20080222Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER REDFORD
COMMISSIONER SMITH
CO MMISSI 0 NER KEMPTON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:FEBRUARY 22 , 2008
RE:CITIZENS TELECOMMUNICATIONS COMPANY OF IDAHO'
APPLICATION FOR BROADBAND EQUIPMENT TAX CREDIT;
CASE NO. CTC-08-
BACKGROUND
To be eligible for income tax credit for investment in broadband equipment, the taxpayer
must obtain a Commission Order confirming that installed equipment is qualified broadband
equipment. Order No. 28784 and Idaho Code 9 63-30291(4). 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 63-3029I(3)(b). In the case of a telecommunications carrier
such qualifying equipment shall be necessary to the provision of broadband service and an
integral part of a broadband network. Idaho Code 9 63-3029I(3)(b )(i).
STAFF ANALYSIS
On February 5 , 2008 , the Commission received an Application from Citizens
Telecommunications ofIdaho, dba Frontier Communications ofIdaho (Citizens) to receive an
investment tax credit for eligible broadband equipment. In this filing, Citizens stated that during
calendar year 2007, it installed various components as part of its Asymmetrical Digital
Subscriber Line (ASDL) broadband network for the provision of high-speed Internet access to
customers in McCall, Cascade, Donnelly, Homedale, New Meadows, Riggins, Garden Valley,
Horseshoe Bend, Wilder, and Parma. Citizens indicates in its Application that it offers network
DECISION MEMORANDUM FEBRUARY 22 , 2008
transmission rates of up to 3 Mbps from a subscriber and of up to 512 Kbps to a subscriber. The
Company states that broadband service is now available to approximately 87% of the total
customer base.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Citizens and
believes that the equipment identified qualifies for the investment tax credit pursuant to Idaho
Code 9 63-30291 (3)(b)(i). Staff recommends approval ofthe 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?
IA~~ ~MA-
Grace Seaman
i:udmemos/ctc-O8-0 1
DECISION MEMORANDUM FEBRUARY 22, 2008