20050506Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
W 0 RKIN G FILE
FROM:WAYNE HART
DATE:MAY 5, 2005
RE:ALBION TELEPHONE COMPANY BROADBAND TAX CREDIT
APPLICATION; CASE NO. ALB-05-
BACKGROUND
On April 11 , 2005, the Commission received an Application from Albion Telephone
Company (Albion) asking for approval of equipment for the broadband tax credit pursuant to
Order No. 28784 and Idaho Code ~ 63-30291(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.
ST AFF ANALYSIS
Albion s Application indicated it had installed (1) central office and remote terminal
equipment and (2) fiber and copper cables to provide broadband services to Idaho customers.
Albion s application indicated it provides Asynchronous Digital Subscriber Line (ADSL),
Integrated Digital Services Subscriber Line (IDSL), High Bit Rate Digital Subscriber Line (HDSL)
and Symmetric Digital Subscriber Line (SDSL) services to its customers at speeds of256 000 bits
per second to 1 540 000 bits per second. The Company indicated the equipment is necessary and
integral to its broadband network. The Company claims that 100% of the investment will be used
to provide service to Idaho customers. The Application identified over two million dollars of
investment in 2004.
DECISION MEMORANDUM MAY 5, 2005
ST AFF 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 Code
~ 63-3029I(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 ~ 63-3029I(3)(b )(i).
ST AFF RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Albion 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 Albion s Application for the broadband investment tax
credit?
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u:dmemos/albion 05 broadband dm
DECISION MEMORANDUM MAY 5 , 2005