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HomeMy WebLinkAbout20100503Decision Memo.pdfDECISION MEMORANDUM TO:COMMISSIONER KEMPTON COMMISSIONER SMITH COMMISSIONER REDFORD COMMISSION SECRETARY LEG AL WORKING FILE FROM:GRACE SEAMAN DATE:APRIL 28, 2010 RE:ALBION TELEPHONE COMPANY'S 2009 BROADBAND EQUIPMENT TAX CREDIT APPLICATION; CASE NO. ALB-I0-01. 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 963-3029I(3)(b). If the equipment is installed by a telecommunications carrier, it must also be "necessary to the provision of broadband services and an integral part of a broadband network.Idaho Code 9 63-3029I(3)(b)(i). To be eligible for the tax credit, the taxpayer must obtain from the Commission an Order confirming that the installed equipment meets the statutory definition of qualified broadband equipment. Procedural Order No. 28784 and Idaho Code 9 63-30291(4). Once the Commission has determined the installed equipment is eligible for the broadband equipment tax credit, an order along with the original Application is forwarded to the Idaho Tax Commission. THE APPLICATION On March 3 , 2010, the Commission received an Application from Albion Telephone Company dba A TC Communications (A TC) seeking approval of equipment for the broadband DECISION MEMORANDUM - 1 -APRIL 28 2010 tax credit. In the Application, A TC lists the broadband investments made during calendar year 2009 in the Idaho counties of Butte, Cassia, Custer, and Oneida. A TC indicates that during 2009, the Company added 19 miles of copper and 21 miles of fiber cable; installed Fujitsu fiber terminals for backhaul and several brands of Digital Loop Carriers including AFC, Telstrat, SRS Adtran, and Calix. A TC states it provides various subscriber line services (ADSL, IDSL, HDSL and SDSL) to its customers at network transmission rates of 256 Kbps to 6 Mbps. A TC reports that it added the capacity to provide broadband service to 162 new customers in 2009. The A 2009 broadband investment is approximately $820 000. ST AFF REVIEW AND RECOMMENDATION Staff has reviewed the list of pr~posed 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 63-3029I(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 issue an order confirming the equipment identified in Case No. ALB-I0-0l is qualified broadband equipment as defined in Idaho Code 9 63-3029I(3)(b)(i), and forward it to the Idaho Tax Commission? (LU' ttU~LaA/L- Grace Seaman udmemosl Albion 2009 Broadband Tax Credit dec memo DECISION MEMORANDUM - 2 -APRIL 28 2010