20050406Decision Memo.pdf

I;-AJR cE-
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:APRIL 1, 2005
RE:2004 ANNUAL REPORT AND RECOMMENDATIONS FOR THE IDAHO
TELEPHONE SERVICE ASSISTANCE PROGRAM
On March 22, 2005, the Idaho Telephone Service Assistance Program (ITSAP)
Administrator, Alyson Anderson, filed a revised ITSAP Annual report for the fiscal year ending
December 31 2004. Ms. .Anderson reported gross revenues from surcharges of$1 962 758 of
which $986 576 (50%) was assessed on wireline local exchange services and $976 182 (500/0)
was assessed on wireless services. Disbursements included credits to eligible subscribers, which
increased by 6% to $1 273,466, and phone company administration costs, which increased by
8% to $113 835. At year s end, approximately 30 724 recipients were receiving ITSAP support
an increase of nearly 10% from 2003. The ITSAP Administrator s fees and expenses were
557 for the year. The Fund's cash balance at the end of the year was $312 992.
The average number of residential local access lines reported to the Administrator for the
year decreased slightly (.05%) to approximately 482 000 and the average reported number of
business lines decreased slightly (1 %) to approximately 198 000. The average reported number
of wireless access lines increased by 150/0 from last year to approximately 642 000. The average
total number of lines increased overall by about 66 800 (50/0) to approximately 1 321 000.
Ms. Anderson estimates the 2005 funds from access lines will remain stable, with
contribution from wireless lines increasing and local access lines decreasing. She reports the
number of ITSAP recipients is estimated to increase by 6%, the telephone company
administrative costs to increase by approximately 5010, and the ITSAP Administrator fees and
expenses will increase by approximately 100/0. The current surcharge is $0.12 per line per
month.
DECISION MEMORANDUM - 1 -APRIL 1 , 2005
After reviewing the projected funding needs for 2005, Ms. Anderson believes that
maintaining the current surcharge would result in an unnecessarily high reserve balance. She
therefore, recommends a surcharge rate reduction to $.07 per month per local and wireless access
line. At this rate, the projected fund balance would be $464 287, an amount adequate to
reimburse companies, as well as provide a reasonable reserve balance.
STAFF RECOMMENDATION
Staff agrees with Ms. Anderson s assessment that a change to the ITSAP surcharge rate is
warranted and recommends the rate reduction to $0.07 per line per month.
COMMISSION DECISION
Does the Commission wish to reduce the Idaho Telephone Service Assistance Program
surcharge rate to $0.07 per line per month?
!h~
Grace Seaman
i:udmemos/ITSAP 2005
DECISION MEMORANDUM - 2-APRIL 1 , 2005