20050503_1180.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:APRIL 25, 2005
RE:VERIZON BROADBAND TAX CREDIT APPLICATION;
CASE NO. VZN-05-
BACKGROUND
On March 22 2005 , the Commission received an Application from Verizon Northwest
, (Verizon) 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
Verizon s Application indicated it had installed central office equipment, fiber and copper
cables, digital radio, and pairgain devices, all capable of transmitting data in excess of200 000 bits
per second to or from the consumer and will be used to provide DSL or high speed data services.
The Company indicated the equipment is necessary and integral to its broadband network, and
installed in the Bayview, Bonners Ferry, Clarkfork, Coeur d' Alene , Hayden Lake, Kellogg,
Moscow, Mullen, Orofino, Pinehurst, Plummer-Worley, Post Falls, Priest River, Rathdrum
Sandpoint, Spirit Lake, St. Maries and Wallace exchanges. The Company claims that 100% of the
investment will be used to provide service to Idaho customers. The Application identified over 10
million dollars of investment in 2004.
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
DECISION MEMORANDUM APRIL 25, 2005
least one hundred twenty-five thousand (125 000) bits per second from a subscriber. Idaho Code
63-3029I(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
63-3029I(3)(b)(i). Staff has reviewed the lists of proposed broadband equipment submitted by
Verizon 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 original Application to the Idaho Tax Commission.
COMMISSION DECISION
Should the Commission approve Verizon s Application for the broadband investment tax
credit?
u:dmemos/vzn 05 bband dm
DECISION MEMORANDUM APRIL 25 , 2005