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 THE GEM STATE,INC.DBA
CENTURYLINK’S BROADBAND EQUIPMENT TAX CREDIT
APPLICATION FOR 2012 AND 2013;CASE NO.CGS-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.
DECISION MEMORANDUM 1 AUGUST 28,2014
THE APPLICATION
On August 26,2014,CenturyTel of the Gem State,Inc.dba CenturyLink
(“CenturyLink”or “Company”)filed an Application with the Commission seeking
approval of equipment for the 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
Grandview and Grasmere-Riddle exchanges.The Company provided the following
details:
Year Transmission Rates %l Investment Retirements Net Investment
2012 256 Kbps—4OMbps 73%$21,833 0 $21,833
2013 256 Kbps—4OMbps 68%$179,041 (S697)$178,344
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by
CenturyLink 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 fonvard the approving Order along with a copy of the original Application to the
Idaho Tax Commission.
The percentage of living units (street addresses)where the Company might send a bill and where wireline
plant is nearby.This figure represents the ¼of working qualified living units where DSL-based service
could be provisioned in a short timeframe.
DECISION MEMORANDUM 2 AUGUST 28,2014
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified
in Case No.CGS-T-14-04 is qualified broadband equipment as defined in Idaho Code §
63-30291(3)(b)and fonvard it to the Idaho Tax Commission?
(C (.,
Grace Seaman
i:udmemos/cgs-t-14-O4btc
DECISION MEMORANDUM 3 AUGUST 28,2014