20200831Decision Memo.pdf

TO
FROM:
DATE:
DECISION MEMORANDUM
COMII{ISSIONER KTELLANDER
COMhIISSIONBR RAPER
COMIT{ISSIONER ANDERSON
COMII&SSION SECRETARY
LEGAL
WOtrKING FILE
DAMTL KLEIN
AUCUST n,2020
RE:cusTER TELEPHONE COOPERATIVE, rNC'S 2019 BROADBAND
EQIIIPMENT TAX CREDIT; CASE NO. CUS-T-20-01.
BACKGROUND
In 2fi)1, Hou$e Bill377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in ldaho. ldaho Code * 63-30298(3XaXii). In particular,
Section 63-3029t allows a taxpayer to receive an investment urx 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,m0 bps from a subscriber;' Idaho Cade I63-329(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 * 63-30291(3XbXi). 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 i 6t-3O291(4). Once the Commission as determined the
installed equipment is eligible for the broadband equipment tax credit, an order along with the
original Application is forwarded to the ldaho Tax Commission.
DECISION MEMORANDUM AUGUST 27,2020
THE APPLICATION
On August 13,2020, the Commission received an Application from Custer Telephone
Cooperative, Inc. ("Custer Telephone" or "Company"), seeking approval of the equipment for
the broadband tax credit installed during calendar year 2019. In the Application, Custer
Telephone states that it installed broadband equipment associated with Fiber to the Home
([TTH) and Asymmetrical Digital Subscriber Line (ADSL). Custer Telephone discloses that its
broadband network has data transmission rates of 256,000 to 10,(X)0,000 bits per second from a
subscriber and 256,000 to 10,0@,000 bis per second to a subscriber. These rates exceed the
minimum statutory speed requircments pursuant to ldalo Code 63-3029L The Company
estimates that more than 897o of its ldaho customers have subscribed to its broadband network
within its designated service areas. Custer Telephone invested approximately $2,440,376.85 in
2019 in qualifying broadband equipment that it confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff has 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 E 63-3029I(3Xb). 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. CUS-T-20-01 is qualified broadband equipment as defined in ldaho Code
$ 63-3029(3)(b) and forward it to the ldaho Tax Commission?
Udrrmos/CUS-T-?O0l 3019 Custcr Tclcphorrc Bmadband Tar Crcdil
I
DECISION MEMORANDUM -2-
Daniel Klein
AUGUST 27,2O2O