20170526Decision Memo.pdf

RE:
DECISION MEMORANDI.JM
TO:COMMISSIONER KJELLAI\IDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LECAL
WORKING FILE
FROM: GRACE SEAMAN
DATE: MAY 12,2017
BLACtrffOOT TELEPHONE COOPERATM, rNC.'S 2016 BROADBAND
EQUIPMENT TAX CREDIT APPLICATION; CASE NO. BTC-T-17-01.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income ta:< medit for the installation of
quali$ing broadband infrastnrcturc in tdaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section $40291allows 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 subssriber and at least
125,000 bps from a subscriber;' Idaho Code $ 63-3029I(3)(b). If the equipment is installed by a
telecommunications carrier, it must also be "necessaqr to the provision of broadband services
and an integral part of a broadband network." ldaho Code $ 63-3029(3)(bxi). To be eligible
for the tax cr€dit, the taxpayer must obtain ftom the Commission an Order confirming that the
installed equipment meets the statutory definition of qualified broadband equipment. Procedural
OrderNo. 28784 arrd 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 fonrarded to Ore ldaho Tax Commission.
THE APPLICATION
On April 3,2017 the Commission received an Apptication from Blackfoot Telephone
Cooperative, Inc. ("Blackfoot" or "Company'') seeking approval of equipment for the broadband
ta:r credit for calendar year 2016. In the Application, Blackfoot states that it installed equipment
IDECISION MEMORANDUM MAY t2,2017
associated with Asymmetric Digital Subscriber Line (ADSL) and Ethernet broadband services
(using 18k non-loaded copper distribution, fiber optic backbone and distribution cable). The
network is capable of providing transmission speeds of 256 Kbps to I Mbps from a subscriber
and 768 Kbps to I Mbps to a subscriber. The Company states that no customers currently has
broadband services. Fremont invested approximately $20,000 in broadband equipment during
2016.
STAF REVIEW AND RECOMMENDATION
$taff has reviewed the list of proposed broadband equipment submitted by Blackfoot and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No. 28784 and ldaho Code $ 63-30291(3Xb). Staff also believes that the expenditures
identihed by the Company, a telecommunications provider is "necessary for the provision of
broadband sewices and an integral part of a broadband network." See A. Seltzer E-Mail,
May 5, 2017. Stafl 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. BTC-T-17-01 is qualified broadband equipment as defined in ldaho Code $ 63-30291(3)0),
and forward it to the Idaho Tax Commission?
tt
Grace Seaman
Udmcmos/btc.t.l 7.01 dcc mcmo
2DECISION MEMORANDUM MAY 12,20t7