20040412_801.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
CO MMISSI 0 N STAFF
LEGAL
WORKING FILE
FROM:DOUG COOLEY
DATE:APRIL 7, 2004
RE:TELECOMMUNICATIONS RELAY SERVICE 2003 ANNUAL REPORT
On February 13 2004, Idaho s Telecommunications Relay Service (TRS) Administrator
Mr. Robert Dunbar, submitted his calendar year 2003 Annual Report to the Commission.
reported that conversation time on the relay service, including interstate long distance, totaled
473 531 minutes. This represents a 9% decrease from calendar year 2002. Likewise, disbursements
to Hamilton Telecommunications in 2003 ($492 933) were approximately 9% less than 2002
($554 296). In-state relay traffic is reimbursed by Idaho s TRS Fund while the National Exchange
Carrier Association (NECA) reimburses Hamilton for out-of-state calls that are placed via the relay
servIce.
Hamilton Telecommunications
Administrative Expenses
Total
2003
$492 933
36.031
$492 969
2002
$554 296
34.445
$588 741
Disbursements
CONTRIBUTIONS TO THE TRS FUND - 2003
The total number of intrastate toll minutes that were reported to the TRS Administrator
during calendar year 2003 was approximately 314 658 630 and the number of lines reported to the
Administrator was approximately 640 000. However, because of various reporting cycles and
subsequent true-ups by many reporting companies, Staff believes the actual minutes and line counts
are different from those derived by funds reported during the 2003 calendar year. Staff estimates
A Administrative expenses included $30 000 in Administrator s compensation and $6 031 in other expenses.
DECISION MEMORANDUM APRIL 7, 2004
that the number of intrastate toll minutes during 2003 was closer to 300 000 000 (down 8%) and the
actual number oflandlines in Idaho is just over 700 000 (down 5%). This estimate does not include
pagers or wireless phones.
Contributions
From basic service providers
From MTS/W A TS providers
Interest earned on funds
Total
2003
$307 059
220 041
176
$527 100
(58%)
(42%)
2002
$346 237
182 546
450
$529 233
(65%)
(35%)
The above transactions resulted in a decrease of$1 688 to the TRS fund bringing the 2003
year-end balance to $188 011. This amount approximates a four-month reserve for the fund that
collects from many accounts on a quarterly basis.
Staff commends Mr. Dunbar for his continued effective administration of this service. Idaho
Relay Service can now be reached by simply dialing 711 from any phone in Idaho and also provides
Spanish relay service.
SETTING TRS CONTRIBUTION RATES FOR 2003
Mr. Dunbar has projected an annual operating expense requirement for 2004 of$478 050
which includes a forecasted 10% decrease in traditional relay use. He notes that decreasing line
counts or toll minutes could impact TRS Fund revenues. Mr. Dunbar also points out the possibility
that the Federal Communications Commission could at some time require states to pay for other
relay-related services such as internet relay, video relay, and caption relay service via CapTeFM
(discussed below).
To meet the estimated budget requirement, Mr. Dunbar recommends that the TRS
contribution rate not be adjusted at this time. Staff agrees with this recommendation and presents
the following projected TRS income for the coming year.
No Change in TRS Contribution
Estimated lines 700 000 x $.04 x 12 months =
Estimated minutes 300 000 000 x $.0007
Total
$336 000
$206.500
$542 500
(64%)
(36%)
The estimated revenues above assume essentially no change in intrastate toll minutes or
exchange lines. With some reserve currently in the fund, Staff agrees with Mr. Dunbar s suggestion
DECISION MEMORANDUM APRIL 7, 2004
to continue monitoring the fund during the year and make adjustments if a demonstrated need arises
rather than making adjustments now and potentially over funding the account.
Recently, Mr. Dunbar received a proposal from Hamilton Telecommunications to provide
CapTeFM service in addition to the traditional relay service it currently provides. CapTeFM was
developed by Ultratec, Inc. and allows individuals with hearing impairment to view word-for-word
captions ofthe other party's speech on the CapTeFM telephone s built-in screen. The CapTel
telephone set looks much like our NBC handsets. CapTelTM telephones cost approximately $495
each and Hamilton proposes to provide CapTeFM service at $1.45 per conversation minute.
Hamilton currently provides traditional relay service at $1.31 per conversation minute.
Staff and Mr. Dunbar have reviewed Hamilton s proposal and have some concerns about the
cost, amount of usage, licensing, and provision ofthis impressive but relatively new service.
Therefore, Staff and the Administrator recommend that the Commission decline implementing
CapTeFM service for this budget cycle and, perhaps, reconsider this when the Idaho relay releases its
Requests for Proposals (RFP) in 2005.
STAFF RECOMMENDATION
Based on the proposed TRS budget for 2003, Staff and the Administrator recommend that
2003 TRS contributions remain at $.04 per line per month and $.0007 per intrastate toll minute in
accordance with Order No. 28684.
COMMISSION DECISION
1. Does the Commission wish to keep the TRS contribution rates at the current level as
established by Order No. 28684?
2. Does the Commission wish to change the distribution or the methodology in some other
way?
3. Does the Commission wish to forego CapTelTM service for the 2004 budget?
~~y
DC:udmemos/2003 TRS Report
DECISION MEMORANDUM APRIL 7 2004