20170825Decision Memo.pdf

RE:
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONBR RAPBR
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LECAL
WORKING NLE
FROM: CAROLEE HALL
DATE: AUGUST 24,2017
CENTURYTEL OF IDAHO, INC. FOR 2016 BROADBAND EQUIPMENT
TAx CREDIT APPLICATION; CASE NO. CEN-T-17-02.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code $ 63-30298(3XaXii). 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 $ 63-3291(3Xb), 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 nstwork," ldaho Code $ 63-30291(3)(bxi). 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 ldaho Code $ fi-3029\4), Once the Commission as determined the
installed equipment is eligible for the broadband equipment tax credit, an order along wi& the
original Application is forwarded to the ldaho Tax Commission.
THtr APPLICATION
On August 16,2017, CenturyTelof ldaho,lnc. filed an Application seeking Commission
approval of equipment for the broadband tax credit for calendar year 2015. CenturyTel states in
the Application that it installed equipment associated with various forms of DSl--based
DECISION MEMORANDUM AUGUST 24,2017-l-
broadband services using a mix of fiber and metallic cable transport in the Leadore and Salmon
exchanges. The Company provided the following details.
Transmjssion Rates
255kbs to 7 Mbps
Investment Retirements
$69,010 ($0)
Net Investmentz
$69,010
o/rt
91%
STAFF REVIEWS AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment and believes the itemized
expenses, qualifies for the investment tax credit pursuant to Procedural Order No. 28784 and
Idaho Code $ $4A29\3Xb). Staffalso bclievcs 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 Tot Commission.
COMMISSION DECISTON
Does the Comrnission wish to issue an Order confirming the equipment identified in Case
No. CEN-T-17-02 is qualified broadband equipment as defined in ldaho Code $ 63-30291(3Xb)
and forward it to the ldaho Tax Commission?
U/Decision Memo$Broadband Tux CrcditVCEN-T- l 7-02 CcnturyTel of ldaho Broadband Ta.x Cre dit
I The pcrcentage of living units (street addresses) where the Company might send a bill and where wireline plant is
nearby. This figure represents the 96 of working qualified living units where DSl-based service could be
provisioned in a short timeframe.
2 lnvestment S69,010 minus Retirement ($00) equals NET INVESTMENT $69,010
DECISION MEMORANDUM .2. AUGUST 24,241?
Hall