20230410Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
LEGAL
FROM:JOHAN E.KALALA-KASANDA
MICHAEL DUVAL
DATE:APRIL 10,2023
RE:IN THE MATTER OF ALBION TELEPHONE COMPANY'S
APPLICATION FOR THE 2022 BROADBAND EQUIPMENTTAXCREDIT;CASE NO.ALB-T-23-01.
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).Idaho Code §
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 equipment "capable of transmitting signals
at a rate of at least two hundred thousand (200,000)bits per seconds to a subscriber and at least
one hundred thousand twenty-five(125,000)bits per second from a subscriber."Idaho Code §
63-3029I(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 §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.Commission Order No.35297 and Idaho Code §63-
3029I(4).Once the Commission has determinedthe installed equipment is eligible for the
broadband equipmenttax credit,an order along with the original Application is forwarded to the
Idaho Tax Commission.
DECISION MEMORANDUM -1 -APRIL 10,2023
THE APPLICATION
On February 13,2023,the Commission received an Application from Albion Telephone
Company ("Albion"or "Company"),seeking approval of the equipment for the broadband tax
credit installed during calendar year 2022.In the Application,the Company represents that the
broadband services it offers to its customers are associated with Digital Subscriber Line
("DSL"),wireless,and Fiber to the Home ("FTTH")technology.This is carried out using
Fijitsu,Adva,and Brocade as the Company's backbone network and several brands of digital
Loop carriers,includingAdtran and Calix.The Company states that these services are offered at
transmission rates of minimumrate of 25 Mbps for both upstream and downstream transmissions
with transmission speeds up to 1 Gbps.The Company represents that in 2022,as part of
upgrading its network infrastructure,it added 2.07 miles of copper and duct and 97.38 miles of
fiber cable and duct.
The Company asserts that,during 2022,it added 191 new internet customers,which
brings the total number of its customer base to 3,746 and 99%of its Idaho subscribers have
access to its broadband network.Finally,the Company states that it invested approximately
$1,861,707.43 in 2022 in qualifying broadband equipment that it confirms is integral to its
broadband network.This qualifies for a 3%broadband tax credit of $55,851.22.
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 Idaho Code §63-3029I(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.
DECISION MEMORANDUM -2 -APRIL 10,2023
COMMISSION DECISION
Does the Commission wish to issue an Order confirmingthe broadband equipment
identified in Case No.ALB-T-23-01 is qualified broadband equipment as defined in 1daho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission?
ohan E.Kalala-Kasanda
Udmemos/ALB-T-23-0 t Albion Broadband Tax Credit
DECISIONMEMORANDUM -3 -APRIL 10,2023