20070605_1949.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:MAY 29, 2007
RE:CITIZENS TELECOMMUNICATIONS' BROADBAND TAX CREDIT
APPLICATION; CASE NO. CTC-07-
BACKGROUND
On April 18 , 2007, the Commission received an Application from Citizens
Telecommunications ofldaho dba Frontier Communications ofldaho (Frontier) asking for
approval of equipment for the broadband tax credit pursuant to Order No. 28784 and Idaho Code
963-30291(4). 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
Frontier s Application indicated it had installed central office equipment and fiber and
copper cables to provide DSL services to Idaho customers. Frontier indicated its slowest DSL
service provides speeds of 256K bits per second for uploads from customers, and 1M bits per
second for downloads to customers. The Company indicated the equipment is necessary and
integral to its broadband network. The Company claims that 100% of the identified investment
will be used to provide service to Idaho customers. The Application identified over three hundred
thousand dollars of investment in broadband facilities in 2006.
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 subscriber and at
least one hundred twenty-five thousand (125 000) bits per second from a subscriber. Idaho
DECISION MEMORANDUM MAY 29, 2007
Code 9 63-30291(3)(b). In addition, for a telecommunications carrier, such equipment must "
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 Frontier and believes that the equipment identified meets this statutory criterion.
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 Frontier s Application for the broadband investment tax
credit?
i:udmemos/citizens 2006 broadband app memo
DECISION MEMORANDUM MAY 29 2007