20090824_2682.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 21 , 2009
RE:CENTURYTEL OF IDAHO'S 2008 BROADBAND EQUIPMENT TAX
CREDIT APPLICATION; CASE NO. CEN- T -09-01.
BACKGROUND
In 2001 , House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code g 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 g 63-3029I(3)(b). To be eligible for the broadband
equipment tax credit, the taxpayer must obtain from the Commission an Order confirming that
installed equipment qualifies for capital investment credit. Procedural Order No. 28784 and
Idaho Code g 63-30291(4).
THE APPLICATION
On July 23 , 2009, the Commission received an Application from CenturyTel ofIdaho
Inc. (CenturyTel) seeking approval of equipment for the broadband tax credit. The Application
identifies the broadband investments made by CenturyTel during 2008. CenturyTel states it
installed equipment that provides Asymmetric Digital Subscriber Line (ADSL) service with
transmission rates of 1 Mbps to a subscriber and 128 Kbps from a subscriber. The qualifying
equipment was installed in Leadore, Salmon, and North Fork exchanges. CenturyTel asserts
DECISION MEMORANDUM - 1 -AUGUST 21 , 2009
that 3 444 or 66% of its Idaho customers have access to broadband services. The Company
identifies approximately $225 000 in qualifying broadband equipment for 2008.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by CenturyTel
and believes the identified equipment qualifies for the investment tax credit pursuant to
Procedural Order No. 28784 and Idaho Code g 63-3029I(3)(b). Staff also believes that the
expenditures identified by CenturyTel, a telecommunications provider, were for equipment that
is "necessary for the provision of broadband services and an integral part of a broadband
network." Staff, therefore, recommends acceptance of the Application and further recommends
that the Commission forward the approving Order along with a copy of the original Application
to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to accept the Application for the broadband investment tax
credit?
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i:udmemos/centO9-01.doc
DECISION MEMORANDUM - 2 -AUGUST 21 , 2009