20070706Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:JULY 3, 2007
RE:SIL VER STAR TELEPHONE COMPANY'S BROADBAND TAX CREDIT
APPLICATION; CASE NO. SIL-07-
BACKGROUND
On April 12, 2007 , the Commission received an Application from Silver Star Telephone
Co., Inc. (Silver Star) 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
Silver Star s Application indicated it had installed central office equipment and fiber optic
cables to provide DSL and Tl services to Idaho customers. The Application indicates that its
service provides speeds of between 64K and 1.5M bits per second for uploads from customers, and
256K and 1.5M bits per second for downloads to customers. In a conversation with Staff, the
Company corrected the minimum upload speed to 128k. The Company further states that the
equipment is necessary and integral to its broadband network and that 100% of the investment will
be used to provide service to Idaho customers. The Application identified approximately
seventeen thousand dollars of investment in 2006.
DECISION MEMORANDUM JULY 3 2007
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. Idaho Code
963-3029I(3)(b). In addition, for a telecommunications carrier, such equipment must "
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 Teton 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 Application to the Idaho Tax
Commission.
COMMISSION DECISION
Should the Commission approve Silver Star s Application for the broadband investment tax
credit?
u:dmemos/silver star 2007 broadband memo
DECISION MEMORANDUM JULY 3 , 2007