20040325Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DOUG COOLEY
DATE:MARCH 25, 2004
RE:BROADBAND TAX CREDIT APPLICATIONS
CASE NOS. VZN-04-02; DCM-04-01; ALB-04-01; SZ9-04-01;
AND GNR- T -04-03.
BACKGROUND
In February and March 2004, the Commission received several Applications asking for
approval of equipment for the broadband tax credit pursuant to Order No. 28784 and Idaho Code
~ 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
Verizon Northwest - In its Application, Verizon states that during calendar year 2001 it
installed equipment used to provide DSL and high-speed data (e.g. T-1) services to customers in
the exchanges of Bayview, Bonners Ferry, Coeur d' Alene, Genesee, Hayden Lake, Kellogg,
Moscow, Orofino, Pinehurst, Sandpoint, and St. Maries. Such components include digital access
platforms, long-range digital transport, line cards, access ports, fiber optic cable, fiber terminals
and supporting software. Verizon states that transmission rates range from 128 Kbps to well
beyond 1.544 Mbps. The Application states that Verizon invested approximately $1 150 000 in
qualifying broadband equipment during 2001.
Direct Communications. Rockland Inc . - Direct's Application states that during calendar
year 2003, the Company installed equipment used to provide ADSL services to customers in
Bear Lake, Bannock, Caribou, and Power counties. Such equipment includes fiber optic placing
equipment, fiber optic cable, a DSLAM, digital line cards, Ethernet network extenders, an access
DECISION MEMORANDUM MARCH 25, 2004
multiplexer, and supporting labor and software. The Company states that transmission rates
range from 512 kbps upstream to 8 Mbps downstream. Direct states that it invested
approximately $751 000 in qualifying broadband equipment during 2003.
Albion Telephone Company - Albion s Application states that during calendar year 2003
the Company installed over 80 miles of fiber optic cable, digital line cards, and supporting power
supply and software in providing ADSL services in Custer, Oneida, Butte, and Cassia counties.
The Company states that transmission rates range from 256 kbps to 1.54 Mbps. Albion states
that it invested approximately $2 138 000 in qualifying broadband equipment during 2003.
Syringa Networks. LLC - Syringa s Application states that it placed over 260 miles of
fiber optic cable in Ada, Canyon, Washington, Gem, Clark, Blaine, and Camas counties. The
Company also states that it installed digital switching equipment, SONET multiplexers, Dense
Wave Division Multiplexers (DWDM), testing equipment, modular routers, and supporting
power supply and software. Syringa offers high-speed transport, frame-relay, and other related
services to customers at transmission rates of 1.544 Mbps and higher. The Company also states
that all of its customers are Idaho subscribers. Syringa states that it invested approximately
$13 644 000 in qualifying broadband equipment during calendar year 2003.
Salmon Internet - Salmon Internet's Application states that in installed wireless
broadband access units, antennae, and supporting lightning arrestors during calendar years 2001
and 2002. The Company did not indicate the cost of the equipment but states that transmission
rates are between 256 kbps and IMbps for its customers in Lemhi County. Salmon Internet'
network consists of one base station and two repeater stations to offer high-speed internet access
to customers in the Salmon, Idaho area.
STAFF REVIEW
Staff has reviewed the lists of proposed broadband equipment submitted by the
Companies and believes that the equipment identified qualifies for the investment tax credit
pursuant to Idaho Code ~ 63-30291. In the case of Salmon Internet, Staffis not aware of the
purchase arrangement or amounts but believes the equipment is installed and complies with
Idaho Code ~ 63-3029I(3)(b)(iv). Therefore, Staff recommends approval of the Applications and
further recommends that the Commission forward the approving Orders along with a copy of the
original Applications to the Idaho Tax Commission.
DECISION MEMORANDUM MARCH 25, 2004
COMMISSION DECISION
Should the Commission approve Applications for the broadband investment tax credit?
DC:udmemos/group broadband memo 2
DECISION MEMORANDUM MARCH 25 , 2004