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requisite. See Webster's Third New International Dictionary 1510
(1986). The language in Wometco's franchise agreements does not,
as of December 31, 1985, mandate, make indispensable, or make
necessary the rebuilds in issue. Wometco's rebuilds that
occurred after December 31, 1985, and before January 1, 1991, may
reflect sound business decisions by Wometco in order to maintain
the competitiveness of its cable television systems and to
facilitate eventual renewal of the franchise agreements. As of
December 31, 1985, however, Wometco was not required by specific
contract to undertake the six rebuilds.
In interpreting the supply or service transition rule,
Wometco relies heavily on discussions that occurred on June 24,
1986, on the floor of the U.S. Senate as part of the
congressional debate over provisions of the Tax Reform Act of
1986 as follows:
Mr. FORD: * * * I simply want to make sure that
those agreements to build and rebuild cable systems
under cable franchise are treated as transition
property under the supply or service contract rule. * *
* Was it the intention of the Finance Committee to
include cable television franchise agreements within
the service and supply contract rule?
Mr. PACKWOOD: The Senator is correct. The
committee intends that cable television franchises
generally do qualify as “supply or service contracts”
for purposes of section 202(d)(3) relating to
transition rules. * * *
132 Cong. Rec. 15039 (1986).
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