20020308Order No 28974.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION FROM FARMERS MUTUAL TELEPHONE comPANY CONCERNING INVESTMENT FOR INSTALLING QUALIFIED BROADBAND EQUIPMENT TAX CREDIT. )
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CASE NO. FMT-T-01-1

ORDER NO. 28974

On December 21, 2001, Farmers Mutual Telephone Company filed an Application requesting that the Commission issue an Order confirming that Farmers has installed broadband equipment that qualifies for a state investment tax credit pursuant to Idaho Code § 63-3029I. This Code section allows a taxpayer to receive an investment tax credit for eligible broadband equipment installed in Idaho between January 1, 2001 and December 31, 2005. After reviewing the Company’s Application and the Commission Staff’s report, we find that Farmers has installed qualified broadband equipment.
BACKGROUND
Last year the Legislature enacted House Bill 377 that authorizes state income tax credits for Idaho taxpayers who install qualifying broadband infrastructure in Idaho. Idaho Code § 63-3029B(3)(a)(ii). “Qualified broadband equipment” is defined as network facilities installed in Idaho that are capable of transmitting signals at a rate of at least 200,000 bits per second (bps) to a subscriber and at least 125,000 bps from a subscriber. Idaho Code § 63-3029I(3)(b). In the case of a telecommunications carrier such as Farmers, qualified broadband equipment shall be: (1) necessary to the provision of broadband services; (2) an integral part of a broadband network; (3) primarily used to provide services in Idaho to public customers; and (4) installed after January 1, 2001 and before December 31, 2005. Idaho Code § 63-3029I(1), (3)(i) and (vii). To be eligible for the tax credit, a taxpayer must apply and obtain “from the Idaho public utilities commission an order confirming that installed equipment is qualified broadband equipment.” Idaho Code § 63-3029I(4). This latter subsection also provides that the Commission “may issue procedural orders necessary to implement this section.” Id.
To implement its responsibilities under Idaho Code § 63-3029I, the Commission issued Procedural Order No. 28784 in July 2001. This Order identified nine categories of information that must be included in a broadband application so that the Commission can determine whether the installed equipment is “qualified broadband equipment.”
FARMERS’ APPLICATION
In its Application, Farmers submitted the necessary information required by Order No. 28784. In its verified Application, Farmers stated that it is offering broadband asynchronous digital subscriber line (ADSL) services to its customers in and around Fruitland and NuAcres, Idaho. App. at ¶ 2, 3. The Company claimed that it installed its broadband equipment between January and March 2001. The Company maintained that more than 1,000 of its customers (approximately 30% of its total customer base) are now offered broadband services at ADSL speeds to and from the customer of 256,000 bps or 512,000 bps. The Company’s Application also lists the various broadband equipment components that it installed.
The Commission Staff reviewed Farmers’ list of installed broadband equipment and agreed that the equipment qualifies for the investment tax credit pursuant to Idaho Code § 63-3029I. Consequently, the Staff recommended that the Commission approve the Company’s Application.
DISCUSSION AND FINDINGS
Having reviewed Farmers Mutual’s Application and the Staff’s recommendation, we find that the Company’s Application for a broadband equipment Order should be granted. We find that the Company has adequately demonstrated that it has installed qualifying broadband equipment in conformance with the requirements set out in Idaho Code § 63-3029I. We further find that as configured, the installed equipment is an integral part of a broadband network necessary to deliver broadband services to Idaho customers. Consequently, it is appropriate for the Commission to issue this Order confirming that Farmers Mutual has installed qualified broadband equipment as a precondition to seeking an investment tax credit.
O R D E R
IT IS HEREBY ORDERED that Farmers Mutual Telephone Company’s Application for an Order certifying that it has installed qualified broadband equipment is granted.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. FMTT011 may petition for reconsideration within twenty-one (21) days of the service date of this order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this Case No. FMTT011. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of March 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

vld/O:FMTT0101_dh

ORDER NO. 28974 1

Office of the Secretary
Service Date
March 8, 2002