20050624Final Order No 29811.pdf

Office of the Secretary
Service Date
June 24, 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDACOMM, INC. FOR AN IDAHO TAX CREDIT)
FOR INSTALLING QUALIFIED BROADBAND
EQUIPMENT IN 2004. CASE NO. IZ2-05-
ORDER NO. 29811
On May 10, 2005 , IDACOMM, Inc. filed an Application requesting that the Commission
find the Company eligible to receive an Idaho investment tax credit. Pursuant to Idaho Code
63-30291, 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 equipment has been installed and that it meets the
definition of qualified broadband equipment set out at Idaho Code g 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 telecommunications service providers, the qualified broadband equipment must also "
necessary to the provision of broadband service and an integral part of a broadband network."
Idaho Code g 63-30291(3)(b)(i). In this Order, we find that IDACOMM has installed qualified
broadband equipment.
THE APPLICATION
In its Application, IDACOMM states that it is a facilities-based telecommunications
service provider delivering high-speed broadband telecommunications services (Internet and
other point-to-point data services) to business customers throughout the Treasure Valley. Its
network consists of a three-node SONET OC-48 ring! and a three-node OC-12 subtended ring.
Its point of presence (POP) is collocated with Syringa in West Boise.
During 2004, IDACOMM states that it expanded its existing optical transport network by
installing fiber optic cable, routers, supporting power supply and electronics. IDACOMM
indicates in its Application that it offers network transmission rates from 1.544 megabits per
second (Mbps) up to 18 488 Mbps. The Company maintains that its 2004 broadband investment
1 "SONET" means a synchronous optical network standard, which is a high-speed, fiber optic transmission system.
OC-48" means optical carrier level 48.
ORDER NO. 29811
was approximately $1.95 million and included labor and consulting fees related to its various
broadband construction proj ects.
STAFF RE VIE \tv
To implement its responsibilities under Idaho Code g 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 credit. Once the information has been filed, the
Commission Staffrevievvs the Application and submits a recommendation to the Commission.
Staff has reviewed the list of broadband equipment installed by IDACOMM. Staff
believes that the equipment is necessary for the provision of broadband services and is an
integral part of a broadband network. Consequently, Staff recommends that the Commission
issue an Order approving IDACOMM' s Application.
FINDINGS
Having reviewed IDACOMM' s Application and Staffs recommendation , we find that the
Application for a qualifying broadband equipment Order should be granted. As noted in the 2002
tax credit Order, IDACOMM's use of "dark" fiber optic cable for its broadband network meets
the Federal Communications Commission definition of providing a telecommunications
servIce. Order No. 29285 at 2. Moreover, the Commission has issued a Certificate to
IDACOMM to provide facilities-based local exchange services in Idaho. Order No. 29494. We
find that the Company has demonstrated that it installed qualifying broadband equipment during
2004 in conformance with Idaho Code g 63-30291. 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. Idaho Code gg 63-3029I(3)(b)(i, v-vi).
As noted above, the Staff reported that IDACOMM included labor and consulting fees it
incurred as part of its broadband investment. The Commission makes no findings regarding
whether these costs may properly be included in the costs of qualifying broadband equipment.
That decision is best left to the Tax Commission.
ORDER
IT IS HEREBY ORDERED that IDACOMM' 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.
ORDER NO. 29811
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. IZ2- T -05-
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. IZ2- T -05-1. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code gg 61-
626 and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ~L(~ay of
June 2005.
, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~JjJe D. Jewell
Commission Secretary
O:IZ2TO501 dh
ORDER NO. 29811