20160304Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER R4PER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:MARCH 1,2016
RE:ALBION TELEPHONE COMPANY DBA ATC COMMUNICATION’S 2015
BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
CASE NO.ALB-T-16-01
BACKGROUND
In 2001,House 8111377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho.Idaho Cock §63-30298(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 §63-3029l(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 §63-30291(3)(b)(i).To be eligible for the
lax 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 -MARCH 1,2016
THE APPLICATION
On February 16,2016,Albion Telephone Company dba ATC Communications (“ATC”or
“Company”)filed an Application seeking Commission approval of equipment for the broadband tax
credit.In the Application,ATC lists the broadband investments made during calendar year 2015.
These investments were made in Butte,Cassia,Custer,and Oneida counties.ATC states that it
continued to “deploy fiber in the loop,fiber to the home (FTTH),and expanded the fiber backbone
by adding redundant rings.”During 2015,the Company “added ten miles of copper and duct and
605 miles of fiber cable and duct.”ATC states that its various broadband digital subscriber line
services (ADSL,IDSL.HDSL.and SDSL)as velI as FTTJ-I is available to 99%of its customers at
network transmission rates of 3 Mbps to 100 Mbps;much faster than the statutory requirements.
The ATC 2015 broadband investment is approximately S7.3 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-16-01 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
Grace Seaman
Udmemos/alb-E-16-OI dcc memo
DECISION MEMORANDUM -2-MARCH 1,2016