20220215ITSAP Administrator Report 2021.pdf

ADMINISTRATOR’S REPORT
IDAHO TELECOMMUNICATIONS SERVICE
ASSISTANCE PROGRAM
YEAR ENDED – DECEMBER 31, 2021
SURCHARGE REVENUES
The Idaho Telecommunications Service Assistance Program (ITSAP) surcharge is
assessed on all residential, business, and wireless end users not receiving the ITSAP
credit. Most companies actually remit net surcharge revenue, which is gross surcharge
revenue less any assistance credits provided to eligible customers and the company’s
administrative costs. The ITSAP surcharge rate remained suspended during 2021, and
no gross or net surcharge revenue was collected or deposited during the year ended
December 31, 2021.
DISBURSEMENTS
ASSISTANCE CREDITS/COMPANY ADMINISTRATIVE EXPENSES
Telecommunications companies reported $284,000 in credits provided to eligible
subscribers, and reported $34,998 in costs for administration of the program for the year
ended December 31, 2021. That comes to approximately 9466 credit recipients per
month/113,600 per year. Throughout the year, ITSAP reimbursed companies for net
monthly discounts provided to eligible subscribers and costs of administering the
program, so checks were written in the amount of $318,998.
ADMINISTRATIVE FEES AND EXPENSES
Administrative fees and expenses paid during the year ended December 31, 2021 were
$10,289.00. These expenses include fees and expenses paid to the current and past
Administrators, Alyson Anderson and Kathleen Toohill, in addition to bank fees of
$111.75 for the year. Those bank fees were negotiated down to $0 in spring 2021.
RECEIVED
2022 FEB 15 AM 8:00
IDAHO PUBLIC
UTILITIES COMMISSION
INVESTMENTS AND FUNDS
CASH
As of December 31, 2020, the Idaho Telecommunications Service Assistance Program
had a cash balance of $1,109,035.45 and then one year later closed with checks
clearing at $839,112.87. The following is a table showing the quarterly cash balances
for the year of 2021:
CASH BALANCE
12/31/20
CASH BALANCE
3/31/21
CASH BALANCE
6/30/21
CASH BALANCE
9/30/21
CASH BALANCE
12/31/21
$ 1,109,035.45 $ 1,096,319.78 $ 963,744.76 $ 947,067.24 $ 839,112.87
INTEREST
No interest was earned on funds during the year ended December 31, 2021.
ADMINISTRATOR’S RECOMMENDATION
Currently, the surcharge rate is suspended, or $0.00 per access line and the assistance
credit amount is $2.50 per customer per month. Some companies report on a monthly
basis while some other companies report on a quarterly basis. During 2021, the number
of credit recipients was almost 8 times the previous reported year due to the company
providing free government benefit phone service.
In 2012, the Idaho Department of Health and Welfare introduced legislation amending
Idaho Code §56-902. This legislation reduced the amount of the monthly ITSAP
assistance credit from $3.50 to $2.50. The impact of this legislation combined with the
2012 fund balance indicated a need to reduce the surcharge rate, however there was a
cautious approach to reducing the surcharge rate for the following reasons: 1) The
unknown impact of wireless ETCs that had not begun marketing the ITSAP and Lifeline
discounts in Idaho; 2) The long-term impact of the ITSAP database reconciliation; and
3) The possibility that some companies not currently requesting reimbursement of
program administrative costs may do so in the future. For the most part, these events
did not occur, making it unlikely that the current fund balance will be reduced. The
current fund balance indicates continued suspension of the ITSAP surcharge is
necessary.
During 2021, the fund balance declined $269,922.58. One company received the
majority of payments due to all of their customers qualifying as credit recipients; this
company provides free government benefit phone service plus the related company
fund administration costs. By the 4th Quarter, those payments started to level off. The
surcharge can continue to remain suspended for the next year, but I continue to
recommend that companies report access lines. Average lines per month reported by
telecommunications companies were residential at 83,62; business at 80,357; and
wireless 210,270; so predicted lines potentially could decrease by about 10% to
residential at 75,262; business at 72,321 and wireless of 189,243. The fund balance
remaining should prove sufficient for another year of the projected credit recipients,
company administrative costs, a 4-year audit, and fund administration with about
$223,000 estimated for the 2022 budget. December 2022 could realize an estimated
ending balance of $616,113.00 with approximately 6,861 credit recipients estimated per
month and the related fund administration costs.
Credit
recipients
Assistance
credit
Program
Admin
Check
Totals
Fund
Admin.
Q1 2021 $28,017.00 $61,621.00 $8,320.00 $69,941.00 $3,317.00
Q2 2021 $46,650.00 $116,715.00 $13,132.00 $129,847.00 $2,262.00
Q3 2021 $4,807.00 $12,016.00 $2,236.00 $14,253.00 $2,424.00
Q4 2021 $37,744.00 $94,348.00 $11,310.00 $105,668.00 $2,286.00
2021 Total $117,218.00 $284,700.00 $34,998.00 $319,709.00 $10,289.00