20050812Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:AUGUST 12, 2005
RE:CUSTER TELEPHONE CO-OP INC BROADBAND TAX CREDIT
APPLICATION; CASE NO. CUS-05-
BACKGROUND
On June 29 2005, the Commission received an Application from Custer Telephone Co-op
Inc. (Custer) 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.
STAFF ANALYSIS
Custer s Application indicated it had installed central office equipment and fiber and
copper cables to provide DSL services to Idaho customers. The Company asserts that its service
provides speeds of between 128K and 512K bits per second for uploads from customers, and 512K
and 1.5M bits per second for downloads to customers. The Company further states that the
equipment is necessary and integral to its broadband network and that 100% of the investment will
be used to provide service to Idaho customers. The Application identified nearly five hundred
thousand dollars of investment in 2004.
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
DECISION MEMORANDUM AUGUST 12, 2005
63-3029I(3)(b). In addition, for a telecommunications carrier, such equipment must "be necessary
to the provision of broadband service and an integral part of a broadband network"Idaho Code
63-3029I(3)(b)(i). Staff has reviewed the list of proposed broadband equipment submitted by
Custer 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
Should the Commission approve Custer s Application for the broadband investment tax
credit?
u:dmemos/custer 05 bband dm
DECISION MEMORANDUM AUGUST 12, 2005