20150410Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:APRIL 8,2015
RE:ALBION TELEPHONE COMPANY DBA ATC COMMUNICATION’S
2014 BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
CASE NO.ALB-T-15-01.
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 §63-30291(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 pan of a broadband network.”Idaho Code §63-30291(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 §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 fonvarded to the Idaho Tax Commission.
DECISION MEMORANDUM -1 -APRIL 8,2015
THE APPLICATION
On February 3,2015,Albion Telephone Company dba ATC Communications (“ATC”or
“Company”)tiled an Application seeking Commission approval of equipment for the broadband
tax credit.In the Application,ATC lists the broadband investments made during calendar
year 2014.These investments were made in Butte,Cassia,Custer,and Oneida counties.ATC
states that it continued to “deploy fiber in the loop,install Digital Loop Carrier systems with
12,000-foot loops and develop a fiber backbone that will have the ability to handle huge amounts
of data.”During 2014,the Company “added ten miles of copper and duct and 149 miles of fiber
cable and duct.”ATC states that it provides various subscriber line services (ADSL,IDSL,
HDSL,and SDSL)to its customers at network transmission rates of 1.5 Mbps to 20 Mbps and
the service is available to 99%of its customers.The ATC 2014 broadband investment is
approximately $3 .454 million.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by ATC and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No.28784 and Idaho Code §63-30291(3)(b).Staff also believes that the expenditures
identified by the Company,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 that the Commission issue an Order confirming the equipment is
qualified broadband equipment and 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-T-15-01 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
I
•/jL&1L1aL
Orace Seaman
I udmemos/alc 2014 btc dcc memo
DECISION MEMORANDUM -2-APRIL 8,2015