20040830_920.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DOUG COOLEY
DATE:AUGUST 25, 2004
RE:APPLICATION FOR BROADBAND EQUIPMENT TAX CREDIT
CASE NO. PRJ- T -04-01.
BACKGROUND
On August 9, 2004, the Commission received an Application from Project Mutual
Telephone Cooperative Association, Inc. to receive an investment tax credit for eligible
broadband equipment pursuant to Order No. 28784 and Idaho Code 9 63-30291(4). To be
eligible for the tax credit, the taxpayer must obtain from the Commission an Order confinning
that installed equipment qualifies for the tax credit.
ISCUSSI
Project Mutual stated that, during calendar year 2003 , it installed various components as
part of its wire line and wireless broadband network for the provision of high-speed Internet
access to customers in Cassia, Twin Falls and Minidoka counties. The Company also indicated
that high-speed access to customers began in 2001 at transmission rates from 256 kilobits per
second (kbps) up to 1.54 megabits per second (Mbps).
In 2003 , Project Mutual indicates that it installed fiber optic transceivers and Digital
Subscriber Line (DSL) modems with supporting line cards, ports and cables. Project Mutual also
installed a wireless antenna and coarse wave division multiplexing (CWDM) equipment in
providing ADSL and HDSL broadband service to customers in Minidoka, Twin Falls and Cassia
counties. Project Mutual also capitalized the labor and overhead costs associated with the
DECISION MEMORANDUM AUGUST 25, 2003
installation of this equipment. The Company has asked for just over $22 000 of broadband tax
credits in this Application.
STAFF REVIEW
Staff has reviewed the list of proposed broadband equipment submitted by the companies
and believes the equipment is "necessary to the provision of broadband services and an integral
part of a broadband network" according to Idaho Code 9 63-30291 (3)(b )(i).
STAFF RECOMMENDATION
Staff recommends approval of the Application from Project Mutual and further
recommends that the Commission forward the approving Order and copies of the Applications to
the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to confinn that the equipment in the Application qualifies as
broadband equipment and forward the Applications to the Tax Commission?
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umisc/udmemos/project mutual 2002
DECISION MEMORANDUM AUGUST 25, 2003