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HomeMy WebLinkAbout20050405_1145.pdfDECISION MEMORANDUM TO:COMMISSIONER KJELLANDER COMMISSIONER SMITH COMMISSIONER HANSEN COMMISSION SECRETARY LEGAL WORKING FILE FROM:GRACE SEAMAN DATE:APRIL 1, 2005 RE:2004 ANNUAL REPORT AND RECOMMENDATIONS FOR THE IDAHO TELEPHONE SERVICE ASSISTANCE PROGRAM On March 22 2005, the Idaho Telephone Service Assistance Program (ITSAP) Administrator, Alyson Anderson, filed a revised ITSAP Annual report for the fiscal year ending December 31 2004. Ms. Anderson reported gross revenues from surcharges of$1 962 758 of which $986 576 (50%) was assessed on wire line local exchange services and $976 182 (50%) was assessed on wireless services. Disbursements included credits to eligible subscribers, which increased by 6% to $1 273 466, and phone company administration costs, which increased by 8% to $113 835. At year s end, approximately 30 724 recipients were receiving ITSAP support an increase of nearly 10% from 2003. The ITSAP Administrator s fees and expenses were 557 for the year. The Fund's cash balance at the end of the year was $312 992. The average number of residential local access lines reported to the Administrator for the year decreased slightly (.05%) to approximately 482 000 and the average reported number of business lines decreased slightly (1 %) to approximately 198 000. The average reported number of wireless access lines increased by 15% from last year to approximately 642 000. The average total number of lines increased overall by about 66 800 (5%) to approximately 1 321 000. Ms. Anderson estimates the 2005 funds from access lines will remain stable, with contribution from wireless lines increasing and local access lines decreasing. She reports the number of ITSAP recipients is estimated to increase by 60/0, the telephone company administrative costs to increase by approximately 5%, and the ITSAP Administrator fees and expenses will increase by approximately 10%. The current surcharge is $0.12 per line per month. DECISION MEMORANDUM - 1 -APRIL 1 , 2005 After reviewing the proj ected funding needs for 2005, Ms. Anderson believes that maintaining the current surcharge would result in an unnecessarily high reserve balance. She therefore, recommends a surcharge rate reduction to $.07 per month per local and wireless access line. At this rate, the projected fund balance would be $464 287, an amount adequate to reimburse companies, as well as provide a reasonable reserve balance. ST AFF RECOMMENDATION Staff agrees with Ms. Anderson s assessment that a change to the ITSAP surcharge rate is warranted and recommends the rate reduction to $0.07 per line per month. COMMISSION DECISION Does the Commission wish to reduce the Idaho Telephone Service Assistance Program surcharge rate to $0.07 per line per month? ffi~ ~dN1 Grace Seaman i:udmemos/ITSAP 2005 DECISION MEMORANDUM - 2 -APRIL 1 2005