20060407Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:APRIL 5, 2006
RE:ALBION TELEPHONE COMPANY BROADBAND TAX CREDIT
APPLICATION; CASE NO. ALB-06-
BACKGROUND
On March 22, 2006, 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 9 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.
STAFF ANALYSIS
Albion s Application indicated it installed new switching equipment, deployed fiber in the
loop, installed digital loop carrier systems and continued development of its fiber backbone to
provide broadband services to Idaho customers. The Application also indicates the Company
installed a high speed wireless system in a neighboring exchange. Albion s Application indicated
it provides ADSL, IDSL, HDSL and SDSL services to its customers at speeds of 256 000 bits per
second to 3 000 000 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 nearly two million dollars of
investment in 2005.
DECISION MEMORANDUM APRIL 5, 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
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 Albion 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
Does the Commission desire to approve Albion s Application for the broadband investment
tax credit?
/tCh.
i:udmemos/albion 2006 broadband dm
DECISION MEMORANDUM APRIL 5, 2006