20170825Decision Memo.pdf

RB:
DBCISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONOR RAPER
COMMISSIONER ANDDRSON
COMMISSION SECRETARY
LEGAL
WORKINC TILE
FROM: CAROLBE HALL
DATE: AUGUST 24,2417
ctNl"uRyrEl, or TH[, GEM STATE, rNC. rOR 2016 BROADBAND
EQUITMENT TAX CREDIT APPLICATION; CASE NO, CGS-T-I7-02.
BACKGROUND
In 2001, Llouse Bill 377 was enacted authorizing income tax crEdit for the installation of
qualifying broadband infrastructure in ldaho, tdaho Code $ 63-30298(3XaXii). In particular,
Section 63-30291 allows a taxpayer to receive an investment tax credit fbr 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) ta a subscriber and at least
125,000 bps frorn a subscriber. ldaho Cade $ 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 network." Idaho Code g 63-30291(3XbXi). To be eligible
for the tax credit, the taxpayer must obtain lrom the Cornmission an Order confirming that the
installed equipment meets the statutory definition of qualified broadband equipment. Procedural
Order No. 28784 s:nd ldaho Code $ 63-30291(4). Once the Commission as determined the
installed equipment is eligible for the broadband equipment tax credit, an order along with the
originalApplication is forwarded to the Idaho Tax Commission.
THE APPLICATION
On August 16,2017,CenturyTel of the Gem State,Inc. filed an Application seeking
Commission approval of equipment for the broadband tax credit for calendar year 2016.
CenturyTel states in the Application that it installed equiprnent associated with various forms of
IDECISION MEMORANDUM AUGUST 24,2017
DSl-based broadband services using a mix of fiber and metallic cablc transport in the Bruneau,
Crandview and Richfield exchanges. The Company provided the following details.
Transmission Rates
256kbs to 20 mbps
Investment
s 195,328
Retirements
($5,2s8)
Net Investment2
s189,070
,/rr-
66%
STAFF REVIEWS AND RECOMMENDATION
Staffhas 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
Idaha Code $ 63-30291(3)(b). Staff also believes that the expenditures identified by the
Company, a telecommunications provider, were for equipmcnt 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-17-02 is qualified broadband equipment as defined in ldaho Code $
63-30291(3Xb) and fonvard it to the Idaho Tax Commission?
ee Hall
U/Dccision Memos/Broodband Tat Crcdits/CGS-T-17-02 CenturyTel olthc Gem Stale Broodband Tax Credit
I The percentage of living units (street addresses) where the Company might send a bill and where wircline plant is
nearby. This figure represenls the o/o of rvorking qualified living units where DSL-based service could be
provisioned in a short timeframe,
2 lnvestment $195,328 minus Retirement ($6,25E) equals NET INVESTMENT $189,070
DECISION MEMORANDUM ,)AUGUST 24,2017