20040609Final Order No 29523.pdf

Office of the Secretary
Service Date
June 9, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
QWEST CORPORATION FOR AN INVESTMENT
T AX CREDIT FOR INSTALLING QUALIFIED BROADBAND EQUIPMENT.
CASE NO. QWE-O4-
ORDER NO. 29523
On May 10, 2004, Qwest Corporation 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 ~ 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 telecommunications service provider, the qualified broadband equipment must also "
necessary to the provision of broadband service and an integral part of a broadband network."
Idaho Code ~ 63-30291(3)(b )(i).
broadband equipment.
In this Order we find that Qwest has installed qualified
THE APPLICATION
Qwest states that during calendar year 2002, it installed various components as part of
its wireline broadband network for the provision of high-speed Internet access in its Idaho
service areas. Installed broadband equipment included a synchronous transfer mode (ATM)
switches and frame relay switches at various locations throughout southern Idaho. Qwest also
installed interoffice trunks and facilities that are necessary to connect customers to the Internet.
The Company stated that these interoffice facilities "do not constitute specific individual
broadband services that are offered to subscribers. Rather, these assets comprise part of the
network that provides the means by which the above services are offered.Qwest also
capitalized such items as labor, engineering, transportation, and other overhead costs associated
with the installation of this equipment. The Company asserts that it installed qualifying
broadband equipment during 2002 in excess of $8 million. The Company states that the installed
ORDER NO. 29523
equipment is capable of offering high-speed access to customers at transmission rates from 256
kilobits per second (kbps) to more than 100 megabits per second (Mbps).
ST AFF 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 credit. Once the information has been filed, the
Commission Staff reviews the Application and submits a recommendation to the Commission.
Staff has reviewed the list of broadband equipment installed by Qwest. 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 Qwest's Application.
FINDINGS
Having reviewed the Application and Staff s recommendation we find that the
Application for a qualifying broadband equipment Order should be granted. Qwest has
demonstrated that it installed qualifying broadband equipment identified in its Application
during 2002 in conformance with Idaho Code ~ 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 ~~ 63-30291(3)(b )(i, iv-vi). It is therefore appropriate
for the Commission to issue this Order confirming that Qwest 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 or whether it is appropriate
to include installation and labor as part of its tax credit.
ORDER
IT IS HEREBY ORDERED that Qwest's Application for an Order certifying that it
has installed qualifying broadband equipment in 2002 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) or in interlocutory Orders previously issued in this Case No. QWE- T -04-
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
ORDER NO. 29523
this Case No. QWE- T -04-Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code ~~ 61-
626 and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 1f"
day of June 2004.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
vldlO: QWET0408 - dh
ORDER NO. 29523