20040303Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DOUG COOLEY
DATE:FEBRUARY 25, 2004
RE:CITIZENS TELECOMMUNICATIONS COMPANY OF IDAHO'
APPLICATION FOR BROADBAND EQillPMENT TAX CREDIT;
CASE NO. CTC-04-
BACKGROUND
On February 17, 2004, the Commission received an Application from Citizens
Telecommunications Company of Idaho to receive an investment tax credit for eligible
broadband equipment 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 conf1ITI1ing
that installed equipment qualifies for the tax credit.
DISCUSSION
Citizens stated that, during calendar year 2002 and 2003, it installed various components
as part of its wireline Asymmetrical Digital Subscriber Line (ADSL) broadband network for the
provision of high-speed Internet access to customers in McCall, New Meadows, Riggins
Cascade and Donnelly. Such components include splitters, line cards, access ports, and
supporting software. Citizens also included in its Application such items as installation and
labor as part of its investment cost. The Application is for approximately $46 000 of broadband
investment in 2002 and approximately $417 000 in 2003. Citizens indicates in its Application
that it offers network transmission rates of up to 1 megabits per second (Mbps) from a subscriber
and up to 128 Mbps to a subscriber. The Company has been approved for previous broadband
investment tax credits in Case No. CTZ- T -02-
DECISION MEMORANDUM FEBRUARY 25, 2004
STAFF REVIEW
Staff has reviewed the list of proposed broadband equipment submitted by Citizens and
believes the equipment is "necessary to the provision of broadband services and an integral part
of a broadband network" according to Idaho Code 9 63-30291 (3)(b )(i).
STAFF RECOMMENDATION
Staff recommends approval of the Company s Application and further recommends that
the Commission forward the approving Order and a copy of the Application to the Idaho Tax
Commission.
COMMISSION DECISION
Should the Commission approve Citizens Telecommunications Company ofIdaho
Application for the broadband investment tax credit?
tli Cooley
udmemos/citizens memo 2003
DECISION MEMORANDUM FEBRUARY 25 , 2004