20170414Decision Memo.pdf

RE:
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DECISION MEMORANDT'M
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER AI\IDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: GRACE SEAMAN
DATE: APRIL l2,2ll7
DIRECT COMMIJNICATIONS ROCKLAND, INC'S 2016 BROADBAND
EQUIPMENT TAX CREDIT APPLICATION; CASE NO. DCM-T-17-01
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income ta:< credit for the installation of
qualiffing broadband infrastructure in ldaho. Idoho Code $ 63-30298(3XaXiD. In particular,
Section 63-30291 allows a taxpayer to receiye an investment tax uedit 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 $ 63-3029I(3Xb). lf 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." Idaha 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 $ 63-30291(4). Once the Commission has determined the
installed equipment is eligible for the broadband equipment ta:r credit, an order along with the
original Application is fonrarded to the Idaho Tax Commission.
THE APPLICATION
On February 28,2017,the Commission received an Application from Direct
Communications Rockland, Inc. ('Rockland" or "Company") seeking approval of equipment for
the broadband tax credit for calendar year2016. In a subsequent email received on April 4,
DECISION MEMORANDUM I APRJL I2,2OI7
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2017, the Company affirms that "all work orders submitted for Broadband tan credits for 2016
were necessary and an integral part of Rockland's broadband network." Rockland slates that it
installed equipment associated with Digital Subscriber Line (DSL) and Ethemet services over
fiber and copper wireline network with transmission rates of 200 Kbps to a subscriber and 125
Kbps from a subscriber. The Company asserts thatSZYo of its customer can be served by the
broadband network. During 2017,the Company invested approximately $1,950,000 in
qualifring broadband equipment.
STAFF REVIEW AIYD RECOMMENDATION
Staffhas reviewed the list of proposed broadband equipment submitted by Rocktand and
believes the identified equipment qualifies fbr the investment tax credit pursuant to Procedural
Order No. 28784 and ldaho Code $ 63-30291(3)(b). Staff also believes that the expenditures
identified by the Company, a telecommunications provider, is oonecessary for the provision of
broadband services and an integral part of a broadband network." Staff, thcrefore, recommcnds
that the Commission issue an Order confinning the equipment is qualified broadband equiprnent
and forward the approving Order along with a copy of the original Application to the Idaho Tax
Commission.
COMMISSION DECISION
Does the Commission rvish to issue an order confirming the equipment identified in Case
No. DCM-T-17-01 is qualified broadband equipment as defined in ldaho Code $ 63-3029(3Xb),
and forward it to the Idaho Tax Commission?
(L Lr ..t,Lu\*
Grace Seaman
Udmcrnos/dcm.l- I 7-01 r.lcc mcmo
DECISION MEMORANDUM APRIL I2,2OI7