20051109_1384.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:NOVEMBER 7,2005
RE:QWEST 2004 BROADBAND TAX CREDIT APPLICATION;
CASE NO. QWE-05-20.
BACKGROUND
On October 12, 2005, the Commission received an Application from Qwest Corporation
(Qwest) 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
Qwest's Application identifies the Company s broadband investments for the year 2004.
The Application indicated Qwest had installed central office equipment and fiber cables to provide
broadband services to Idaho customers. The Application included general broadband facilities
dedicated line facilities, and inter-office facilities. The Application included a signed affidavit
indicating the submitted investments qualified for the broadband tax credit. The Application
identified a net investment (new investment minus retirements) of more than sixteen (16) million
dollars in 2004.
STAFF REVIEW
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 NOVEMBER 7, 2005
~ 63-3029I(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 ~ 63-3029I(3)(b)(i). Staff has reviewed the list of proposed broadband equipment
originally submitted by Qwest and raised questions about a few of the items submitted. Based
upon these questions, Qwest submitted a letter on November 4 2005 , confirming the removal of
some items and a reduction in the amount of the request. With this change Staff believes that the
remaining equipment identified meets this statutory criteria. Therefore, Staff recommends
approval of the Application, as revised, and further recommends that the Commission forward the
approving Order along with a copy of the original Application and revision letter to the Idaho Tax
Commission.
COMMISSION DECISION
Should the Commission approve Qwest's revised Application for an Order confirming that
the installed equipment qualifies for the broadband investment tax credit?
/'-:
Wayne a
u:dmemos/Qwest 2004 Broadband
DECISION MEMORANDUM NOVEMBER 7, 2005