20220427Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOHAN E.KALALA-KASANDA
RILEY NEWTON
DATE:APRIL 28,2022
RE:THE 2021 BROADBAND EQUIPMENTTAX CREDIT APPLICATION
FOR DIRECT COMMUNICATIONS ROCKLAND;
CASE NO.DCM-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 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 broadbandservices
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 definitionof qualified broadband equipment.
Commission Order No.35297 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.
DECISIONMEMORANDUM -1 -APRIL 28,2022
THE APPLICATION
On March 31,2022,the Commission received an Application from Direct
Communications Rockland,Inc.("Company"),seeking approval of the equipment for the
broadband tax credit installed during calendar year 2021.However,Staff informed the Company
that the Application was not in conformitywith the requirements of the new Commission Order
No.35297.On April 22,2022,the Company submitted an amended application in compliance
with Commission Order No.35297.
In the Amended Application and in the follow up inquiries from Staff,the Company
disclosed that its broadband network has data transmission rates at a minimumrate of 25,000,000
bits per second ("bps")to a subscriber and 3,000,000 bps from a subscriber.This rate is above
the minimum statutory speed requirements pursuant to Idaho Code §63-30291.The Company
asserts that 5,293 Idaho subscribers have access to the broadband network.
The Company represent that it invested approximately $4,821,168 in 2021 in qualifying
broadband equipment that it confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staffreviewed,and audited,the list of proposed broadband equipment and believes the
identified equipment qualifies for the investment tax credit pursuant to 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 Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirmingthe equipment identified in Case
No.DCM-T-22-01 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward it to the Idaho Tax Commission?
Jonþn E.Kalala-Kasanda
Udmemos/DCM-T-22-01 DCR Broadband Tax Credh for 202l
DECISION MEMORANDUM -2 -APRIL 28,2022