20080512_2234.pdf

DECISION MEMORANDUM
TO:COMMISSIONER REDFORD
COMMISSIONER SMITH
CO MMISSI 0 NER KEMPTON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:MAY 8, 2008
RE:ALBION TELEPHONE COMPANY, DBA ATC
COMMUNICATIONS 2007 BROADBAND EQUIPMENT TAX
CREDIT; CASE NO. ALB-08-01.
BACKGROUND
In 2001 , House Bill 377 was enacted authorizing income tax credit for the
installation of qualifying broadband infrastructure in Idaho. Idaho Code 9 63-
3029B(3)(a)(ii). In particular, Section 63-30291 allows a taxpayer to receive an
investment tax credit for eligible broadband equipment installed during a calendar year.
Qualified broadband equipment" is defined as those network facilities capable of
transmitting signals at a rate of at least 200 000 bits per seconds (bps) to a subscriber and
at least 125 000 bps from a subscriber. Idaho Code 9 63-30291(3)(b). To be eligible for
the broadband equipment tax credit, the taxpayer must obtain from the Commission an
Order confirming that installed equipment qualifies for capital investment credit.
Procedural Order No. 28784 and Idaho Code 9 63-30291(4).
DISCUSSION
On March 21 , 2008, the Commission received an Application from Albion
Telephone Company, dba A TC Communications (A TC), seeking approval of equipment
for the broadband tax credit. ATC's Application lists the broadband investments made
during calendar year 2007 in the Idaho counties of Ada, Bingham, Butte, Cassia, Custer
Jefferson, and Oneida. A TC indicated that during 2007, the Company added 31 miles of
copper and 4 miles of fiber cable; installed Tekelec soft switch equipment enabling A TC
DECISION MEMORANDUM MAY 8 , 2008
to offer the next generation of switching; and, continued to deploy a High Speed Wireless
System in a neighboring exchange. A TC stated it provides ADSL, IDSL, HDSL, and
SDSL services to its customers at network transmission rates of256 000 bps to 3 000 000
bps. A TC reported that it added the capacity to provide broadband service to 567 new
customers in 2007, bringing the total number to 1 492 customers. The ATC 2007
broadband investment is approximately $2 700 000.
ST AFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by A TC
and believes that it qualifies for the investment tax credit pursuant to Procedural Order
No. 28784 and Idaho Code 9 63-30291(3)(b). Further, Staff believes that the
expenditures indentified by A TC, a telecommunications provider, were for equipment
that is "necessary for the provision of broadband services and an integral part of a
broadband network." Staff, therefore, recommends acceptance of the Application and
further recommends that the Commission forward the approving Order along with a copy
ofthe original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to accept A TC' s Application for the broadband
investment tax credit?
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GS:udmemos/ATC 207 BTC
DECISION MEMORANDUM MAY 8 , 2008