20210330_dk2jo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSION RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DANIEL KLEIN
DATE:MARCH 26,2021
RE:2020 IDAHO TELEPHONE SERVICE ASSISTANCE PROGRAM ANNUALREPORT;CASE NO.GNR-T-21-03.
BACKGROUND
Each year the Administrator of the Idaho Telecommunications Service Assistance Program
(ITSAP)files a report detailing the activities and status of the program during the previous year and
submits a recommended budget for the next year.ITSAP provides eligible recipients with a
reduction in the cost of residential basic local exchange telephone service.Funds for the program
are raised through a surcharge on all end-user business,residential,and wireless access service
lines not receiving the ITSAP credit.The Commission determines the uniform statewide monthly
surcharge and the Idaho Department of Health and Welfare administers the program and grants
limited federal "lifeline"contributions to Idaho's low-income customers.Idaho Code §56-901(l).
Idaho telephone companies provide assistance in the form of a monthlydiscount of $2.50 to
eligible subscribers.Idaho Code §56-902(1).To be eligible for the ITSAP assistance,the
applicant must be the head of a household and meet narrowlytargeted eligibilitycriteria based
solely on income or factors established by the Department of Health and Welfare.Idaho Code
§56-903(1).To be eligible to receive reimbursement for providing low-income benefits (ITSAP
and the federal Lifeline assistance),a company must be designated as an eligible
telecommunications carrier (ETC)by a state commission.47 C.F.R.§54.201(a)(l).
THE 2020 ANNUAL REPORT
In the annual report filed on February 16,2021,the ITSAP Administrator,Kathleen
Toohill,reported a decrease in wireline access lines (19%),a decrease in wireless lines (30%),and
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a significant decrease in the number of ITSAP recipients (20%)from the previous year.The gross
surcharge revenue for the year was reported at $53.
The average number of wireline access lines per month reported to the Administrator was
173,928 compared to 215,906 in 2019,and the average number of wireless access lines per month
was 211,938 compared to 304,298 in 2019.Overall,there was a decrease of approximately
134,338 in the total number of average monthlylines subject to the ITSAP surcharge (385,866
lines per month compared to 520,204 in 2019).These numbers are under reported due to a lack of
wireless providers reporting line counts due to the surcharge suspension.
The average number of reported ITSAP recipients per month in 2020 (1,180)decreased by
20%from 2019 (1,471).Telecommunications companies received $35,521.25 in disbursements for
ITSAP credits paid to eligible recipients compared to $44,143 in 2019.Disbursements for
company administrative costs were $8,892.62,a decrease from 2019 ($11,394).
The Administrator's fees and expenses were $9,971.79 for the year.The fund's cash
balance at the end of the year was reported at $1,103,645.45.
2020 BUDGET AND TRENDS
The ITSAP Administrator projects the funding requirements for 2020 will increase for the
first time in years.There have been several new companies that have been granted access to
participate in ITSAP.The Administrator estimates that the ITSAP reimbursements to the
companies at approximately $309,456.The ITSAP Administrator expenses are projected to be
$17,750 including a triennial audit.
To establish the 2020 budget,the Administrator estimates that the number of access lines
subject to the surcharge will be approximately 385,866 per month and the average number of
ITSAP recipients will increase to approximately 7180 per month.Based on this data,Ms.Toohill
projects the funding requirement for 2021 will be approximately $327,206,and the end-of-year
balance is expected to be about $776,439.
ADMINISTRATOR'S 2020 FUNDING RECOMMENDATIONS
Ms.Toohill states that there was another significant drop in credit recipients during 2020.
Even with the prospect of increased participation,the Administrator recommends that the surcharge
rate continue to be suspended an additional year,but that all companies must report access lines to
her during this period.The Administrator affirms that the fund balance will be more than sufficient
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to reimburse companies for assistance credits provided,as well as maintain an adequate balance for
unexpected occurrences.The estimated balance for the end-of-year 2021 is projectedto be
$776,439.
STAFF ANALYSIS AND FUNDING RECOMMENDATION
Staff has reviewed the 2020 annual report,the proposed 2021 budget,and the funding
recommendation.Staff agrees with the Administrator's assessment and supports the
Administrator's recommendation to continue suspending the surcharge rates for all wireline and
wireless access lines for another year.Staff believes the fund balance will be sufficient to meet the
2021 expenses as well as provide for any unforeseen changes to the number of ITSAP recipients.
Thus,Staff recommends that the Commission approve the Administrator's 2021 budget and
approve the recommendationto suspend the surcharge rates for calendar year 2021.Staff also
recommends the Commission direct all companies to report access line counts to the administrator
while the surcharge is suspended.Staff and the Administrator will continue to monitor the number
of recipients and make changes if needed if participation continues to increase.
COMMISSION DECISION
1.Does the Commission wish to accept the 2020 annual report and adopt the
Administrator's 2021 budget?
2.Does the Commission wish to adopt the Administrator's recommendationto continue
suspending the ITSAP assessments for another year?
3.Does the Commission wish to direct all companies to report access line counts to the
administrator while the surcharge is suspended?
Daniel Klein
Udmemos/2020 ITSAPAnnual Report dec memo
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