20100917Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
CO MMISSI 0 NER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:SEPTEMBER 16,2010
CENTURYTEL OF IDAHO, INC. 2009 BROADBAND EQUIPMENT TAX
CREDIT APPLICATION; CASE NO. CEN-I0-03.
RE:
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 ~ 63-30291(3)(b). Ifthe 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 September 2 2010 the Commission received an Application from CenturyTel ofldaho
Inc. (CenturyTel) seeking approval of equipment for the broadband tax credit. In the Application
CenturyTel states that it installed equipment associated with Asymmetrical Digital Subscriber Line
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(ADSL) services with transmission rates of 1 Mbps to a subscriber and 125 Kbps from a subscriber
in the Salmon exchange. CenturyTel asserts that 68% of its customers in Salmon are served or can
be served by the broadband network. The Application states that CenturyTel invested
approximately $176 800 in qualifying broadband equipment during the last six months of2009
(July 1 through December 31 , 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 ~ 63-30291(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 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. CEN-I0-03 is qualified broadband equipment as defined in Idaho Code ~ 63-30291(3)(b)(i),
and forward it to the Idaho Tax Commission?
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Grace Seaman
i: udmemos/eentel-l 0-03 bte.doe
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