20090824_2685.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
CO MMISSI 0 NER RED FO RD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 21, 2009
RE:COLUMBINE TELEPHONE COMPANY'S 2008 BROADBAND
EQUIPMENT TAX CREDIT APPLICATION; CASE NO. COL-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 ~ 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). 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 ~ 63-30291(4).
THE APPLICATION
On July 29, 2009, the Commission received an Application from Columbine Telephone
Co., Inc. (Columbine) seeking approval of equipment for the broadband tax credit. The
Application identifies the broadband investments made by Columbine during 2008. Columbine
states it installed equipment that provides Asymmetrical Digital Subscriber Line (ADSL),
Symmetrical Digital Subscriber Line (SDSL) and Trunk Levell (T-I) services with transmission
rates of 64 Kbps to 5 Mbps upstream and 256 Kbps to 20 Mbps downstream. The qualifying
DECISION MEMORANDUM - 1 -AUGUST 21 2009
equipment was installed in Teton County. Columbine states that it provides 2334 out of 4112
possible customers with broadband services. The Company identifies approximately $1 875 500
in qualifying broadband equipment for 2008.
ST AFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Columbine
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 also believes that ~he
expenditures identified by Columbine, 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?
d: t;;;a
i:udmemos/colt09-01.doc
DECISION MEMORANDUM - 2 -AUGUST 21 , 2009