20060724_1625.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:JULY 13, 2005
RE:VERIZON BROADBAND TAX CREDIT APPLICATION;
CASE NO. VZN-06-
BACKGROUND
On June 2006 the Commission received an Application from Verizon Northwest, Inc.
(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
V erizon' 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 nearly
five and a half million dollars of investment in 2005.
DECISION MEMORANDUM JULY 13 , 2006
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. Idaho Code
~ 63-30291(3)(b). In addition, for a telecommunications carrier, such equipment must "
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 lists of proposed broadband equipment
submitted by Verizon and believes that the equipment identified meets these 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:dmemosNerizon 2006 bband app memo
DECISION MEMORANDUM JULY 13 2006