20190104Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: JANUARY 2,2A19
RE:THE 2OI7 BROADBAI{D EQUIPMENT TAX CREDIT APPLICATION
FOR CENTURYTEL OF THE GEM STATE, INC.;
cAsE NO. CGS-T-I8-03.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income ta< credit for the installation of
qualiffing broadband infrastructure in ldaho. Idaho Code $ 63-3029B(3XaXii). In particular,
Section 53-30291allows a ta:<payer 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." Idalto Code $ 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 $ 63-30291(3xb)(i). To be eligible
for the tax credit, the taxpayer rnust obtain from the Commission an Order confirming that the
installed equipment meets the statutory definition of qualified broadband equipment. Procedural
Order No. 28784 and 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.
DECISION MEMORANDUM I JANUARY 2,2419
THE APPLICATTON
On August 31, 2018, the Commission received an Application from CenturyTel of the
Gem State,Inc. (collectively "CenturyTel" or "Compffiy"), seeking approval of the equipment
for the broadband tax credit installed during calendar year 2017. In the Application, CenturyTel
states that it installed equipment associaled with various forms of DSl-based broadband services
using a mix of fiber and metallic cable transport in the Bmneau, Grandview and Richfield
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 125,000 bits per second from a subscriber. The
Company asserts that 61Yo of its Idaho subscribers have access to the broadband network.
CenturyTel invested approximately $12,201 in 2017 in qualiffing broadband equipment that it
confirms is integral to the broadband network.
STAF'F' REVINW AND RECOMMENDATION
Staffhas reviewed and audited the list of proposed broadband equipment and believes the
identified equipment qualifies for the investment 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 qualificd broadband equipment and forward the
approving Order along with a copy of the original Application to the Idaho Tax Commission.
COMMISSTON DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. CGS-T-18-03 is qualified broadband equipment as defined in ldaho Code
$ 63-3029t(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmcmos/COS-T- I 8-03 201 7 CcnturvTcl Broadband Tax Crcdit
DECISION MEMORANDUM ,)JANUARY 2,2079