20051014Decision memo.pdf

ECISI 0 N MEMO RAND UM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
LEGAL
W 0 RKIN G FILE
FROM:WAYNE HART
DATE:OCTOBER 14, 2005
RE:RURAL TELEPHONE BROADBAND TAX CREDIT APPLICATION;
CASE NO. RUR-05-
BACKGROUND
On October 6 2005, the Commission received an Application from Rural Telephone
Company, Inc. (Rural) 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
Rural's Application identifies the Company s broadband investments for the years 2002
2003 and 2004. The Application indicated Rural had installed central office equipment, remote
terminal equipment and fiber optic cables to provide ADSL and ADSL+2 broadband services to
Idaho customers. The Application included a signed affidavit indicating the submitted investments
qualified for the broadband tax credit. The Application identified a combined investment over the
three years of over four million dollars.
ST AFF 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. Idaho Code
DECISION MEMORANDUM OCTOBER 14, 2005
63-3029I(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 63-3029I(3)(b)(i). Staff has reviewed the list of proposed broadband equipment submitted by
Rural 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 Rural's Application for an Order confirming that the
installed equipment qualifies for the broadband investment tax credit?
u:dmemos/rural 2005 broadband memo
DECISION MEMORANDUM OCTOBER 14, 2005