20170609Decision Memo.pdf

DECISION MEMORANDI'M
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: GRACE SEAMAN
DATEI JIrNE 6,,2017
RE:CUSTER TELEPHONE BROADBAND SERVICES LLC'S 2016
BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
cAsE No. CTB-T-17-01.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income ta:r credit for the installation of
qualiSing broadband infrastructure in ldaho. Idaho Code $ 63-30298(3)(a)(ii). In particular,
Section 63-3}2glaltows a to(payer to receive an investment tax credit for eligible broadband
equipment instalted 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)ft). If the equipment is installed by a
telecommunications carrier, it must also bc "necessary to the provision of broadband services
and an integral part of a broadband network." Idaho Code $ 63-30291(3XbXi). To be eligible
for the ta,r credit" the ta:rpayer must obtain from the Commission an Order confirming that the
installed equipment meets the statutory definition of qualified broadband equipment. Procedural
OrderNo. 28784 and ldaho Code $ 63-30291(4). Once the Commission has determined the
installed equipment is eligible for the broadband equipment toc credit, an order along with the
original Application is forwarded to the ldaho Tax Commission.
THE APPLICATION
On May 24,2017, the Commission received an Application from Custer Telephone
Broadband Services LLC (*CTBS" or "Company") seeking approval of equipment for the
DECISION MEMORANDUM JUNE 6,2017
broadband tax credit for calendar year 2016. tn the Application, CTBS states that it installed
equipment associated with Cable Modem High Speed Interne! Fixed Wireless High Speed
Internet, and Cable Television (CAW) services with transmission rates of 256 Kbps to l0 Mbps
from a subsuiber and 256 Kbps to 100 Mbps to a subscriber. The Company asserts that
approximately 670/o of its customer base has access to the broadband network. During 2016,
CTBS invested approximately $945,700 in qualiffing broadband equipment in the Salmon
exchange.
STAFF REVIEW AND RECOMMENDATION
Staffhas 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 ldaho Code $ 63-3029(3)O). Statralso believes that the expenditures
identified by the Company, a telecommunications provider, is "necessary for the provision of
broadband services and an integral part of a broadband network." ,See T, Westergard E-Mail,
June 6, 2017. 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 ldaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. CTB-T-17-01 is qualified broadband equipment as defined in Idaho Code $ 63-3029I(3Xb),
and fonpard it to the ldaho Tax Commission?
&
Grace Seaman
Udmcmos/ctb-t.17-0 I dcc mcmo
2DECISION MEMORANDUM JUNE 6,2017