20191011Decision Memo.pdf

DBCISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: OCTOBER I l, 2019
IIE:IDAHO TELECOMMUNICATIONS RELAY SERVICE (TRS)
CONTRACT EXTENSION WITH HAMILTON
TELECOMMUNICATIONS; CASE NO. GNR-T-19-07.
BACKGROUND
The TRS Administrator, pursuant to the TRS Act, contracts with a provider of relay
services as approved by the Commission. See Idaho Code $ 6l-1303. The Administrator
entered into an Agreement with Hamilton Telephone Company dba Hamilton
Telecommunications (Hamilton) and the Agreement was approved by consent on June 20,2016.
The Agreement rvas for an initial term of three years beginning December 1.2016 and ending
November 30.2019. The Agreement also automatically renewed for three additional one-year
terms unless either party has given vnritten notice of its desire to tenrinate the Agreement at least
six months prior to the termination of either the initial three-year ternt or any renewal term
thereafter. Renerval of the Agreement could be at different prices. terns and conditions than the
initial three-year term.
On June 25,2019, Staff received a report and recommendation from the TRS
Administrator. Mr. Dunbar, regarding the Agreement with Hamilton. On August 29,2019,
Hamilton submitted a letter of intent to Mr. Dunbar, notifying him of Hamilton's wish to extend
the Agreement entered into on July 22,2016.
In this letter, Hamilton asks that the Administrator exercise the renewal option for the
time period of December 1,2A19 through November 30,2022 as allowed in the current
Agreement.
DECISION MEMORANDUM I ocToBER 11,2019
The current rates for relay service provided by Hamilton are $2.75 per conversation
minute (actual conversation time) for traditional service and$.2.22 per conversation minute for
CapTel. Through negotiations, Mr. Dunbar and Hamilton arrived at what the Administrator
considers acceptable rate increases.
The letter of intent specifies that, for the three one-year renewal periods, Hamilton will
provide traditional relay service at the rate of $2.00 per session minute (conversation time plus
set up and wrap up time) and CapTel service at the rate of $2.00 per session minute. The one
major change to the contract is to break out outreach services to a flat monthly rate of $5,000 a
month. With declining minutes oluse, this is a common trend. About half of Hamilton's States
have the outreach piece as a separate charge now. All other terms and conditions would remain
the same as set forth in the Agreement.
ADMINISTRATOR'S RECOMMENDATION
Mr. Dunbar reports that the TRS Agreement with Hamilton is currently in the last year of
the three-year contract. If the Commission approves, Hamilton requests that the TRS Agreement
be extended for the next three years with the service rates mentioned above.
Mr. Dunbar asserts that Hamilton maintains a high standard of service to the Idaho TRS
users. and the new rates are also in line with the current competitive rates seen in recent bidding
results ol'other western states. Mr. Dunbar, therefbre. believes the ncgotiated rates are fair and
reasonable and recommends that the Comrnission approve thc proposed extension of the contract
frorrr December l. 2019 through November 30, 2022.
STAFF RECOMMENDATION
During the rate negotiation process. Mr. Dunbar kept Staff apprised of the situation.
Staff believes that through compromise, the Administrator and Hamilton reached a fair and
reasonable outcome. Staff agrees with Mr. Dunbar in his assessment of the quality of service
that has been provided by Hamilton to the Idaho TRS users.
Mr. Dunbar reported that existing cash reserves will be more than adequate to
accommodate Hamilton's proposed rate increases. Consequently, no changes to the current user
assessments will be necessary. See Order No. 34285. The current assessment rates are $0.02 per
line and $0.0002 per intrastate long distance (MTS/WATS) minute.
DECISION MEMORANDUM -2-ocToBER ll,20l9
Alternatives to the Administrator's recommendation would necessitate the initiation of a
Request for Proposal (RFP). The RFP option can be pursued, but may not produce a quality
result for Idaho with the limited time available before the contract expiration date of November
30,2019.
Considering the quality of service provided by Hamilton and the Company's good faith
effort during the negotiation process with the Administrator, Staff believes the best option for the
Idaho TRS users is to maintain Hamilton as the service provider. Staff, therefore, recommends
Commission acceptance of Mr. Dunbar's recommendation.
COMMISSION DECISION
Does the Commission accept the TRS Administrator's recommendation to extend the
Agreement with Hamilton for three one-year terms at the revised rates of $2.00 per session
minute for traditional relay service, $2.00 per session mirrute for CapTel service and $5,000 a
month for outreach services?
Daniel Klein
I Idrnenrosl(.iNR-T- l 9-07 ]lanrilton contract exle nsion de c nremo
-3-DECISION MEMORANDUM ocToBER 11,2019