20230425_GNRT2303_jk.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSION HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
LEGAL
FROM:JOHAN E.KALALA-KASANDA
DAYN HARDIE
DATE:APRIL 25,2023
RE:2022 IDAHO TELEPHONE SERVICE ASSISTANCE PROGRAM ("ITSAP")
ANNUAL REPORT;CASE NO.GNR-T-23-03.
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 ("IDHW")administers the program
and grants limited federal "lifeline"contributions to Idaho's low-income customers.Idaho Code §
56-901(l).Idaho telephonecompanies assist in the form of a monthlydiscount of $2.50 to eligible
subscribers.Idaho Code §56-902(1).To be eligible for ITSAP assistance,the applicant must be
the head of a household and meet narrowlytargeted eligibilitycriteria based solely on income or
factors established by IDHW.Idaho Code §56-903(1).To be eligible to receive reimbursement
for providing low-income benefits (ITSAP and 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).
In 2012,IDHW introduced legislation amending Idaho Code §56-902.The legislation
reduced the amount of the monthlyITSAP assistance credit from $3.50 to $2.50.The ITSAP
DECISION MEMORANDUM -1 -APRIL 25,2023
surcharge rate remained suspended during 2022,and no gross or net surcharge revenue was
collected or deposited during the year ending December 31,2022.
THE 2022 ANNUAL REPORT
On February 15,2023,the Commission received the annual ITSAP report.In the report,as
illustrated herein in Table No.1 below,the Program Administrator,Kathleen Toohill,reported an
11%decrease in local access lines compared to a decrease of 6%in the previous year 2021.The
wireless access lines increased by 11%compared to a 1%decrease in the year 2021.The number
of ITSAP credit recipients in 2022 was 80,604,a decrease of 29%compared to the 113,880
reported in the previous year.The gross surcharge revenue for the year was reported at $0 since the
surcharge is suspended.
Table No.1:ITSAP Trend of Reported Monthly Data
Year 1:Year 2:Year
Years 2018 2019 3:2020 Year 4:2021 Year 5:2022
Local
Access %%
Lines Amount Amount Amount Amount Change Amount Change
Residential 1,525,716 1,302,666 1,198,146 1,003,491 976,314
Business 1,414,148 1,288,214 888,994 964,291 769,421
Total 2,939,864 2,590,880 2,087,140 1,967,782 -6%1,745,735 -11%
Wireless
Access 3,722,983 3,651,576 2,543,252 2,523,243 -1%2,797,830 11%
Credit
Recipients 21,455 17,657 14,157 113,880 704%80,604 -29%
The quarterly average number of wireline access lines reported to the Administrator was
244,079 for residential lines,192,355 for business lines,and the quarterly average number of
wireless access lines reported was 699,458.There is a lag in receiving reports for quarter 4 lines
due to some companies reporting quarterly and monthlyup to 2-3 months behind,leading to a rise
in lines for Ql of the subsequent year.Companies report monthly,quarterly,and even annually,
DECISION MEMORANDUM -2 -APRIL 25,2023
hence the provision of quarterly averages.Additionally,these numbers are underreporteddue to a
lack of wireless providers reporting line counts due to the surcharge suspension.
The average number of reported ITSAP recipients per month in 2022 was 6,725 recipients
or 80,692 per year.This is a decrease from the 9,446 per month,or 113,600 per year,reported in
2021.Telecommunications companies received $201,731 in disbursements for ITSAP credits paid
to eligible recipients compared to the $284,000 that was reported in 2021.Disbursements for
company administrative costs of the program were $24,975,a decrease from the $34,998 reported
in 2021.
During 2022,ITSAP reimbursed companies for net monthlydiscounts provided to eligible
subscribers and costs of administering the program,so checks were written in the total amount of
$226,318.89.The Administrator's fees and expenses were $9,084 for the year.The fund's cash
balance at the end of the year was reported at $603,651.
2023 BUDGET AND TRENDS
The ITSAP Administrator projects that the funding requirements for 2023 will increase.
There have been several new companies that have been granted access to participate in the ITSAP
program.The Administrator estimates the ITSAP disbursements at approximately $235,000,
includingthe ITSAP Administrator projected expenses of $9,143.20.
To establish the 2023 budget,the Administrator estimates that the number of access lines
subject to the surcharge will be approximately 370,508 per month and the average number of
ITSAP recipients will amount to approximately 6,725 per month or 80,700 per year.Based on this
data,the ITSAP Administrator,Ms.Toohill,projects the fundingrequirement for 2023 will be
approximately $235,000 and the end-of-year 2023 balance is expected to be $335,000.
ADMINISTRATOR'S 2023 FUNDING RECOMMENDATIONS
Ms.Toohill represents that,during 2022,there were significant numbers of credit
recipients.Even with the increased participation,Ms.Toohill recommends that the surcharge rate
continue to be suspended for an additional year,but that all companies must report access lines to
her during this period.Ms.Toohill confirms that the fund balance should prove sufficient for
another year of the projected credit recipients,company administrative costs,and fund
administration with about $235,000 estimated for the 2023 budget.The estimated balance for the
DECISION MEMORANDUM -3 -APRIL 25,2023
end-of-year 2023 is projected to be $335,000 with approximately 6,725 credit recipients estimated
per month (or 80,700 for the whole year)and the related fund administration costs.
STAFF ANALYSIS AND FUNDING RECOMMENDATION
Staff reviewed the 2022 annual report of the ITSAP,the proposed 2023 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
2023 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 2023 budget and
approve the recommendation to suspend the surcharge rates for the calendar year 2023.
Additionally,Staff recommends the Commission direct all companies to report access line counts
to the administrator while the surcharge rates are 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
l.Does the Commission wish to accept the 2022 ITSAP annual report and adopt the
Administrator's 2023 budget?
2.Does the Commission wish to adopt the Administrator's recommendation to continue
suspending the ITSAP assessments for anotheryear?
3.Does the Commission wish to direct all companies to report access line counts to the
administrator while the surcharge is suspended?
I
I
Johan E.Kalala-Kasia
Udmemos/GNR-T-23-03 ITSAP 2022 Report Decision Memo
DECISION MEMORANDUM -4 -APRIL 25,2023