20050517_1202.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:MAY 13, 2005
RE:VELOCITUS BROADBAND TAX CREDIT APPLICATION;
CASE NO. GNR-05-
BACKGROUND
On May 10, 2005, the Commission received an Application from Velocitus 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
Ve1ocitus s Application indicated it had installed (1) main office and remote terminal
equipment, (2) fiber and copper cables and (3) wireless broadband equipment to provide
broadband services to Idaho customers. V elocitus ' s Application indicated it provides broadband
services over wireless networks, DSL, A TM and frame relay facilities at speeds of 256, 000 bits
per second or higher for downloads, and 128 000 bits per second for uploads. The Company
indicated the equipment identified in its Application 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 two 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
least one hundred twenty-five thousand (125 000) bits per second from a subscriber.
DECISION MEMORANDUM MAY 13 2005
Idaho Code ~ 63-3029I(3)(b). In addition, for a wireless carrier, which would apply to much of
the Velocitus broadband network, such equipment must be "only that equipment that extends from
a transmitting/receiving antenna, including such antenna, which transmits and receives signals to
or from multiple subscribers to a transmitting/receiving antenna on the outside of the structure in
which the subscriber is located.Idaho Code ~ 63-3029I(3)(b )(iv). The wire line network
investments must be "necessary to the provision of broadband service and an integral part of a
broadband network"Idaho Code ~ 63-3029I(3)(b )(i).
ST AFF RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Velocitus and
believes that the equipment identified meets this statutory criterion. 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 Velocitus s Application for an Order confirming that
installed equipment qualifies for the tax credit?
i:dmemosNelocitus 2005 broadband dm
DECISION MEMORANDUM MAY 13 2005