20020516Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONERKJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RANDY LOBB 
DON HOWELL
LYNN ANDERSON
JOE CUSICK 
CAROLEE HALL
WAYNE HART
BIRDELLE BROWN
BEVERLY BARKER
RON LAW
TONYA CLARK
GENE FADNESS
WELDON STUTZMAN
WORKING FILE
FROM:DOUG COOLEY.
DATE:MAY 16,2002
RE:VELOCITUS,INC.'S APPLICATION FOR BROADBAND EQUIPMENT
TAX CREDIT.
BACKGROUND
On February 21,2002,the Commission received an Application from VELOCITUS,Inc.
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 confirmingthat installed equipment qualifies for the tax credit.
DISCUSSION
Velocitus stated that,during calendar year 2001,it installed various components as part
of its wireline and wireless broadbandnetwork for the provision of high-speed Internet access
and other point-to-pointdata services to customers in Idaho's Treasure Valley and other
communities of Idaho.Such components include transmitting/receiving antennae,data traffic
concentrators,and routers.Velocitus also included in its Application such items as a crane
rental,testing software and installation labor as part of its investment cost.Velocitus indicated
DECISION MEMORANDUM 1 MAY 16,2002
that it began offering high-speedaccess to customers in 2001 at transmission rates from 256
kilobits per second (kbps)up to 45 megabits per second (Mbps).
STAFF REVIEW
Staff has reviewed the list of proposed broadband equipment submitted by Velocitus 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).From discussions with
Velocitus,Staff learned that in some instances subscribers encounter multiplerouters or
concentrators before they reach Velocitus'access point to the Internet at the Boise Airport.In
these cases,customers who do not have a line-of-sightto the Boise Airport may have their data
traffic relayed through the equipment and antennae of those customers who are able to establish
a wireless connection to the Internet at the Boise Airport.Staff has reviewed the network with
Velocitus and the Company has expressed that its Application meets the requirements of Idaho
Code §63-3029I (3)(b)(iv-vii).Staff has also been assured that the installation labor and testing
software included in the Velocitus Application are being depreciated and are directly related to
offering broadband in Idaho.
STAFF RECOMMENDATION
Staff recommends approval of the Company's Application and further recommends that
the Commission forward the approving Order and a copy of the Application to the Idaho Tax
Commission.
COMMISSION DECISION
Should the Commission approve Velocitus,Inc.'s Application for the broadband
investment tax credit?
D'o'ug Co6ley
udmemos/VELOCITUS memo
DECISION MEMORANDUM 2 MAY 16,2002