20070813Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 10 2007
RE:APPLICATIONS FOR BROADBAND TAX CREDIT:
CASE NOS. CTC-07-02; CTC-07-03; AND CTC-07-04.
BACKGROUND
During July 2007, the Commission received three Applications from Citizens
Telecommunications of Idaho dba Frontier Communications of Idaho (Frontier) seeking
approval of equipment for the broadband tax credit pursuant to Commission Order No. 29784
and Idaho Code 9 63-30291(4). To be eligible for the tax credit, the taxpayer must obtain a
Commission Order confirming that installed equipment qualifies for the tax credit.
STAFF ANALYSIS
1. Additional Broadband Tax Credit for 2006 investments (Case No. CTC-07-02)
On July 10, 2007, Frontier filed an Application for additional 2006 broadband tax credit. These
investments were not listed in the initial Broadband Tax Credit Application for 2006 that the
Commission approved on June 12 2007 (Order No. 30341). Upon review of the latest
Application, Staff requested and received a revised itemization of equipment that will provide
Asymmetric Digital Subscriber Line (ADSL) service to customers in McCall, Cascade
Donnelly, Homedale, New Meadows, Horseshoe Bend, and Garden Valley exchanges. Frontier
states the new equipment will allow network transmission rates of up to 512 Kbps send and 3
Mbps receive. The Application identifies an additional investment for 2006 of approximately
half a million dollars.
DECISION MEMORANDUM - 1 -AUGUST 10, 2007
2. 2004 Broadband Tax Credit (Case No. CTC-07-03). On July 10, 2007, Frontier
submitted aBroadband Tax Credit Application for 2004, identifying the equipment that was
installed to provide Asymmetric Digital Subscriber Line (ADSL) service in McCall, Cascade
Donnelly, Homedale, New Meadows, Horseshoe Bend, and Garden Valley exchanges. Frontier
states that this equipment will allow network transmission rates of up to 512 Kbps send and 3
Mbps receive. The 2004 broadband tax credit investment is approximately $570 000.
3. 2005 Broadband Tax Credit (Case No. CTC-07-04).On July 12, 2007, Frontier
submitted a Broadband Tax Credit Application for 2005, identifying the equipment that was
installed to provide Asymmetric Digital Subscriber Line (ADSL) service to customers in
McCall, Cascade, Donnelly, Homedale, New Meadows, Riggins, Garden Valley, Wilder, and
Parma exchanges. Frontier states that this equipment will allow network transmission rates of up
to 512 Kbps send and 3 Mbps receive. The 2005 broadband tax credit investment is
approximately $723 000.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Frontier and
believes that the equipment identified qualifies for the investment tax credit pursuant to Idaho
Code 9 63-30291. Thus, Staff recommends approval of the Applications and further
recommends that the Commission forward the approving Orders along with a copy of the
original Applications to the Idaho Tax Commission.
COMMISSION DECISION
Should the Commission approve Frontier s Applications for the broadband investment
tax credit?
ffi~
race Seaman
GS:udmemos/CTC Broadband Tax Credit 2004-2006
DECISION MEMORANDUM - 2 -AUGUST 10, 2007