20180413Decision Memo.pdf

RE:
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: APRIL 12,2018
CITIZENS TELECOMMUNICATIONS COMPANY OF IDAHO DBA
FRONTIER COMMUNICATIONS OF IDAHO APPLICATION FOR THE
BROADBAND EQUIPMENT TAX CREDIT FOR 20t6;
CASE NO. CTC-T.IE.OI.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in ldaho. Idaho Code $ 63-3029B(3Xa)(ii). In particular,
Section $-302il 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 $ 63-3291(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 $ 63-3029(3)(bxi). 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 ldaho Code $ 63-30291(4). Once the Commission as determined the
installed equipment is eligible for the broadband equipment tar< credit, an order along with the
original Application is forwarded to the ldaho Tax Commission.
DECISION MEMORANDUM -t-APRTL 12,2OI8
THE APPLICATION
On January 18,2018, the Commission received an Application from Citizens
Telecommunications Company of Idaho d/b/a Frontier Communications of Idatro. ("Fronlier" or
"Company"), seeking approval of the equipment for the broadband tax credit installed during
calendar year 2017. In the Application, Frontier states that it made certain investrnents that
constitute "qualified broadband equipment", Frontier discloses that it installed equipment
associated with Asymmetrical Digital Subscriber Line ("ADSL") services with transmission
rates up to 640 Kbps "send" and 6 Mbps "receive" in 9 exchanges, which meets the required
rates of 200,000 bits per second to a subscriber and 125,000 bits per second from a subscriber.
The Company asserts thatSTVo of its ldaho subscribers have access to the broadband network.
Frontier invested approximately $545,3?2in2016 in qualifuing broadband equipment that it
confirms is integral to the broadband netrryork
STAF'F REVIEW AND RECOMIVIENDATION
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 $ 63-3029(3)(b). Staff, therefore, recommends that the Commission
issue an Order confirming the equipmenl 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. CTC-T-18-01 is qualified broadband equipment as defined in ldaho Code g
63-30291(3Xb) and forward it to the ldaho Tax Commission?
Daniel Klein
Udmcmos/CTC-T-18-01 20t6 Fronticr Brosdbud Tox Crcdit dcc mcmo
DECISION MEMORANDUM 1 APRIL I2,20I8