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Home My WebLink About2017 annual report section 5.pdfPage 46 Idaho Public Utilities Commission TELECOMMUNICATIONS Albion Telephone Corp. Albion Cambridge Telephone Co. Cambridge CenturyLink* Boise CenturyTel of Idaho, Inc.* Salt Lake City, UT CenturyTel of the Gem State* Salt Lake City, UT Citizens Telecommunications Company of Idaho* Beaverton, OR Columbine, dba Silver Star Communications Freedom, WY Frontier Communications Northwest, Inc.* Beaverton, OR Direct Communications Rockland, Inc. Rockland Inland Telephone Co. Roslyn, WA Fremont Telecom, Inc. Missoula, MT Midvale Telephone Company Midvale Oregon-Idaho Utilities, Inc. Nampa Pine Telephone System, Inc. Halfway, OR Potlach Telephone Company Kendrick Rural Telephone Company Glenns Ferry Regulated telecommunications companies * These companies are no longer rate regulated; however, they are still regulated for customer service. Page 47 Idaho Public Utilities Commission TELECOMMUNICATIONS CASES ITSAP surcharge suspended for 2017 budget year In May, the Commission suspended a surcharge assessed on all telephone lines. The surcharge had been 1 cents per month per line, with the revenue earmarked for the Idaho Telecommunications Service Assis- tance Program, which provides qualified low-income landline and cell phone users with a discount of $2.50 per month. While the number of telephone lines supporting the fund decreased in 2016, the number of recipients of the subsidy declined more sharply. That prompted the Commission to suspend the charge for the 2017 budget year. The surcharge has declined significantly in the last two dec- ades, from 13 cents per month in 1998, to 7 cents in 2013, and 3 cents in 2014. In addition to ITSAP, a federal program, Lifeline, provides $9.25 per month to help qualifying low-income citizens ac- cess phone and broadband service. A number of factors played into the Commission’s decision to suspend the surcharge, including:  The number of ITSAP recipients dropped 42 percent from 2015 to 2016, and more than 85 percent since 2011 (from 25,310 to 3,880).  The number of “land lines” declined 17 percent, to an average of 363,888 per month, from 2015 to 2016, and the number of wireless lines dropped 2 percent, to 1,384,720.  The gross surcharge revenue for 2016 was reported at $235,421, of which 18 percent was as- sessed on wireline services and 82 percent was assessed on wireless services.  Administrative costs for the program reported by eligible telecommunications carriers decreased from $33,089 in 2015 to $23,235 in 2016.  The ITSAP fund cash balance at the end of 2016 was $1,354,852. Surcharge on land lines increases, Universal Service Fund scrutinized Faced with declining revenue as Idahoans increasingly abandon land line phone service, in August 2017 the Commission raised a monthly surcharge on land lines and questioned the sustainability of the Idaho Universal Service Fund (IUSF). The fund was established in 1988 to ensure all Idahoans have access to local telephone service at rea- sonable rates. This is accomplished by taking revenue collected from a surcharge on land-line users and long-distance call minutes, and distributing it to telecommunications carriers that meet eligibility requirements. Over the last several years, however, revenue has been insufficient to cover distributions. In the most Page 48 Idaho Public Utilities Commission TELECOMMUNICATIONS CASES recent fiscal year, the fund collected nearly a half-million dollars less than it distributed. The trend prompted the Commission to raise the monthly surcharge on each residential line to 25 cents, up from 12 cents, and to 44 cents for each business line, up from 20 cents. The change took effect Sept. 1, 2017. The cost for each minute of a long-distance call also increased, from ½ cent per minute to 0.9 cents per minute. The changes are expected to allow the fund to meet its obligations for the 2018 fiscal year, but the Commission expressed concern that raising the surcharge will cause more Idahoans to abandon their land lines, exacerbating the trend and eventually making the fund unsustainable. To address this, the Commission opened a generic docket to facilitate communication with the general public, telephone company representatives and other stakeholders, with a goal of developing a sustain- able approach for the fund in a declining industry where land lines are being replaced with new tech- nology such as cell phones and Voice over Internet Protocol.