20170526Decision Memo.pdf

RE:
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DECISION MEMORANDT'M
TOI COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARV
LEGAL
WORKING FILE
FROM: GRACE SEAMAN
DATE: MAY 17,2017
ALBION TELEPHONE COMPANY DBA ATC COMMUNICATION'S 2016
BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
cAsE NO. ALB-T-17-01.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tar< credit for the installation of
qualiffing broadband infrastmcture in Idaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section 63-30291allows 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 @ps) to a subscriber and at least
125,000 bps from a subscriber;' Idaho Cade $ 63-3029(3Xb). 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 $ 63-3029(3XbXi). To be eligible for the
tax credit, the taxpayer must obtain from the Commission an Order confirming that the installed
equipment mects the statutory definition of qualified broadband equipment. Procedural Order No
28784 and ldaho Code 5 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 fonrarded to the ldaho Tax Commission.
IDECISION MEMORANDUM MAY t7,20t7
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THE APPLICATION
On February l3,z0l7,Albion Telephonc Company dba ATC Communications f'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 2016.
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 (FTTI|, and expanded the hber backbone
by adding redundant rings." During 20l6,the Company "added seven miles of copper and duct and
402 miles of fiber cable and duct." ATC states that its various broadband digital subscriber line
services (ADSL and SDSL) and Fiber to the Home (FTTH) is available ta 99ah of its customers at
network transmission rates of 3Mbps to I Gbps; much faster than the statutory requirements. The
ATC 2016 broadband investment is approximately $6 million.
STAtr'F REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by ATC and
believes the identified equipment qualifies for the investment ta:r credit pursuant to Procedural
Order No. 28784 and ldaho Code $ 63-3029(3)(b). Staff also betieves 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." ,See R.
Redman E-Mail, May 5, 2017. 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-17-01 is qualified broadband equipment as defined in ldaho Code $ 63-3029I(3Xb),
and forward it to the Idaho Tax Commission?
a
Udmcmos/olb-t-l 7.01 dcc mcmo
2DECISION MEMORANDUM
Seaman
MAY 17,2017