20060614_1587.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:JUNE 6, 2006
RE:SILVER STAR TELEPHONE CO BROADBAND TAX CREDIT
APPLICATION; CASE NO. SIL-06-
BACKGROUND
On May 15 2006, 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 ~ 63-30291(4). A revised application was submitted on May
2006. 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
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 Company asserts that its
service provides speeds of between 128K and 1.5M bits per second for uploads from customers
and 256K and 10 5M bits per second for downloads to customers. 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 nearly
forty thousand dollars of investment in 2005.
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
DECISION MEMORANDUM JUNE 6, 2006
subscriber and at least one hundred twenty-five thousand (125 000) bits per second from a
subscriber. Idaho Code ~ 63-30291(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 ~ 63-30291(3)(b)(i). Staff has reviewed the list of proposed
broadband equipment submitted by Teton and believes that the equipment identified meets this
statutory criteria. 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 06 bband dm
DECISION MEMORANDUM JUNE 6, 2006