20210108Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DANIEL KLEIN
DATE:JANUARY 7,2021
RE:THE 2019 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR CENTURYTEL OF THE GEM STATE,INC.;
CASE NO.CGS-T-20-04.
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 §63-329I(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 -I -JANUARY 7,2021
THE APPLICATION
On December 3,2020,the Commission received an Application from CenturyTel of the
Gem State,Inc.(collectively “CenturyTel”or “Company”),seeking approval of the equipment
for the broadband tax credit installed during calendar year 2019.In the Application,CenturyTel
states 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 Grasmere-Riddle
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 59%of its Idaho subscribers have access to the broadband network.
CenturyTel invested approximately $71,713 in 2019 in qualifying broadband equipment that it
confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff has 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 Idaho Code §63-30291(3)(b).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-20-04 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward it to the Idaho Tax Commission?
Daniel Klein
Udnwnios/CGS-T-20-01 2019 CencuryTci of the Gem Stale Broadband Tax Credit
DECISION MEMORANDUM -2-JANUARY 7,2021