20221220Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOHAN E.KALALA-KASANDA
CLAIRE SHARP
DATE:DECEMBER 20,2022
RE:IN THE MATTER OF CENTURYTEL OF IDAHO,INC'S APPLICATION
FOR APPROVAL OF THE IDAHO BROADBAND EQUIPMENTTAX
CREDIT FOR THE YEAR 2021;CASE NO.CEN-T-22-04.
BACKGROUND
In 2001,House Bill 377 was enacted authorizing income tax credit for the installation of
qualifyingbroadband infrastructure in Idaho.Idaho Code §63-3029B(3)(a)(ii).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 second to a subscriber and at least
125,000 bits per second from a subscriber.Idaho Code §63-3029I(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-
3029I(3)(b)(i).To be eligible for the tax credit,the taxpayermust obtain from the Idaho Public
Utilities Commission ("Commission")an order confirmingthat the installed equipment meets
the statutory definitionof qualified broadband equipment.Order No.35297;Idaho Code §63-
3029I(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 State Tax Commission.
DECISION MEMORANDUM -1 -DECEMBER 20,2022
THE APPLICATION
On November 28,2022,the Commission received an Application from CenturyTel of
Idaho,Inc.("Company"),seeking Commission determination that the broadband equipment
installed during the calendar year 2021 meets the statutory definition of qualified broadband
equipment.
In the Application,the Company represents that it uses terrestrial wireline technology and
has installed broadband equipment associated with various forms of Digital Subscriber Line
(DSL)based equipment,including Asymmetric Digital Subscriber Line (ADSL)and Very-High-
Bit -Rate Digital Subscriber Line (VDSL)in various vintages.Data transportation is a mixture
of fiber optic and metallic cable,which typically is also supporting traditional telephony
services.The equipment terminals are located in central office buildings,remote buildings,and
in cabinets on concrete pads each serving a neighborhood.The Company discloses that the
lowest broadband network data transmission rate offered to customers is 500,000 bits per second
for downloads and 250,000 bits per second for uploads.The Company states that these rates
exceed the minimum statutory speed requirements under Idaho Code §63-30291.The Company
also represents that it has 5,349 potential Idaho customers that it could provide broadband
service out of a total of 5,709.This represents 94 percent of the number of potential subscribers
within its designated service areas.The Company states that it invested $263,366 in 2021 in
qualifying broadband equipment that it confirms is integral to its broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff examined the list of the proposed broadband equipment,and Staff believes the
equipment qualifies for the investment tax credit.Staff recommends that the Commission issue
an order confirming the listed equipment is qualified broadband equipment,and forward that
order along with a copy of the Application to the Idaho State Tax Commission.
DECISION MEMORANDUM -2 -DECEMBER 20,2022
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No.CEN-T-22-04 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b),
and forward the order and a copy of the Application to the Idaho State Tax Commission?
J han E.Kalala-Kasanda
Udmemos/CEN-T22-04 Decision Memo
DECISIONMEMORANDUM -3 -DECEMBER 20,2022