20140620DecisioonMemo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:JUNE 19,2014
RE:CUSTER TELEPHONE BROADBAND SERVICES LLC’S 2013
BROADBAND EQUIPMENT TAX CREDIT APPLICATION;CASE NO.
CBT-T-14-02.
BACKGROUND
In 2001,I louse Bill 377 was enacted authorizing income tax credit for the installation of
qualit’ing broadband infrastructure in Idaho.Idaho Code §63-3029B(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 §63-30291(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 tax 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 forwarded to the Idaho Tax Commission.
THE APPLICATION
On June 10,2014,Custer Telephone Broadband Services LLC (“CTBS”or “Company”)
filed an Application seeking Commission approval of equipment for the broadband tax credit.In
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the Application,CTBS states that it installed equipment associated with Cable Modem 1-115,
Fixed Wireless 1-151 services,and fiber optic backbone and distribution cable with transmission
rates of 256 Kbps to 6 Mbps from a subscriber and 256 Kbps to 6 Mbps to a subscriber.The
Company lists broadband equipment that was installed during 2013 in the Salmon exchange.
CTBS asserts that approximately 47%of its customers in the exchange can be served by the
broadband network.During calendar year 2013,the Company invested approximately $331,500
in qualifying broadband equipment.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by CTBS and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No.28784 and Idaho Code §63-30291(3)(b).Stall also believes that the expenditures
identified by the Company,a telecommunications provider,were for equipment that is
“necessary for the provision of broadband sen’ices and an integral pan of a broadband network.”
Thus,Staff recommends that the Commission issue an Order confirming the equipment is
qualified broadband equipment and forward the approving Order along with the 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.CTB-T-14-02 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
cL Cf
‘Grace Seaman
Udmemos/ci,s-t-14-O2hIc dcc memo
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