20151002Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:OCTOBER 1,2015
RE:CENTURYTEL OF THE GEM STATE,INC.DBA CENTURYLINK’S 2014
BROADBAND EQUIPMENT TAX CREDIT APPLICATION;CASE NO.
CGS-T-I 5-05.
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.2g784 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 September 9,2015,CenturyTel of the Gem State,Inc.dba CenturyLink
(“CenturyLink”or “Company”)filed an Application with the Commission seeking approval of
DECISION MEMORANDUM -I -OCTOBER 1,2015
equipment for the broadband tax credit for calendar year 2014.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 Bruneau,Grandview and
Richfield exchanges.The Company provided the following details:
Year Transmission Rates %I Investment Retirements Net Investment
2014 256 Kbps—2OMbps 67%$89,351 (S1,165)$88,186
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 Cock’§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.CGS-T-lS-05 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b)
and fonvard it to the Idaho Tax Commission?
&Lc
‘Grce Seaman
Udmemoslcgs-c-l5.O5bcc dcc memo
The percentage of living units (street addresses)where the Company might send a bill and where wireline plant is
aearby.This figure represents the %of working qualified living units where DSL-based service could be
provisioned in a short timeframe.
DECISION MEMORANDUM -2-OCTOBER 1,2015