20070525Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:MAY 21, 2007
RE:CUSTER TELEPHONE CO-OP, INC BROADBAND TAX CREDIT
APPLICATION; CASE NO. CUS-07-
BACKGROUND
On May 4 2007, 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. Custer s Application indicated its
service provides speeds of between 128K and 512K bits per second for uploads from customers
and 512K and 8M bits per second for downloads to customers. 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 and a half million dollars of investment in 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
DECISION MEMORANDUM MAY 21 2007
~ 63-3029I(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 ~ 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 criterion.
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 2007 broadband app memo
DECISION MEMORANDUM MAY 21 , 2007