20190104Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
f,.ROM: DAI\IEL KLEIN
DATE: JANUARY 2,2A19
RE:TIIE 2017 BROADBAI\D DQUIPMENT TAX CREDIT APPLICATION
FOR CENTURYTEL OF IDAHO,INC.; CASE NO, CEN-T-18-04.
BACKGROUNI)
ln 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in ldaho. Idaho Code $ 63-30298(3)(aXii). In particular,
Section 63-3029I allows a taxpayer to receive an investment ta:r credit for eligible broadband
equipment installed during a calendar year.
Qualified broadband equipment is defined as'othose network facilities capable of
hansmitting 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 $ 63-329I(3)(b). If the equipment is installed by a
telecornmunications carrier, it rnust also be "necessary to the provision of broadband services
and an integral part of a broadband network." Idaho Code $ 63-30291(3)(b)(D. 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 $ 63-3029I(4). Once the Commission as determined the
installed equipment is eligible for the broadband equipment tax credit, an order along with the
original Application is forwarded to the ldaho Tax Commission.
DECISION MEMORANDUM I JANUARY 2,2019
THE APPLICATION
On August 3l,20l8,the Comrnission received an Application from CenturyTel of Idaho,
lnc. (collectively "CenturyTel" or "Compily"), seeking approval of the equipment for the
broadband tax credit installed during calendar year ZAfi, In the Application, CenturyTel states
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 and Salmon exchanges. CenturyTel
discloses that its broadband network has data transmission rates of 256 Kbps and higher for
subscriber downloads and uploads, which exceeds the required rates of 200,000 bits per second
to a subscriber and I25,000 bits per second from a subscriber. The Company asserts that 85% of
its Idaho subscribers have access to the broadband network. CenturyTel invested approximately
$802,449 in 2017 in quali$ing broadband equipment that it conlirms is integral to the broadband
network
STAFF' REVIEW AND RECOMMENDATION
Staffhas reviewed and audited the list of proposed broadband equipment and believes the
identified equipment qualifies for the investnent tax credit pursuant to Procedural Order
No. 28784 and ldaho Code $ 63-30291(3)(b). 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-18-04 is qualified broadband equipment as defined n ldaho Code
$ 63-3029I(3Xb) and forward it to the Idaho Tax Cornmission?
,L
Daniel Klein
UdmemodCEN-T-18-04 2017 CenturyTel Broadband Tax Credit
DECISION MEMORANDUM -2-JANUARY 2,2019
Ii-'/ I/eJ