20150423final_order_no_33284.pdf

Office of the Secretary
Service Date
April 23,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE SURCHARGE FOR )
THE IDAHO TELECOMMUNICATIONS )CASE NO.GNR-T-15-03
SERVICE ASSISTANCE PROGRAM )
_______________________________
)ORDER NO.33284
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 applicants.Idaho Code §56-902.To be eligible to receive reimbursement for
providing low-income benefits (ITSAP and the federal Lifeline assistance),a company must be
designated as an eligible telecommunications carrier (ETC)by a state commission.47 C.F.R.§
54.20 l(a)(l).ITSAP benefit applicants 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.
2014 ITSAP Annual Report
In the annual report filed March 4,2015,the ITSAP Administrator reported a drop in
wireline access lines of 6%,a decrease in wireless lines of 5%,and a 25%decrease in the number of
ITSAP recipients.The gross revenue for the year was reported at $631,922 of which $176,307
(28%)was assessed on wireline services and $455,614 (72%)was assessed on wireless services.
The Administrator explains that ETCs remit net surcharge revenue,which is gross surcharge
revenue less any assistance credits provided to eligible recipients and the ETC’s administrative
costs.Net surcharge revenue collected and deposited in 2014 totaled approximately $486,467.
The average number of wireline access lines per month reported to the Administrator
was 427,065,compared to 454,941 in 2013,and the average number of wireless access lines per
month was 1,329,112,compared to 1,395,896 in 2013.Overall,the Administrator noted a decrease
ORDER NO.33284 1
of approximately 94,660 in the total number of average monthly lines subject to the ITSAP
surcharge (1,756,177 lines per month in 2014;compared to 1,850,837 in 2013).
The average number of reported ITSAP recipients per month in 2014 (10,674)decreased
by 25%from 2013 (17,626).Telecommunications companies received $365,725 in disbursements
for ITSAP credits paid to eligible recipients compared to $661,876 in 2013.Disbursements to cover
company administrative costs were $51,979 in 2014,a decrease of $57,818 from 2013.
The Administrator’s fees and expenses totaled $9,585 for 2014.The Administrator
reported a fund cash balance at the end of 2014 of $1,064,271.
2015 Budget and Trends
The ITSAP Administrator projects a continuing decrease in the funding requirements for
2015.The Administrator estimates that ITSAP recipient reimbursements to qualifying companies
for 2015 will be approximately $219,810,and expenses are projected to be $63,412 for costs
associated with the administration of the program—this includes the Administrator’s costs
($13,150),the telephone companies’administrative costs ($41,262),and the cost for a triennial
audit ($9,000).
In establishing the 2015 budget,the Administrator estimated that the number of access
lines subject to the ITSAP surcharge will be approximately 1,745,472 per month and the average
number of ITSAP recipients will be approximately 10,028 per month.Based on this data,the
Administrator projects a funding requirement for 2015 of approximately $283,222.
The Administrator states that there was another significant drop in credit recipients
during 2014.If the current surcharge rate and monthly assistance credit are maintained at their
current level the estimated ITSAP fund balance at the end of the year would be approximately
$1,409,400.
According to the Administrator,the impact of the 2012 Legislation that reduced the
monthly ITSAP subsidy from $3.50 to $2.50,combined with the 2014 fund balance,indicate that
another reduction in the ITSAP surcharge rate is necessary.The Administrator noted that in the
past there has been a cautious approach toward reducing the surcharge rate for the following
reasons:(1)the unknown impact of the wireless ETCs 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.Nevertheless,the Administrator recommended the Commission reduce the
ORDER NO.33284 2
current surcharge rate to $0.01 per wireline and wireless access line.The Administrator believes
that this rate will provide an adequate fund balance to reimburse companies for assistance credits
provided and maintain an adequate reserve balance.The estimated balance for the end-of-year 2015
is projected to be approximately $990,500.
Staff reviewed the 2014 annual report,the proposed 2015 budget,and the 2015 funding
recommendation.Staff believes the 2015 budget is reasonable and supports the Administrator’s
recommendation to decrease the surcharge rate from $0.03 to $0.01 per access line.This reduction
should reduce the current fund surplus while also maintaining an adequate fund balance.Thus,
Staff recommended the Commission approve the Administrator’s rate proposal and the 2015
budget.
COMMISSION FINDINGS
The Commission has reviewed the Administrator’s 2014 annual report,proposed budget
and Staff’s review.The Commission finds that the Administrator’s recommendations are fair,just
and reasonable and approves a reduction in the current ITSAP surcharge rate of $0.03 per line per
month to $0.01 per line per month,effective June 1,2015.The Commission finds that a reduction
in the surcharge rate is warranted given the continuing decline in credit recipients and ITSAP
funding requirements.A reduction in the monthly surcharge rate will benefit consumers,provide
adequate funding for the 1TSAP program moving forward,and ensure an adequate reserve balance
for the future security of the ITSAP program.
ORDER
IT IS HEREBY ORDERED that the Administrator’s 2014 annual report and 2015
budget are accepted by the Commission.
IT IS FURTHER ORDERED that the current ITSAP surcharge of $0.03 per access line
per month on all end-user business,residential wireline and wireless access services shall be
decreased to $0.01 per access line per month,effective June 1,2015.
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.33284 3
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 3
day of April 2015.
PAUL K LLANI){,PRESIDENT
MACK A.REDFORD,COMMISSIONER
ltL
KR INE RAPER,CMMISSIONER
ATTEST:
4hn D.JeweJ
commission Secretary
O:GNR-T-I 5-O3np
ORDER NO.33284 4