20050513Decision Memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:MAY 13, 2005
RE:IDACOMM, INC. BROADBAND TAX CREDIT APPLICATION;
CASE NO. IZ2-05-
BACKGROUND
On May 10, 2005, the Commission received an Application from IDACOMM, Inc.
(IDACOMM) asking for approval of equipment for the broadband tax credit pursuant to Order No.
28784 and Idaho Code 9 63-30291(4). To be eligible for the tax credit, the taxpayer must obtain
from the Commission an Order confirming that installed equipment qualifies for the tax credit.
STAFF ANALYSIS
IDACOMM's Application indicated it had installed (1) main office and remote terminal
equipment and (2) fiber and copper cables to provide broadband services to Treasure Valley Idaho
customers. IDACOMM's Application indicated it provides broadband services over fiber optic
SONET rings and TDM and Gigabit Ethernet facilities at speeds of 1 544 000 bits per second or
higher. The Company indicated the equipment identified in its Application is necessary and
integral to its broadband network. The Company claims that 100% of the investment will be used
to provide service to Idaho customers. The Application identified nearly two million dollars of
investment in 2004.
STAFF REVIEW
In order to qualify for the credit, the broadband equipment must be capable of transmitting
signals at a rate of at least two hundred thousand (200 000) bits per second to a subscriber and at
least one hundred twenty-five thousand (125 000) bits per second from a subscriber.
DECISION MEMORANDUM MAY 13 2005
Idaho Code 9 63-30291(3)(b). In addition, for a telecommunications carrier, such equipment must
be "necessary to the provision of broadband service and an integral part of a broadband network"
Idaho Code 9 63-30291(3)(b )(i).
ST AFF RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by IDACOMM and
believes that the equipment identified meets this statutory criterion. Therefore, Staff recommends
approval of the Application and further recommends that the Commission forward the approving
Order along with a copy of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Should the Commission approve IDACOMM's Application for an Order confirming that
installed equipment qualifies for the tax credit?
i:udmemoslidacomm 2005 broadband dm
DECISION MEMORANDUM MAY 13 2005