20040902Final Order No 29578.pdf

Office of the Secretary
Service Date
September 2, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF CABLE ONE, INC. FOR AN
INVESTMENT TAX CREDIT FOR
INST ALLING QUALIFIED BROADBAND
EQUIPMENT.ORDER NO. 29578
CASE NO. GNR-O4-
On July 23 , 2004, Cable One, Inc. (Cable One) filed an Application requesting that
the Commission find the Company eligible to receive an Idaho Investment Tax Credit. Pursuant
to Idaho Code 9 63-30291(4), an Idaho taxpayer may receive a tax credit for installing "qualified
broadband equipment" in Idaho. To be eligible for the tax credit, the taxpayer must obtain from
the Commission an Order confirming that the installed equipment meets the definition
qualified broadband equipment set out at Idaho Code 9 63-30291(3)(b). Briefly, qualified
broadband equipment must be 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 cable
operator, the qualified broadband equipment "shall extend from the subscriber s side of the
headend to the outside of the structure in which the subscriber is located.Idaho Code 9 63-
30291(3)(b )(iii). In this Order we find that Cable One has installed qualified broadband
equipment.
THE APPLICATION
Cable One s Application states that during 2003 the Company installed coaxial cable
and fiber optics as part of its "Hybrid Fiber Coax Network" (HFC) in and around the areas
Boise, Idaho Falls, Lewiston, Twin Falls, and Pocatello. The Company indicates it offers high-
speed Internet and broadband services to homes and businesses in Idaho at upstream and
downstream transmission rates from 128 kilobits per second (kbps) up to 1.5 megabits per
second (Mbps). Cable One s network in Idaho consists of approximately 2 447 miles of aerial
coax, 1 877 miles of underground coax, and 524 miles of fiber optic cable and passes by over
290 000 Idaho homes and businesses. The Company has asked for just over $348 000 of
broadband tax credits in the Application, including in that amount its labor costs and the
supporting hardware such as connectors, conduit, splicing equipment, and enclosure materials.
ORDER NO. 29578
STAFF REVIEW
To implement its responsibilities under Idaho Code ~ 63-30291, the Commission
issued Procedural Order No. 28784 in July 2001. This Order identifies information that must be
included in an Application for a broadband tax credit. Once the information has been filed, then
the Commission Staff reviews the Application and submits a recommendation to the
Commission. Staff reviewed the list of broadband equipment submitted by Cable One and
believes that the equipment identified qualifies for the investment tax credit pursuant to Idaho
Code ~ 63-30291. In the case of the drop equipment, Cable One keeps one account for expenses
related to the drop line between the utility pole (or pedestal) and the cable modem inside the
subscriber s premises. Because the broadband tax credit applies only to equipment installed
from the subscriber s side of the headend to the outside of the subscriber s structure, Cable One
estimated that 60% of its expenses are to be associated with the drop line between the utility pole
and the outside of the customer s structure. Staff believes this estimate to be conservative and
accepts that allocation for purposes of compliance with Idaho Code ~ 63-30291(3)(b )(iii).
Consequently, Staff recommends that the Commission issue an Order approving Cable One
Application.
FIND IN GS
Having reviewed Cable One s Application and Staffs recommendation, we find that
the Application for a qualifying broadband equipment Order should be granted. We find that the
broadband equipment identified in the Company s Application meets the qualifying requirements
of Idaho Code ~ 63-30291(b). It is therefore appropriate for the Commission to issue this Order
confirming that Cable One has installed qualified broadband equipment as a precondition to
seeking an Idaho broadband tax credit. The Commission makes no findings regarding the costs
of the installed broadband equipment.
ORDER
IT IS HEREBY ORDERED that Cable One, Inc.s Application for an Order
certifying that it has installed qualifying broadband equipment is granted.
IT IS FURTHER ORDERED that a copy of this Order and a copy of the Application
be served upon the Idaho State Tax Commission.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) issued in this Case No. GNR-04-11 may petition for reconsideration
ORDER NO. 29578
within twenty-one (21) days of the service date of this Order with regard to any matter decided in
this Order issued in this Case No. GNR- T -04-11. Within seven (7) days after any person has
petitioned for reconsideration, any other person may cross-petition for reconsideration. See
Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this :2 A.~
day of September 2004.
tJ2! If
PAUL KJELLANDER, PRESIDENT
SHA H. SMITH, COMMISSIONER
ATTEST:
- /
D. Jewell
ission Secretary
O:GNRT0411 dw
ORDER NO. 29578