20180330Decision Memo.pdf

RE
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIOI\IER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING F'ILE
FROM:DANIEL KLEIN
MARCH 29,2018DATE:
DIRECT COMMIJNICATIONS ROCKLAND, INC'S APPLICATION FOR
THE BROADBAIYD EQUIPMENT TAx CREDIT FOR 2017; CASE NO.
DCM-T-I8-01.
BACKGROTJND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in ldaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section 63-30291allows 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 arate 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)0). If thc equipment is installed by a
telecommunications carriero it must also be "necessary to the provision of broadband services
and an integral part of a broadband network." Idaho Code $ 63-3029I(3XbXi). To be eligible
for the ta< credit, the tacpayer 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 $ 63-3029I(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 Idaho Tax Commission.
IDECISION MEMORANDUM March 29,2018
THE APPLICATION
On March l9,20l8,the Commission received an Application from Direct_
Communications Rockland, Inc. ("Direct" or "Cornpily"), seeking approval of the equipment
for the broadband tax credit installed during calendar year 2017. ln the Application, Direct states
that it made certain investrnents that constitute "qualified broadband equipment". Direct
discloses that its broadband network has data transmission rates of 200,000 bits per second to a
subscriber and 125,000 bits per second from a subscriber which meets the required rates of
200,000 bits per second to a subscriber and 125,000 bits per second from a subscriber. The
Company asserts that97% of its Idaho subscribers have access to the broadband network. Direct
invested approximately $2,842,973 in20l7 in qualiffing broadband equipment that it confirms is
integral to the broadband network.
STAFF REYIEW 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 $ 63-3029I(3)O). 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 Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. DCM-T-18-01 is qualified broadband equipment as defined in ldaho Code $
63-30291(3)(b) and forward it to the Idaho Tax Commission?
I
Daniel Klein
Udmemos/DCM-T-18-01 2017 Direct Broadband Tax Credit
DECISION MEMORANDUM -2-March 29,2018
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