20090522Decision Memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KEMPTON
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER RED FORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:MAY 22, 2009
RE:ALBION TELEPHONE COMPANY'S 2008 BROADBAND EQUIPMENT
TAX CREDIT APPLICATION; CASE NO. ALB-09-01.
BACKGROUND
In 2001 , House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code ~ 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 ~ 63-3029I(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 ~ 63-30291(4).
THE APPLICATION
On May 4 2009, 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 2008
in the Idaho counties of Butte, Cassia, Custer, and Oneida. A TC indicated that during 2008 , the
Company added 38 miles of copper and 42 miles of fiber cable; installed Fujitsu fiber terminals
for backhaul and several brands of Digital Loop Carriers. A TC stated it provides ADSL, IDSL
DECISION MEMORANDUM - 1 -MAY 22, 2009
HDSL, and SDSL services to its customers at network transmission rates of256 Kbps to 6 Mbps.
A TC reported that it added the capacity to provide broadband service to 173 new customers in
2008, bringing the total number to 1 665 customers. The A TC 2008 broadband investment is
approximately $2 200 000.
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 ~ 63-3029I(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 of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to accept ATC's Application for the broadband equipment
tax credit?
ffiL~
~~~
Grace Seaman
GS:udmemos/ATC 2008 BTC dec memo
DECISION MEMORANDUM - 2 -MAY 22, 2009