20030416Order No 29225.pdf

Office of the Secretary
Service Date
April 16 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF VELOCITUS, INC. CONCERNING
INVESTMENT FOR INSTALLING
QUALIFIED BROADBAND EQUIPMENT
TAX CREDIT ORDER NO. 29225
CASE NO. GNR-O3-
On March 6, 2003 , VELOCITUS, Inc. filed an Application to receive an investment
tax credit for installation of broadband equipment under Idaho Code ~ 63-30291. 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 ~ 63-30291, 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.
VELOCITUS' Application states that during calendar year 2002 it installed
equipment as part of its wireline and wireless broadband network for the provision of high-speed
Internet access and other point-to-point data services to customers in the Treasure Valley and
other communities in Idaho.VELOCITUS identified such components that include
transmitting/receiving antennae, data traffic concentrators, and routers.VELOCITUS also
included in its Application costs incurred in installing the equipment including labor.
VELOCITUS states that it began offering high-speed Internet access to customers during 2001 at
transmission rates of256 kilobits per second (kbps) up to 45 megabits per second (Mbps).
Staff reviewed the list of proposed broadband equipment filed by VELOCITUS and
believes the equipment is "necessary to the provision of broadband services and an integral part
of a broadband network." In some instances VEOCITUS subscribers encounter multiple routers
or concentrators before they reach VELOCITUS' access point to the Internet at the Boise
ORDER NO. 29225
Airport. In these cases, customers who do not have a line-of-sight to 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 reviewed the network
with VELOCITUS, and the Company states that its Application meets the requirements of Idaho
Code ~ 63-3029I(3)(b )(iv-vii). Staff has also been assured that the installation and labor costs
included in VELOCITUS' Application are being capitalized, not expensed, and are directly
related to offering broadband in Idaho. Staff thus recommended the Commission approve the
Application filed by VELOCITUS for a tax credit.
Having reviewed the Application filed by VELOCITUS and Staff s recommendation
the Commission finds that the Company s Application for a qualifying broadband equipment
Order should be granted. The Company has adequately demonstrated that it installed the
equipment identified in its Application during 2002 to conform with the requirements set forth in
Idaho Code ~ 63-30291.The Commission further finds that as configured the installed
equipment 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 VELOCITUS has installed qualified broadband equipment as a precondition to seeking an
investment tax credit.
ORDER
IT IS HEREBY ORDERED that VELOCITUS, Inc.s Application for an Order
certifying that it has installed qualified broadband equipment is granted. The Commission will
forward this Order along with the Application filed by VELOCITUS 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.
ORDER NO. 29225
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this lit
'fIo..
day of April 2003.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Commission Secretary
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ORDER NO. 29225