20061027_1707.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:OCTOBER 18, 2006
RE:CAMBRIDGE TELEPHONE BROADBAND TAX CREDIT
APPLICATION; CASE NO. CAM-06-01.
BACKGROUND
On October 12 2006, the Commission received an Application from Cambridge
Telephone Company (Cambridge) asking for approval of a 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 an Order from the Commission confirming that installed equipment qualifies for the
tax credit.
STAFF ANALYSIS
Cambridge s Application indicated it had installed central office equipment and fiber
cables to provide DSL, Tl , DS3 and Frame Relay services to Idaho customers. Cambridge
Application indicated its service provides speeds of between 256K and 3M bits per second to
customers. The Company indicated the equipment is necessary and integral to its broadband
network. The Company claims that 100% of the investment will be used to provide service to
Idaho customers. The Application identified nearly one and a half million 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
subscriber and at least one hundred twenty-five thousand (125 000) bits per second from a
DECISION MEMORANDUM OCTOBER 18, 2006
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 installed
broadband equipment submitted by Cambridge and believes that the equipment identified meets
the 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 original
Application to the Idaho Tax Commission.
COMMISSION DECISION
Should the Commission approve Cambridge s Application for the broadband investment
tax credit?
whartiudmemos/Cambridge 2006 broadband memo
DECISION MEMORANDUM OCTOBER 18, 2006