20060410_1506.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:APRIL 5, 2006
RE:DIRECT COMMUNICATIONS BROADBAND TAX CREDIT
APPLICATION; CASE NO. DCM-06-
BACKGROUND
On March 8 , 2006, the Commission received an Application from Direct Communications
Rockland, Inc. (Direct) 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
Direct's Application indicated it had installed central office equipment and fiber and
copper cables to provide ADSL services to Idaho customers. Direct's Application indicated its
service provides speeds of 512 000 bits per second for uploads from customers, and 8 000 000 bits
per second for downloads to customers. The Company indicated the equipment 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 three hundred thousand
dollars of investment in 2005.
DECISION MEMORANDUM APRIL 5, 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 list of proposed broadband equipment
submitted by Direct 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
Does the Commission desire to approve Direct's Application for the broadband investment
tax credit?
i:dmemos/direct 2006 broadband dm
DECISION MEMORANDUM APRIL 5 , 2006