20130412final_order_no_32787.pdf

Office of the Secretary
Service Date
April 12,2013
BEFORE TUE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE SURCHARGE FOR )
THE IDAHO TELECOMMUNICATIONS )CASE NO.GNR-T-13-03
SERVICE ASSISTANCE PROGRAM )
____________________________________
)ORDER NO.32787
Each year the Administrator of the Idaho Telecommunications Service Assistance
Program (ITSAP)files a report detailing the activities and status of the program during the previous
year.ITSAP provides eligible recipients with a reduction in the cost of residential basic local
exchange telephone service.Funds for the program are raised through a surcharge on all end-user
business,residential and wireless access service lines.The Commission determines the uniform
statewide monthly surcharge and the Idaho Department of Health and Welfare administers the
program in conjunction with federal programs to maximize federal “lifeline”and “link up”
contributions to Idaho’s low-income customers.See Idaho Code §56-901(1).Idaho telephone
companies provide assistance in the form of a monthly discount of $3.50 to eligible subscribers.
Idaho Code §56-902.To be eligible for the ITSAP program,an applicant must be the head of a
household and meet narrowly targeted eligibility criteria established by the Department of Health
and Welfare.Idaho Code §56-903.The ITSAP surcharge has been as high as $.12 per access line
per month,but the Commission was able to decrease it to $0.07,where it remained for two years.
Order No.32526.
In the annual report filed March 9,2013,the ITSAP Administrator reported a drop in
wireline access lines of 4%,an increase in wireless lines (13%),and a 7%decrease in the number of
ITSAP recipients.The gross revenue for the year was reported at $1,456,062 of which $450,371
(31%)was assessed on wireline services and $1,005,691 (69%)was assessed on wireless services.
The average number of wireline access lines per month reported to the Administrator
was 491,572 compared to 512,672 in 2011,and the average number of wireless access lines per
month was 1,276,830 compared to 1,132,324 in 2011.Overall,there was an increase of
approximately 123,406 in the total number of lines subject to the ITSAP surcharge (1,768,402 lines
compared to 1,644,996 in 2011).
The average number of reported ITSAP recipients per month in 2012 (23,434)decreased
by 7%from 2011(25,310).Telecommunications companies received $1,149,508 in disbursements
ORDER NO.32787 1
for ITSAP credits paid to eligible recipients compared to $1,103,137 in 2011.Disbursements for
telephone company administrative costs were $93,578.a slight increase from 2011 ($90,416).
The Administrator’s fees and expenses,including bank charges and fees for a 2011
audit,were $17,097 for the year.The fund’s cash balance at the end of the year was reported at
$543,467.
2013 Budget and Trends
The ITSAP Administrator projects the funding requirements for 2013 will be
approximately $633,390,anticipating the ITSAP recipient reimbursement to the companies for 2013
to be approximately $543,690.Administration expenses are estimated to be $89,700,including the
Administrator’s costs ($9,700)and the telecommunications companies’administrative costs
($80,000).The surcharge revenue received from wireline and wireless telephone companies,at the
current rate of $0.07 per line,is projected to be $1,451,276.
To establish the 2013 budget,the Administrator estimates that the number of access lines
subject to the surcharge will be approximately 1327,710 per month and the average number of
ITSAP recipients will be approximately 18,123 per month.The number of ITSAP recipients
dropped sharply in the second half of 2012 due to database reconciliation by the companies
receiving ITSAP support.In addition,new state legislation reduces the ITSAP subscriber credit
from $3.50 to $2.50 per month effective July 1,2013.Based on this data,the Administrator
projects the funding requirement for 2013 will be reduced to approximately $633,390.
The Administrator states that the impact of the recent legislation combined with the 2012
fund surplus justifies a reduction in the ITSAP surcharge rate,and recommended that the surcharge
rate be decreased from $0.07 to $0.03 with an effective date of June 1,2013.Staff reviewed the
2012 annual report,the proposed 2013 budget,and the 2013 funding recommendation,and supports
the Administrator’s recommendation to decrease the surcharge rate from $0.07 to $0.03 per access
line,effective June 1,2013.
The Commission finds that the current surcharge rate of $0.07 per line per month can be
reduced to $0.03 for the coming year.We noted last year that program changes implemented by the
FCC make it more difficult to estimate the number of customers eligible for ITSAP support,as well
as the number of potential carriers eligible to participate in the program.Because it is important
that the program be adequately funded,the Commission left the surcharge at $0.07 to ensure an
adequate reserve balance for the security of the ITSAP program,but anticipated the surcharge could
ORDER NO.32787 2
be adjusted this year if the reserve balance had grown too large.The Commission now finds an
ITSAP surcharge of $0.03 per access line per month to be just,fair and reasonable.At this rate,the
program will maintain a comfortable fund balance for any unexpected occurrences.
ORDER
IT IS HEREBY ORDERED that the ITSAP surcharge is reduced to $0.03 per access
line per month on all end-user business,residential and wireless access services,effective June 1,
2013.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)days
after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this //
day of April 2013.
MACK A.REDFORD,COMMISSIONER
L 7i2-
ARSHA H.SMITH,COMMISSIONER
ATTEST:
Jn D.Jewell (1
Commission Secretary
O:GNR-T-I 3O3ws
ORDER NO.32787 3