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HomeMy WebLinkAbout20240814Annual Report_Redacted.pdf RECEIVED ADMINISTRATOR'S REPORT Wednesday, August 14, 2024 IDAHO PUBLIC IDAHO UNIVERSAL SERVICE FUND UTILITIES COMMISSION YEAR ENDED -- JUNE 30, 2024 SURCHARGE REVENUES Surcharge revenues collected during the year ended June 30, 2024 totaled $1,174,9467 of which $559,847, or 48% was assessed on local exchange services and $615,098,or 52%.was assessed on MTS/WATS services. Current monthly surcharge rates are $.25 per residential line, $.44 per business line, and $.007 per MTS/WATS billed minute. DISBURSEMENTS COMPANIES RECEIVING DISBURSEMENTS Authorized disbursements to Local Exchange Companies during the year ended June 30, 2024 totaled $1,698,610 (page 11). The following table shows the Local Exchange companies authorized by the Idaho Public Utilities Commission to receive disbursements from the Idaho Universal Service Fund. Original IPUC Order Current Authorizing Authorized Annual Company Name Disbursement Disbursement ATC Communications 22718 & 22128 $ 4641502 Cambridge Telephone 22131 $ 138,162 Fremont Telecom 28085 & 28166 $ 577258 Inland Telephone Co 23838 $ 277604 Midvale Telephone 22377 $ 350,785 Direct Communication 22132 $ 2027401 Rockland Rural Telephone Co 22414 & 26598 $ 3027221 Silver Star Telecom 22237 & 22370 $ 155 677 Total $1 698 610 i ADMINISTRATIVE FEES AND EXPENSES Administrative fees and expenses for the year ended June 30, 2024 were $19,438. Administrative expenses include bank and broker charges of $361_ Administrative expenses payable at June 30, 2024 are $1,579. INVESTMENTS AND FUNDS CASH At June 30, 2024, the Idaho Universal Service Fund had a cash balance of $889,068. The following is a table showing the beginning, ending, and quarterly fund cash balances for the year ended June 30, 2024_ Beginning Ending Balance Balance Balance Balance Balance 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 $8897068 $7057248 $6037872 $4807275 $345,966 INTEREST No interest was earned on funds held in bank accounts for the year ended June 30, 2024. INVESTMENTS The Idaho Universal Service Fund had no investments during the year ended June 30, 2024. INVENTORIES Total residential and business lines at May 1, 2024 were 57,436 and 47,478 respectively (pages 38 and 40). This represents a decrease of 12% in residential lines and 30% in business lines from the prior year. Total MTS/WATS billed minutes of use for the year ended December 31, 2023 were 87,944,136 (page 43), a 91% increase from the prior year. 2 STATEWIDE WEIGHTED AVERAGE RATES A schedule summarizing the total funding eligibility for the authorized local exchange companies is shown on page 12_ ONE-PARTY, SINGLE LINE SERVICE The statewide weighted average rates for one-party single-line residential and business services are shown on pages 21 and 36. The following table shows the statewide weighted averages for one-party, single line service. IUSF THRESHOLD STATEWIDE 125% STATEWIDE WEIGHTED WEIGHTED AVERAGE RATE AVERAGE RATE RESIDENTIAL SERVICES $29.17 $3G.46 BUSINESS SERVICES $4G.90 $58.G2 TOLL SWITCHED ACCESS The statewide weighted average revenue per MTS/WATS access minute is shown on page 14. The statewide weighted average toll switched access revenue is $ .064 per minute. FUNDING OPTIONS OPTION 1: STATUS QUO If current surcharge rates ($.25 per residential line, $.44 per business line, and $.007 per intrastate MTS/WATS billed minute) are maintained and no additional IUSF funding is authorized, the fund will decrease by approximately $689,310 (page 44). The 2023-2024 IUSF authorized disbursements will continue at $1,698,610_ MTS/WATS services would contribute approximately 41% of the surcharge revenue and local exchange services would contribute 59% of the surcharge revenue, however the fund would become insolvent before June 30, 2025. OPTION 2: ADJUST SURCHARGE RATES &MAINTAIN FUDNING If surcharge rates are increased to $.57 per residential line, $.91 per business line, and $_01 per intrastate MTS/WATS billed minute and current funding levels are maintained,the fund will increase by 3 approximately $62,853 (page 44). MTS/WATS services would contribute approximately 49% of the surcharge revenue and local exchange services would contribute 51% of the surcharge revenue. The fund would have a balance of approximately $408,819 at June 30, 2025. OPTION 3: ADJUST SURCHARGE RATES &ADJUST FUNDING TO MEET STATEWIDE AVERAGES Idaho Universal Service Fund rule 106.02 indicates that to continue receiving IUSF funding after the first year of eligibility, the company may need to revise rates to meet or exceed the statewide threshold rates. If the rate is below the statewide threshold rate, and the difference between the rate is greater than 3% and $6,000, the company must revise rates equal or exceed 100% of the statewide average for MTS/WATS access service, and 125% of the statewide average for local exchange service. The following applies rule 106 to each company currently drawing from the IUSF. ♦ ATC Communications should increase local residential and business, as well as toll switched access rates. ATC Communications' annual IUSF draw would be reduced by $205,200. ♦ Cambridge Telephone Company should increase local residential and business rates. Cambridge Telephone Company annual IUSF draw would be reduced by $196,494, and thus eliminate Cambridge Telephone Company's IUSF annual draw of $138,162. ♦ Columbine Telephone /Silver Star Telecom should decrease toll switched access, and increase local residential and local business rates. Silver Star Telecom annual IUSF draw would be reduced by $138,002. ♦ Direct Communications Rockland should increase local residential and business rates. Direct Communications Rockland's annual IUSF draw would be reduced by $4 7,164. ♦ Fremont Telecom should increase toll switched access rates, and local residential and business rates. Fremont Telecom's annual IUSF draw would be decreased by $13 5,404, and thus eliminate the Fremont Telecom's annual IUSF draw of $5 7,2 58. ♦ Inland Telephone Company should increase local residential and business rates. Inland Telephone Company annual IUSF draw would be reduced by $21,475. ♦ Midvale Telephone Company should increase local residential and business rates. Midvale Telephone Company annual IUSF draw would be reduced by $75,997. ♦ Rural Telephone Company should increase local residential and business rates, as well as toll switched access. Rural Telephone Company annual IUSF draw would be reduced by $110,375. 4 The 2024--2025 IUSF authorized disbursements, including the adjustments to company funding per rule 106, will be $904,977. If surcharge rates are decreased to $.41 per business line and $.005 per intrastate MTS/WATS billed minute, and increased to $.26 per residential line the fund will decrease by approximately $81,764 (page 45). MTS/WATS services would contribute approximately 52% of the surcharge revenue and local exchange services would contribute 48% of the surcharge revenue. The fund would have a balance of approximately $264,201 at June 30, 2025. OPTION 4: ADJUST INVENTORIES, ADJUST SURCHARGE RATES & MAINTAIN FUNDING LEVELS In order to more accurately calculate future fund balances, the inventories have been adjusted according to the most recent five-year trend. Thus, the residential lines have been reduced 11%, the business lines reduced 30% and the MTS/WATS billed minutes have been increased 3%. If the surcharge rates are increased to $.6 5 per residential line, $1.0 5 per business line, and $.01 per intrastate MTS/WATS billed minute and IUSF disbursements are maintained at current levels, the fund will increase by approximately $89,340 (page 45). MTS/WATS services would contribute approximately 50% of the surcharge revenue and local exchange services would contribute 50% of the surcharge revenue. The fund would have a balance of approximately $435,305 at June 30, 2025. OPTION 5: ADJUST INVENTORIES, ADJUST SURCHARGE RATES &ADJUST FUNDING TO MEET STATEWIDE AVERAGES In order to more accurately calculate future fund balances, the inventories have been adjusted according to the most recent five-year trend. If the surcharge rates are increased to $.30 per residential line, $.47 per business line, and decreased to $.005 per intrastate MTS/WATS billed minute, and IUSF disbursements are adjusted to meet statewide averages per rule 106, the fund will decrease by approximately $67,688 (page 46). MTS/WATS services would contribute approximately 52% of the surcharge revenue and local exchange services would contribute 48% of the surcharge revenue. The fund would have a balance of approximately $278,277 at June 30, 2025. OPTION 6: ADJUST INVENTORIES, ADJUST SURCHARGE RATES & MAINTAIN FUNDING LEVELS In order to more accurately calculate future fund balances, the inventories have been adjusted according to the most recent five-year trend. Thus, the residential lines have been reduced 11%, the business lines reduced 30% and the MTS/WATS billed minutes have been increased 3%. If the surcharge rates are increased to $.5 7 per residential line, $.91 per business 5 line, and $.01 per intrastate MTS/WATS billed minute and IUSF disbursements are maintained at current levels, the fund will decrease by approximately $27,674 (page 46). MTS/WATS services would contribute approximately 53% of the surcharge revenue and local exchange services would contribute 47% of the surcharge revenue. The fund would have a balance of approximately $318,291 at June 30, 2025. ADMINISTRATOR'S RECOMMENDATION During the past year, there was a continued decrease in both local residential lines of 12% and in local business lines of 30%. MTS/WATS billed minutes increased significantly at 91%. This drastic increase emphasizes the difficulty estimating future inventory levels. As in the past, I believe that the local access lines and toll minutes will continue to decline due to the continued migration toward broadband,wireless, cellular and VOIP services, as well as the shift from stand-alone residential service to bundled packages. This affects the statewide average rate calculations, as well as the application of rule 106 to the companies funded by the IUSF. In light of FCC orders and continuing industry changes, it is becoming more difficult to evaluate the IUSF funding as it applies to Rule 106. It is equally challenging to estimate future inventory levels and the fund balance. The Commission recognized this in opening Case No. GNR-T--17--05, The 2017 Review of the Idaho Universal Service Fund. Until changes to the IUSF rules are made, I am obligated to apply the current Rules for Idaho Universal Service Fund, IDAPA 31.46.01. Due to the lag in reporting and remitting any surcharge change, it is optimal that the fund maintains at least a three-month disbursement balance. That balance is $4317978 for IUSF authorized disbursements at current levels and $233,569 if IUSF authorized disbursements are adjusted per rule 106. I recommend that the Commission adopt Option 3 or Option 5 adjusting the surcharge rates and, also, applying rule 106.02 to adjust funding to the companies. Both options also adjust the inventories for the five-year average and will provide an approximate three-month reserve balance going forward as the telecom industry continues to evolve. The fund balance at June 30, 2025 under Option 5 would approximate $278,277. The fund balance at June 30, 2025 under Option 3 would approximate $2641201. If the Commission is inclined to maintain company funding levels until changes are made to the underlying rules and statutes, I recommend the adoption of Option 6. This option increases the surcharge rates to $.5 7 per residential line, $.91 per business line, and $.01 per intrastate MTS/WATS 6 billed minute. Under Option 6, the fund balance would be adequate to meet the fund obligations, though with less of a reserve for industry changes going forward. The fund balance will approximate $318,291 at June 30, 2025. IDAHO UNIVERSAL SERVICE FUND BALANCE SHEET J U N E 30, 2024 ASSETS LIABILITIES & EQUITY CASH IN BANK $345,966 ACCOUNTS PAYABLE JUNE ADMINISTRATIVE EXPENSE $1,578 INVESTMENT IN US TREASURIES UNAMORTIZED PREMIUM/(DISCOUNT) ACCRUED INTEREST PURCHASED INTEREST RECEIVABLE FUND BALANCE AT YEAR END 344,387 TOTAL ASSETS $345,966 TOTAL LIABILITIES & EQUITY $345,966 Page 8 IDAHO UNIVERSAL SERVICE FUND STATEMENT OF FUND BALANCE JUNE 30, 2024 REVENUES SURCHARGE REVENUE $1 ,174,946 MISCELLANEOUS REVENUE 0 INTEREST REVENUE 0 TOTAL REVENUE 1 ,174,946 EXPENSES DISBURSEMENTS TO COMPANIES $1,698,610 BANK/BROKERAGE CHARGES 361 ADMINISTRATIVE EXPENSE** 19,054 TOTAL EXPENSES 1 ,718,025 CHANGE IN FUND BALANCE (543,079) FUND BALANCE JULY 1 , 2023 887,467 FUND BALANCE JUNE 30, 2024 344,387 **ADMINISTRATIVE EXPENSEADJUSTED FOR JUNE 2023 PAYABLE Page 9 IDAHO UNIVERSAL SERVICE FUND BANK ACCOUNT ACTIVITY FOR YEAR ENDED JUNE 30, 2024 BEGINNING BALANCE JULY 1, 2023 $889,068 RECEIPTS LOCAL SURCHARGE $559,847 TOLL SURCHARGE 615,098 TOTAL SURCHARGE COLLECTED $1,174,946 MISCELLANEOUS REVENUE 0 INTEREST 0 TOTAL RECEIPTS $1 ,174,946 DISBURSEMENTS BANK/BROKERAGE CHARGES $361 COMPANY DISBURSEMENTS 1,698,610 ADMINISTRATIVE EXPENSES 19,077 TOTAL DISBURSEMENTS $1 ,718,048 ENDING BALANCE JUNE 30, 2024 $345,966 Page 10 2023-2024 7/14/2024 AUTHORIZED DISBURSEMENTS ALBION CAMBRIDGE FREMONT INLAND MIDVALE DIRECT COMM RURAL SILVER STAR TELEPHONE TELEPHONE TELCOM TELEPHONE TELEPHONE ROCKLAND TELEPHONE TELECOM TOTAL July-23 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2,300.34 $ 29,232.08 $ 16,866.75 $ 25,185.08 $ 12,973.10 $ 141,550.86 August-23 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2,300.34 $ 29,232.08 $ 16,866.75 $ 25,185.08 $ 12,973.10 $ 141,550.86 September-23 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2,300.34 $ 29,232.08 $ 16,866.75 $ 25,185.08 $ 12,973.10 $ 141,550.86 October-23 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2.300.34 $ 29,232.08 $ 167866.75 $ 25,185.08 $ 12,973.10 $ 141,550.86 November-23 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2.300.34 $ 29,232.08 $ 16,866.75 $ 25,185.08 $ 12,973.10 $ 141,550.86 December-23 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2.300.34 $ 29,232.08 $ 16,866.75 $ 25,185.08 $ 12,973.10 $ 141,550.86 January-24 $ 38:708.50 $ 11,513.51 $ 4,771.50 $ 2,300.34 $ 29,232.08 $ 16,866.75 $ 25,185.08 $ 12,973.10 $ 141,550.86 February-24 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2,300.34 $ 29,232.08 $ 16,866.75 $ 25.185.08 $ 12.973.10 $ 141,550.86 March-24 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2,300.34 $ 29,232.08 $ 16,866.75 $ 25.185.08 $ 12.973.10 $ 141,550.86 April-24 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2.300.34 $ 29,232.08 $ 16,866.75 $ 25.185.08 $ 12,973.10 $ 141,550.86 May-24 $ 38.708.50 $ 11,513.51 $ 4,771.50 $ 2,300.34 $ 29,232.08 $ 16.866.75 $ 25,185.08 $ 12,973.10 $ 141,550.86 June-24 $ 38.708.50 $ 11,513.51 S 4,771.50 $ 2,300.34 $ 29,232.08 $ 16,866.75 $ 25.185.08 S 12,973.10 $ 141,550.86 TOTAL $ 464.502.00 $ 138,162.12 S 57,258.00 $ 27.604.08 $ 350,784.96 $ 202,401.00 $ 302,220.96 S 155,677.20 $ 1,698,610.32 Page 11 CONFIDENTIAL 7/14/2024 IDAHO UNIVERSAL SERVICE FUND 2024-25 ADDITIONAL FUNDING REQUIREMENTS ACCESS % RESIDENTIAL % BUSINESS & TOTAL ADD'L NEW ANNUAL FUNDING DIFF FUNDING DIFF FUNDING DIFF FUNDING FUNDING ^Rule 106.02 provides, to continue receiving IUSF funding, the difference between the rate & statewise threshold cannot exceed 3% and $6,000. " COMPANY DID NOT FILE 2024 ANNUAL REPORT TOTAL REPRESENTS COMPANY'S IUSF ANNUAL DISBUSREMENT Page 12 CONFIDENTIAL 7 14i24 2023-24 STATEWIDE ANNUAL ANNUAL REVENUE EQUIVALENT EQUIVALENT TOLL SWITCHED ACCESS ACCESS ACCESS PER ACCESS ACCESS MINUTES REVENUE MINUTE MINUTES REVENUE 44.595.554 S2.801.303 0.062816 1.698.251 $147.214 —COMPANY DID NOT FILE 2024 ANNUALREPORT Page 13 CONFIDENTIAL 7i14/24 RATIO OF TOTAL THRESHOLD & 2023-24 STATEWIDE TOTAL TOTAL AVERAGE TOTAL STATE REVENUE COMPANY TOLL SWITCHED ACCESS ACCCESS ACCESS REVENUE PER ACCESS AT 100% OF FUNDING % RATE MINUTES REVENUE MINUTE MINUTES STATE AVE REQUIRED DIFFERENCE TOTAL 46.293.805 52.948.517 0.063691 1.000000 $2,948.517 $0 `"COMPANY DID NOT FILE 2024 ANNUALREPORT STATEWIDE AVERAGE RATE FOR MTSIWATS ACCESS 0.063691 Page 14 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE RESIDENTIAL REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 15 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE RESIDENTIAL REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 16 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE RESIDENTIAL REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 17 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE RESIDENTIAL REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 18 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE RESIDENTIAL REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 19 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE RESIDENTIAL REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 20 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE RESIDENTIAL REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE TOTAL 56,890 $19,912,919.35 $24,720.512.03 ($4,807,592.68 STATEWIDE WEIGHTED AVERAGE RATE $29.17 125% STATEWIDE WEIGHTED AVERAGE RATE $36.46 *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 21 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 22 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE "COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 23 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 24 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 25 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE "COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 26 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE "COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 27 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE "COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 28 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE —COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 29 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE "COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 30 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE "COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 31 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 32 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE "COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 33 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 34 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE "COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 35 CONFIDENTIAL 7/14/2024 2023-24 STATEWIDE AVERAGE LOCAL ACCESS RATE BUSINESS REVENUE AT FUNDING PERCENTAGE May 1, 2024 ANNUAL 125% TOTAL PER RATE LINES RATE REVENUE AVERAGE COMPANY DIFFERENCE TOTAL 33,927 $19,093.912.80 $23,794.227.78 ($4.700.314.98 STATEWIDE WEIGHTED AVERAGE RATE $46.90 125% STATEWIDE WEIGHTED AVERAGE RATE $58.62 *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 36 CONFIDENTIAL 7/14/2024 2024 ACCESS LINES CUSTOMER CENTRON, RESIDENTIAL SINGLE PARTY MULTI PARTY SEMI-PUBLIC OWNED PAY CENTREX & PBX TOTAL SERVICE SERVICE PAY SERVICE TELEPHONES C.O. SYSTEMS SYSTEMS OTHER RESIDENTIAL -COMPANY DID NOT FILE 2024 ANNUAL REPORT 37 CONFIDENTIAL 7/14/2024 2024 ACCESS LINES CUSTOMER CENTRON, RESIDENTIAL SINGLE PARTY MULTI PARTY SEMI-PUBLIC OWNED PAY CENTREX & PBX TOTAL SERVICE SERVICE PAY SERVICE TELEPHONES C.O. SYSTEMS SYSTEMS OTHER RESIDENTIAL TOTAL 57.427 9 0 0 0 0 0 57.436 -COMPANY DID NOT FILE 2024 ANNUAL REPORT 38 CONFIDENTIAL 7/14/2024 2024 ACCESS LINES CUSTOMER CENTROM, BUSINESS SINGLE PARTY MULTI PARTY SEMI-PUBLIC OWNED PAY CENTREX & PBX TOTAL SERVICE SERVICE PAY SERVICE TELEPHONES C.O. SYSTEMS SYSTEMS OTHER BUSINESS -COMPANY DID NOT FILE 2024 ANNUAL REPORT 39 CONFIDENTIAL 7/14/2024 2024 ACCESS LINES CUSTOMER CENTRON, BUSINESS SINGLE PARTY MULTI PARTY SEMI-PUBLIC OWNED PAY CENTREX & PBX TOTAL SERVICE SERVICE PAY SERVICE TELEPHONES C.O. SYSTEMS SYSTEMS OTHER BUSINESS TOTAL 41.269 3.822 39 35 1.064 1,249 0 47,478 -COMPANY DID NOT FILE 2024 ANNUAL REPORT 40 7/14/2024 2023 MTS/WATS BILLED MINUTES CONFIDENTIAL TOTAL % OF TOTAL REVENUE MTS WATS MTS/WATS TOTAL MTS WATS MTS/WATS PER MINUTES MINUTES OTHER MINUTES STATE REVENUES REVENUES OTHER REVENUES MINUTE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 41 7/14/2024 2023 MTS/WATS BILLED MINUTES CONFIDENTIAL TOTAL % OF TOTAL REVENUE MTS WATS MTS/WATS TOTAL MTS WATS MTS/WATS PER MINUTES MINUTES OTHER MINUTES STATE REVENUES REVENUES OTHER REVENUES MINUTE *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 42 7/14/2024 2023 MTS/WATS BILLED MINUTES CONFIDENTIAL TOTAL % OF TOTAL REVENUE MTS WATS MTS/WATS TOTAL MTS WATS MTS/WATS PER MINUTES MINUTES OTHER MINUTES STATE REVENUES REVENUES OTHER REVENUES MINUTE TOTAL REPORTED 87,944,136 $ 6,581,187.06 *COMPANY DID NOT SUBMIT 2024 ANNUAL REPORT Page 43 IDAHO UNIVERSAL SERVICE FUND OPTIONS 7/14/2024 OPTION 1 - STATUS QUO FUND RATE CHANGE BANK BALANCE 7/1/24 $ 345,966 ANNUAL INVENTORY RESIDENTIAL LINES 57.436 0.25 $172,308 n% OF TOTAL SURCHARGE REVENUE BUSINESS LINES 47.478 0.44 $250,684 24% OF TOTAL SURCHARGE REVENUE TOLL MINUTES 8779447136 0.007 $615,609 59% OF TOTAL SURCHARGE REVENUE TOTAL IUSF SURCHARGE REVENUE $1,038,601 ESTIMATED INTEREST INCOME 0 ESTIMATED IUSF DISBURSEMENTS (1,698,610) ESTIMATED ADMINISTRATIVE EXPENSES (29,300) TOTAL ESTIMATED EXPENSES (1,727,910) PROJECTED INCOME/(DRAWDOWN) (689,310) PROJECTED BALANCE 6/30/25 ($343,344) OPTION 2 - ADJUST SURCHARGE RATES & MAINTAIN FUNDING FUND RATE CHANGE BANK BALANCE 7/1/24 $ 345,966 ANNUAL INVENTORY RESIDENTIAL LINES 57,436 0.57 $392,862 22% OF TOTAL SURCHARGE REVENUE BUSINESS LINES 47,478 0.91 518,460 29% OF TOTAL SURCHARGE REVENUE TOLL MINUTES 87,944,136 0.010 879,441 49% OF TOTAL SURCHARGE REVENUE TOTAL IUSF SURCHARGE REVENUE 1,7907763 ESTIMATED INTEREST INCOME 0 ESTIMATED IUSF DISBURSEMENTS (1,698,610) ESTIMATED ADMINISTRATIVE EXPENSES (29,300) TOTAL ESTIMATED EXPENSES (1,727,910) PROJECTED INCOME/(DRAWDOWN) 62.853 PROJECTED BALANCE 6/30/25 $408.819 Page 44 IDAHO UNIVERSAL SERVICE FUND OPTIONS 7/14/2024 OPTION 3 - ADJUST SURCHARGE RATES & ADJUST FUNDING TO MEET STATEWIDE THRESHOLDS FUND RATE CHANGE BANK BALANCE 7/1/24 $ 345.966 ANNUAL INVENTORY RESIDENTIAL LINES 57.436 0.26 $179.200 21% OF TOTAL SURCHARGE REVENUE BUSINESS LINES 47.478 0.41 233,592 27% OF TOTAL SURCHARGE REVENUE TOLL MINUTES 87,944,136 0.005 439.721 52% OF TOTAL SURCHARGE REVENUE TOTAL IUSF SURCHARGE REVENUE 852,513 ESTIMATED INTEREST INCOME 0 ESTIMATED IUSF DISBURSEMENTS (904,977) ESTIMATED ADMINISTRATIVE EXPENSES 29,300) TOTAL ESTIMATED EXPENSES (934,277) PROJECTED INCOME/(DRAWDOWN) (81,764) PROJECTED BALANCE 6/30/25 $264,201 OPTION 4 - ADJUST INVENTORIES FOR 5 YEAR AVERAGE, ADJUST SURCHARGE RATES & MAINTAIN FUNDING FUND RATE CHANGE BANK BALANCE 7/1/24 $ 345,966 ANNUAL INVENTORY RESIDENTIAL LINES 50,990 0.65 $397,722 22% OF TOTAL SURCHARGE REVENUE BUSINESS LINES 40,514 1.05 510,476 28% OF TOTAL SURCHARGE REVENUE TOLL MINUTES 907905,158 0.010 909,052 50% OF TOTAL SURCHARGE REVENUE TOTAL IUSF SURCHARGE REVENUE 1,817,250 ESTIMATED INTEREST INCOME 0 ESTIMATED IUSF DISBURSEMENTS (1,698,610) ESTIMATED ADMINISTRATIVE EXPENSES (29.300) TOTAL ESTIMATED EXPENSES (1,727,910) PROJECTED INCOME/(DRAWDOWN) 89,340 PROJECTED BALANCE 6/30/25 $435,305 Page 45 IDAHO UNIVERSAL SERVICE FUND OPTIONS 7/14/2024 OPTION 5 - ADJUST INVENTORIES FOR 5 YEAR AVERAGE, ADJUST SURCHARGE RATES & FUNDING TO MEET STATEWIDE THRESHOLDS FUND RATE CHANGE BANK BALANCE 7/1/24 $ 345,966 ANNUAL INVENTORY RESIDENTIAL LINES 50,990 0.30 $183.564 21% OF TOTAL SURCHARGE REVENUE BUSINESS LINES 40,514 0.47 228,499 26% OF TOTAL SURCHARGE REVENUE TOLL MINUTES 907905,158 0.005 454.526 52% OF TOTAL SURCHARGE REVENUE TOTAL IUSF SURCHARGE REVENUE 866.589 ESTIMATED INTEREST INCOME 0 ESTIMATED IUSF DISBURSEMENTS (904,977) ESTIMATED ADMINISTRATIVE EXPENSES 29.300 TOTAL ESTIMATED EXPENSES (934.277) PROJECTED INCOME/(DRAWDOWN) (67,688) PROJECTED BALANCE 6/30/25 $278,277 OPTION 6 - ADJUST INVENTORIES FOR 5 YEAR AVERAGE, ADJUST SURCHARGE RATES & MAINTAIN FUNDING FUND RATE CHANGE BANK BALANCE 7/1/24 $ 345.966 ANNUAL INVENTORY RESIDENTIAL LINES 50,990 0.57 $348,772 21% OF TOTAL SURCHARGE REVENUE BUSINESS LINES 40,514 0.91 442,413 26% OF TOTAL SURCHARGE REVENUE TOLL MINUTES 90,905,158 0.010 909,052 53% OF TOTAL SURCHARGE REVENUE TOTAL IUSF SURCHARGE REVENUE 1,700,236 ESTIMATED INTEREST INCOME 0 ESTIMATED IUSF DISBURSEMENTS (1,698,610) ESTIMATED ADMINISTRATIVE EXPENSES 297300) TOTAL ESTIMATED EXPENSES (1,727,910) PROJECTED INCOME/(DRAWDOWN) (27,674) PROJECTED BALANCE 6/30/25 $318,291 Page 46