20020730Order No 29083.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF FREMONT TELCOM CONCERNING INVESTMENT FOR INSTALLING QUALIFIED BROADBAND EQUIPMENT TAX CREDIT )
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CASE NO. FRE-T-02-2

ORDER NO. 29083

On March 28, 2002, Fremont Telcom filed an Application to receive an investment tax credit for installation of broadband equipment under Idaho Code § 63-3029I. Pursuant to that section, an Idaho taxpayer may receive a tax credit for installing eligible equipment, which must be part of network facilities 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. In the case of a telecommunications carrier, the qualified broadband equipment also must “be necessary to the provision of broadband service and an integral part of a broadband network.” Idaho Code § 63-3029I(3)(b)(i). A taxpayer may receive the credit only after obtaining from the Commission an Order confirming that the installed equipment qualifies under the statute. To facilitate its review under Idaho Code § 63-3029I, the Commission issued Procedural Order No. 28784 in July 2001, identifying the information that applicants must provide to the Commission to determine whether the installed equipment qualifies for the tax credit.
Fremont’s Application states that during calendar year 2001 it installed equipment as part of its wireline and wireless broadband network for provision of high-speed Internet access and other point-to-point data services to its customers in eastern Idaho. Fremont identified the components as including T1 transceivers, routers, fiber optic multiplexers, power supply and back-ups, and supporting line card accessories. Fremont also included in its Application costs incurred in installing the equipment, including buried cable and fiber and installation labor. Fremont states that it began offering high-speed access to customers during 2001 at transmission rates of 640 kilobits per second (kbps) up to 1.5 mega bits per second (Mbps) via Asynchronous Digital Subscriber Line.
Staff reviewed the Application filed by Fremont to confirm that the equipment is “necessary to the provision of broadband services and an integral part of a broadband network.” Staff stated the equipment installed by Fremont qualifies for the tax credit, except for a load coil included in Fremont’s Application. Load coils boost voice-grade frequencies in long local loops, and must be removed when high-speed data transmissions are required. Staff thus recommended the Commission approve the Application filed by Fremont for a tax credit, excluding the load coil.
Having reviewed the Application filed by Fremont and Staff’s recommendation, the Commission finds that the Company’s Application for a qualifying broadband equipment Order should be granted, excluding the load coil. The Company has adequately demonstrated that it installed the equipment identified in its Application during 2001 to conform with the requirements set forth in Idaho Code § 63-3029I. The Commission further finds that as configured the installed equipment, other than the load coil, is an integral part of a broadband network necessary to deliver broadband services to Idaho customers. It is therefore appropriate for the Commission to issue this Order confirming that Fremont has installed qualified broadband equipment as a precondition to seeking an investment tax credit.
O R D E R
IT IS HEREBY ORDERED that Fremont Telcom’s Application for an Order certifying that it has installed qualified broadband equipment, excluding the load coil in the amount of $400, is granted. The Commission will forward this Order along with the Application filed by Fremont Telcom to the Idaho Tax Commission.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for reconsideration within twenty-one (21) days of the service date of this Order. 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 May 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

vld/O:FRET0202_ws

ORDER NO. 29083 1

Office of the Secretary
Service Date
July 30, 2002