20040409Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DOUG COOLEY
DATE:APRIL 8, 2004
RE:SUPPLEMENTAL BROADBAND TAX CREDIT APPLICATION;
CASE NO. VZN- T -04-
BACKGROUND
On March 31 , 2004, the Commission received a Supplemental Application from Verizon
Northwest, Inc. 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.
ST AFF ANALYSIS
In its Supplemental Application, Verizon states that it includes additional broadband
equipment that was inadvertently omitted from its original Application already approved in this
case. 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 over 25 miles of fiber optic cable, new copper cable, digital microwave
radio equipment, digital access platforms, line cards, access ports, fiber terminals, and supporting
software. Verizon states that transmission rates range from 128 Kbps to well beyond 1.544
Mbps. The Supplemental Application states that Verizon invested approximately $7 830 000 in
additional qualifying broadband equipment during 2001.
DECISION MEMORANDUM APRIL 8, 2004
ST AFF REVIEW
Staff has reviewed the lists of proposed broadband equipment submitted by Verizon and
believes that the equipment identified qualifies for the investment tax credit pursuant to Idaho
Code ~ 63-30291. Staff also confirmed that the Fujitsu Speedport DSL modems listed in the
Supplemental Application were purchased and retained by Verizon and not leased or purchased
by each DSL customer. Therefore, Staff recommends approval of the Supplemental Application
and further recommends that the Commission forward the approving Order along with a copy of
the Supplemental Application to the Idaho Tax Commission.
COMMISSION DECISION
Should the Commission approve Verizon s Supplemental Application for the broadband
investment tax credit?
~;:
i:udmemosNerizon 2001 supplement
DECISION MEMORANDUM APRIL 8, 2004