20031114Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DOUG COOLEY
DATE:NOVEMBER 7,2003
RE:FILER MUTUAL TELEPHONE COMPANY'S APPLICATION FOR
BROADBAND EQUIPMENT TAX CREDIT; CASE NO. FIL- T -03-
BACKGROUND
On November 4, 2003, the Commission received an Application from. Filer Mutual
Telephone Company to receive an investment tax credit for eligible broadband equipment
pursuant to Order No. 28784 and Idaho Code ~ 63-3029I( 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.
DISCUSSION
Filer stated that, during calendar year 2002 , it installed various components as part of its
wireline broadband network for the provision of high-speed Internet access to customers in its
Idaho service area. The Company indicated that it offers high-speed access to customers at
transmission rates up to 1.54 megabits per second (Mbps). The Application indicates that Filer
offers Asynchronous Digital Subscriber Line (ADSL) to approximately 190 customers using
primarily AFC and Nortel brand equipment.
Filer represents that it installed an AFC brand integrated multiservice access platform in
August 2001 , Nortel modems in September 2000, and a Nortel Digital Subscriber Line Access
Multiplexer (DSLAM) in November 2001 all within the Twin Falls area. Filer also capitalized
the labor and overhead costs associated with the installation of this equipment.
DECISION MEMORANDUM NOVEMBER 7 2003
STAFF REVIEW
Staff has reviewed the list of proposed broadband equipment submitted by Filer and
believes the equipment is "necessary to the provision of broadband services and an integral part
of a broadband network" according to Idaho Code ~ 63-3029I(3)(b)(i). Staff has had discussions
with Filer to clarify the nature of various pieces of equipment and has also been assured that the
installation labor, overhead, and supporting equipment is directly related to offering broadband
in Idaho.
STAFF RECOMMENDATION
Staff recommends approval of the Application from Filer Mutual Telephone Company
and further recommends that the Commission forward the approving Order and copies of the
Applications to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to confirm that the equipment in the Application qualifies as
broadband equipment and forward the Application to the Tax Commission?
i:udmemos/filer
DECISION MEMORANDUM NOVEMBER 7 , 2003