20060614_1586.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:JUNE 6, 2006
RE:TETON TELECOM BROADBAND TAX CREDIT APPLICATION;
CASE NO. COL- T -06-03.
BACKGROUND
On May 15 2006, the Commission received an Application from Columbine Telephone
Company dba Teton Telecom (Teton) asking for approval of equipment for the broadband tax
credit pursuant to Order No. 28784 and Idaho Code 9 63-30291(4). The Application was
amended on June 22, 2006. To be eligible for the tax credit, the taxpayer must obtain from the
Commission an Order confirming that installed equipment qualifies for the tax credit.
STAFF ANALYSIS
Teton s Application indicated it had installed central office equipment and fiber cables to
provide DSL and Tl services to Idaho customers. Teton s application indicated its service
provides speeds of between 128K and 1.5M bits per second for uploads from customers, and
256K and 1.5M bits per second for downloads to customers. The Company indicated the
equipment is necessary and integral to its broadband network. The Company claims that lOO%
of the investment will be used to provide service to Idaho customers. The Application identified
over eight hundred thousand dollars of investment in 2005.
STAFF REVIEW
In order to qualify for the credit, the broadband equipment must be capable of
transmitting signals at a rate of at least two hundred thousand (200 000) bits per second to a
DECISION MEMORANDUM JUNE 6, 2006
subscriber and at least one hundred twenty-five thousand (125 000) bits per second from a
subscriber. Idaho Code 9 63-30291(3)(b). In addition, for a telecommunications carrier, such
equipment must "be necessary to the provision of broadband service and an integral part of a
broadband network"Idaho Code 9 63-30291(3)(b)(i). Staff has reviewed the list of proposed
broadband equipment submitted by Teton and believes that the equipment identified meets this
statutory criteria. Therefore, Staff recommends approval of the Application and further
recommends that the Commission forward the approving Order along with a copy of the original
Application to the Idaho Tax Commission.
COMMISSION DECISION
Should the Commission approve Teton s Application for the broadband investment tax
credit?
u:dmemos/teton 06 bband dm
DECISION MEMORANDUM JUNE 6 , 2006