20140829Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 28,2014
RE:CENTURYTEL OF IDAHO,INC.DBA CENTURYLINK’S BROADBAND
EQUIPMENT TAX CREDIT APPLICATION FOR 2012 AND 2013;CASE
NO.CEN-T-14-04.
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).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 August 26,2014,CenturyTel of Idaho,Inc.dba CenturyLink (“CenturyLink”or
“Company”)filed an Application with the Commission seeking approval of equipment for the
DECISION MEMORANDUM -1 -AUGUST 28,2014
broadband tax credit for 2012 and 2013.CenturyLink states in the Application that it installed
equipment associated with various forms of DSL-based broadband services (using a mix of fiber
and metallic cable transport)in the Leadore,North Fork,and Salmon exchanges.The Company
provided the following details:
Year Transmission Rates Investment Retirements Net Investment
2012 256 Kbps—4OMbps 94%$516,821 ($3,830)$512,991
2013 256 Kbps—4OMbps 90%$130,479 ($22,030)$108,449
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment 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 the
Company,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-T-14-04 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b)
and forward it to the Idaho Tax Commission?
/7
h
Grace Seaman
i:udmemoslcen-t-14-O4blc
The percentage of living units (street addresses)where the Company might send a bill and where wireline plant is
nearby.This figure represents the %of working qualified living units where DSL-based service could be
provisioned in a short timeframe.
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