20140417final_order_no_33024.pdf

Office of the Secretary
Service Date
April 17,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE SURCHARGE FOR )
THE IDAHO TELECOMMUNICATIONS )CASE NO.GNR-T-14-03
SERVICE ASSISTANCE PROGRAM )
____________________________________
)ORDER NO.33024
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 “grant limited federal ‘lifeline’contributions to
low-income customers.”See Idaho Code §56-901(1).Idaho telephone companies provide
assistance in the form of a monthly discount of $2.50 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 decreased it to $0.07,where it remained for two years,and last year reduced it to
$0.03.Order No.32787.
In the annual report filed March 4,2014,the ITSAP Administrator reported a drop in
wireline access lines of 7%,an increase in wireless lines (9%),and a 25%decrease in the number of
ITSAP recipients.The gross revenue for the year was reported at $1,142,488 of which $299,781
(26%)was assessed on wireline services and $842,707 (74%)was assessed on wireless services.
The average number of wireline access lines per month reported to the Administrator
was 454,941 compared to 491,572 in 2012,and the average number of wireless access lines per
month was 1,395,896 compared to 1,276,830 in 2012.Overall,there was an increase of
approximately 82,435 in the total number of lines subject to the ITSAP surcharge (1,850,837 lines
compared to 1,768,402 in 2012).
The average number of reported ITSAP recipients per month in 2013 (17,626)decreased
by 25%from 2012 (23,434).Telecommunications companies received S66 1,876 in disbursements
ORDER NO.33024
for ITSAP credits paid to eligible recipients compared to $1,149,508 in 2012.Disbursements for
telephone company administrative costs were $57,818,a decrease of $93,578 from 2012.The
Administrator’s fees and expenses,including bank charges and fees,were $13,106 for the year.The
fund’s cash balance at the end of the year was reported at $953,172.
2014 Budget and Trends
The ITSAP Administrator projects the funding requirements for 2014 will be
approximately $743,410,anticipating the ITSAP recipient reimbursement to the companies for the
year to be approximately $662,760.Administration expenses are estimated to be $80,650,including
the Administrator’s costs ($12,850)and the telecommunications companies’administrative costs
($60,000).The surcharge revenue received from wireline and wireless telephone companies,at the
current rate of $0.03 per line,is projected to be $632,486.The Administrator estimated that the
number of access lines subject to the surcharge will be approximately I ,756,905 per month and the
average number of ITSAP recipients will be approximately 22,092 per month.Based on this data,
the Administrator projects the funding requirement for 2013 will be approximately $743,410.
The Administrator notes that it can be difficult to accurately predict the number of credit
recipients,as well as the number of access lines that will be assessed the surcharge.She
recommended a cautious approach to the 2014 funding determination citing:(1)the unknown
impact of the wireless companies that have not begun marketing the ITSAP Lifeline discounts in
Idaho;(2)the long-term impact of the ITSAP database reconciliation;and (3)the possibility that
some companies not requesting reimbursement of program administrative costs may do so in the
future.Given the uncertain nature of the ITSAP,the Administrator recommended the surcharge
rate remain at $.03 per local and wireless access line.At this rate,the program will maintain a
comfortable fund balance of approximately $800,000.
Staff reviewed the 2013 annual report,the proposed 2014 budget,and the 2014 funding
recommendation.When determining the appropriate fund for 2014,recent events must be
considered.First,the reduction of the ITSAP subscriber credit from $3.50 to $2.50 per month
became effective on July 1,2013.This reduction of almost one-third of the monthly credit
significantly reduced the disbursements to the participating companies.Second,as a requirement of
the Federal Communications Commission’s (FCC)Lifeline and Link Up Reform Order (FCC 12-
11),released on February 6,2012,the ITSAP program saw a drop in the number of recipients.This
reduction was a result of the annual ITSAP/Lifeline database recertification process.The ITSAP
ORDER NO.33024 2
will continue to be volatile in 2014 as some companies elect to withdraw from the ITSAP program
while other companies begin to participate.Finally,Staff noted it is difficult to predict the outcome
of the federal National Lifeline Accountability Database (NLAD)implemented last month in Idaho;
it may have a negative or positive impact on the enrollment of ITSAP/Lifeline recipients.
Based on the Administrator’s report and Staff’s review,the Commission finds that the
current surcharge rate of $0.03 per line per month should remain in place for the coming year.
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 will leave the surcharge at $0.03 to ensure an adequate reserve balance for the security
of the ITSAP program.The Commission 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 current ITSAP surcharge of $0.03 per access line
per month on all end-user business,residential and wireless access services will remain in place,
effective June 1,2014.
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.
ORDER NO.33024 3
1JiDONEbyOrderoftheIdahoPublicUtilitiesCommissionatBoise,Idaho this //
day of April 2014.
/%1YA /F.L /4PAULKJELLA11DER,(3RESIDENT
MACK A.REDFORD,COMMISSIONER
rL J&.
MARSHA H.SMITH,COMMISSIONER
ATTEST:
/1
Jean D.Jewel!.
Commission Secretary
O:GNR-T-14-O3ws
ORDER NO.33024 4