20160610Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:JUNE 10,2016
RE:CUSTER TELEPHONE BROADBAND SERVICES LLC’S 2015
BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
CASE NO.CTB-T-16-01.
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.
THE APPLICATION
On June 1,2016,the Commission received an Application from Custer Telephone
Broadband Services LLC (“CTBS”or “Company”)seeking approval of equipment for the
DECISION MEMORANDUM -I -JUNE 10,2016
broadband tax credit for calendar year 2015.In the Application,CIBS states that it installed
equipment associated with Cable Modem High Speed Internet,Fixed Wireless High Speed
Internet,and Fiber to the Home (FTTH)High Speed Internet services with transmission rates of
256 Kbps to 10 Mbps from a subscriber and 256 Kbps to 100 Mbps to a subscriber.The
Company asserts that approximately 62%of its customer base has access to the broadband
network.During 2015.CTBS invested approximately $276,600 in qualifying broadband
equipment in the Salmon exchange.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by CTBS and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No.28784 and Idaho Code §63-30291(3)(b).Stall also believes that the expenditures
identilied by the Company,a telecommunications provider is “necessary for the provision of
broadband services and an integral part of a broadband network.”Stafi 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.CTB-T-16-01 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
.h
Grace Seaman
Udrncmos!ctb—t—I 6—01 dcc memo
DECISION MEMORANDUM -2-JUNE 10,2016