BELL ATLANTIC lost a dispute in federal district court last month over investment tax credits. Congress repealed the investment credit at the end of 1985. Many utilities have looked at whether they might still claim credits on equipment placed in service as late as 1990 under a transition rule that allowed credits on assets the utility needed to perform an existing “service or supply contract.” The assets had to be “readily identifiable” in the contract. An example of readily identifiable assets is where an independent power company signed a power contract to sell electricity from a project the IPP planned to build. Bell Atlantic argued that its franchise was such a contract because it had an obligation to serve customers. It also pointed to contracts with other telephone companies to interconnect. The court disagreed. It said the franchises and agreements with other telephone companies were not the sort of contracts that Congress had in mind and, in any event, the equipment Bell Atlantic purchased was not “readily identifiable” in these documents. To allow such an expansive interpretation, the court said, would require the court to find that Congress “intended to permit every utility to claim the ITC for … [its] routine business expenditures.” Bell Atlantic pointed to a statement by Senator Packwood — chairman of the Senate Finance Committee — during floor debate when the investment credit was repealed that cable television companies could qualify for relief based on their franchises. The court said this was different because “cable television providers are not regulated in the same manner as other utilities and Congress specifically chose to deal with [them] separately.”