per intrastate billed minute.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. GNRT0011 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this Case No. GNR-T-00-11. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code  61626.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of March 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

vld/O:GNR-T-00-11.dh

ORDER NO. 28328 -1-

Office of the Secretary
Service Date
March 30, 2000