20050506Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:MAY 5, 2005
RE:DIRECT COMMUNICATIONS BROADBAND TAX CREDIT
APPLICATION; CASE NO. DCM-05-
BACKGROUND
On April 11 , 2005, the Commission received an Application from Direct Communications
Rockland Inc. (Direct) 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
Direct's Application indicated it had installed (1) central office equipment and (2) fiber and
copper cables to provide Asynchronous Digital Subscriber Line (ADSL) services to Idaho
customers. Direct's application indicated its service provides speeds of 512 000 bits per second
for uploads from customers, and 8 000 000 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 over five hundred thousand dollars of investment in 2004.
DECISION MEMORANDUM MAY 5 , 2005
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
~ 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 RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Direct 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 Direct's Application for the broadband investment tax
credit?
u:dmemos/direct 05 broadband dm
DECISION MEMORANDUM MAY 5, 2005