20090918Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:SEPTEMBER 17, 2009
RE:CENTURYTEL OF IDAHO'S BROADBAND EQUIPMENT TAX CREDIT
APPLICATION FOR FIRST HALF OF 2009; CASE NO. CEN- T -09-
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). 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 ~ 63-3029I(3)(b). To be eligible for the broadband
equipment tax credit, the taxpayer must obtain from the Commission an Order confirming that
installed equipment qualifies for capital investment credit. Procedural Order No. 28784 and
Idaho Code ~ 63-30291(4).
THE APPLI CA TI 0
On September 11 2009, the Commission received an Application from CenturyTel of
Idaho, Inc. (CenturyTel) seeking approval of equipment for the broadband tax credit. The
Application identifies the broadband investments made by CenturyTel for the six months ending
on June 30, 2009. CenturyTel states it installed equipment that provides Asymmetric Digital
Subscriber Line (ADSL) service with transmission rates of 1 Mbps to a subscriber and 128 Kbps
from a subscriber. The qualifying equipment was installed in the Salmon exchange. CenturyTel
asserts that 3,420 or 68% of its Idaho customers have access to broadband services. The
DECISION MEMORANDUM - 1 -SEPTEMBER 17, 2009
Company identifies approximately $31 200 in qualifying broadband equipment for the first six
months of 2009.
ST AFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by CenturyTel
and believes the identified equipment qualifies for the investment tax credit pursuant to
Procedural Order No. 28784 and Idaho Code ~ 63-3029I(3)(b). Staff also believes that the
expenditures identified by CenturyTel, a telecommunications provider, were for equipment that
is "necessary for the provision of broadband services and an integral part of a broadband
network." Staff, therefore, recommends acceptance ofthe Application and further recommends
that the Commission forward the approving Order along with a copy of the original Application
to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to accept the Application for the broadband investment tax
credit?
d: ~U
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race Seaman
i:udmemos/centO9-02.doc
DECISION MEMORANDUM - 2 -SEPTEMBER 17, 2009