20220218Decision Memo.pdf

RE
DECISION MEMORANDUM
TO COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOHAN E. KALALA.KASANDA
RILEY NEWTON
DATE: FEBRUARY 17,2022
TIJE2O?I BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR ALBION TELEPHONE COMPANY, CASE NO. ALB-T-22-01.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in Idaho. Idaho Code $ 63-30298(3)(a)(ii). 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 (bps) to a subscriber and at least
125,000 bps from a subscriber;' Idaho Code $ 63-329I(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." Idqho Code $ 63-3029I(3XbXi). 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.
Commission OrderNo. 35297 ard ldaho 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 forwarded to the Idaho Tax Commission.
IDECISION MEMORANDUM FEBRUARY 17,2022
THE APPLICATION
On January 20,2022, the Commission received an Application from Albion Telephone
Company. ("Albion" or'oCompany"), seeking approval of the equipment for the broadband tax
credit installed during calendar year 2021. In the Application and in the follow up inquiries from
Staff, Albion discloses that its broadband network has data transmission rates at a minimum rate
of 6 Mbps for few customers who are on old, grandfathered plan. However, the Company is
planning on doing away with that speed, in the next couple of months, and upgrade customers to
the minimum rate of 25 Mbps for both upstream and downstream transmissions with
transmission speeds up to I Gbps. This rate is above the statutory speed requirements pursuant
to ldaho Code $ 63-30291. The Company asserts that99o/o of its Idaho subscribers have access
to the broadband network. Albion invested approximately $1,864,460 in 2021 inqualifuing
broadband equipment that it confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed and audited the list of proposed broadband equipment and believes the
identified equipment qualifies for the investment tax credit pursuant to Procedural Order
No. 35297 and ldaho Code $ 63-30291(3)(b). 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-22-01is qualified broadband equipment as defined in ldaho Code $ 63-3029I(3Xb)
and forward it to the Idaho Tax Commission?
Kalala-Kasanda
Udmemos/AlB-T-22-01 Albion Broadband Tax Credit
DECISION MEMORANDUM -2-
J
FEBRUARY 17 ,2022