20220722Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOHAN E.KALALA-KASANDA
CLAIRE SHARP
DATE:JULY 26,2022
RE:CUSTER TELEPHONE COOPERATIVE,INC'S 2021 BROADBANDEQUIPMENTTAXCREDIT;CASE NO.CUS-T-22-01.
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 second to a subscriber and at least
125,000 bits per second from a subscriber.Idaho Code §63-3029I(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 confirmingthat the installed equipment meets the statutory definition of qualified
broadband equipment.Commission Procedural Order No.35297 and Idaho Code §63-3029I(4).
Once the Commission has determined the installed equipment is eligible for the broadband
equipment tax credit,an order along with the original Application is forwarded to the Idaho State
Tax Commission.
DECISION MEMORANDUM -l -JULY 26,2022
THE APPLICATION
On June 2,2022,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 the calendar year 2021.In the Application,Custer
Telephonerepresents 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).The Company discloses that its broadband network has data
transmission rates of 512 Kb per second to 1 Gbps to a subscriber and 128 Kb per second to 200
Mbps from a subscriber.These rates exceed the minimum statutory speed requirements under
Idaho Code §63-30291.The Company represents that it provides 1,577 Idaho customers with
broadband service and estimates 1,700 potential Idaho customers to be served with its broadband
network within its designated service areas.Custer Telephonestates that it invested
$1,845,632.98in 2021 in qualifying broadband equipment integral to its broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff reviewed and audited the list of proposed broadband equipment and believes the
identified equipment qualifies for the investment tax credit under Commission Procedural Order
No.35297 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 State Tax
Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirmingthe equipment identified in Case
No.CUS-T-22-01 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward it to the Idaho State Tax Commission?
an E.Kalala-Kasanda
Udmemos/CUS-T-22-01 Deciúon Memo
DECISIONMEMORANDUM -2 -JULY 26,2022