20210430Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DANIEL KLEIN
DATE:APRIL 30,2021
RE:CUSTER TELEPHONE COOPERATIVE,INC'S 2020 BROADBAND
EQUIPMENTTAX CREDIT;CASE NO.CUS-T-21-01.
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 63-3029I 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 §63-329I(3)(b).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 §63-3029I(3)(b)(i).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 Idaho Code §63-3029I(4).Once the Commission has determinedthe
installed equipment is eligible for the broadband equipment tax credit,an order along with the
original Application is forwarded to the Idaho Tax Commission.
DECISION MEMORANDUM -1 -APRIL 30,2021
THE APPLICATION
On April 16,2021,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 2020.In the Application,Custer
Telephone states that it installed broadband equipment associated with Very-high-data-rate
Digital Subscriber Line (VDSL)Fiber to the Home (FTTH)and Asymmetrical Digital
Subscriber Line (ADSL).Custer Telephonediscloses that its broadband network has data
transmission rates of 512,000 to 1 Gbps to a subscriber and 128,000 to 200 Mbps from a
subscriber.These rates exceed the minimum statutory speed requirements pursuant to Idaho
Code §63-30291.The Company estimates that more than 90%of its Idaho customers have
subscribed to its broadband network within its designated service areas.Custer Telephone
invested approximately $878,654.68 in 2020 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 Idaho Code §63-3029I(3)(b).Staff,therefore,recommends that the Commission
issue an Order confirmingthe equipment is qualified broadband equipment and forward the
approving Order along with a copy of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirmingthe equipment identified in
Case No.CUS-T-21-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission?
Daniel Klein
CUS-T-21-01 2020 Custer Telephone Broadband Tax Credit
DECISION MEMORANDUM -2 -APRIL 30,2021