20070130_1814.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:JANUARY 24, 2007
RE:FIRST STEP INTERNET BROADBAND TAX CREDIT APPLICATION;
CASE NO. GNR- T -06-
BACKGROUND
On December 18, 2006 , the Commission received an Application from First Step Internet
LLC (First Step) 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
First Step s Application indicated it provides broadband services using both wired and
wireless technologies, using its own facilities, as well as those leased from local telephone
companies. First Step has built a point-to-point wireless network to provide broadband services to
Idaho customers in the rural communities around Lewiston and Moscow. Customers on the
wireless network are provided broadband services at a variety of speeds, from a minimum of
256 000 bits per second (256kbps) to as much as 5 million bits per second 5Mbps. Wired services
are provided at speeds from 256kbps download/128kbps upload to as fast as 100Mbps. 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 approximately a half million dollars of
investment.
DECISION MEMORANDUM JANUARY 24, 2007
ST AFF 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 (125000) 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 RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by First Step 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 First Step s Application for an Order confirming that
installed equipment qualifies for the tax credit?
i:udmemos/first step broadband memo
DECISION MEMORANDUM JANUARY 24, 2007