20100830_3063.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KEMPTON
CO MMISSI 0 NER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 26, 2010
RE:COLUMBINE TELEPHONE COMPANY'S 2009 BROADBAND
EQUIPMENT TAX CREDIT APPLICATION; CASE NO. COL-10-01.
BACKGROUND
In 2001 , House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code 9 63-3029B(3)(a)(ii). In particular
Section 63-30291 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 9 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 ofa broadband network.Idaho Code 9 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 9 63-30291(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 Tax Commission.
THE APPLICATION
On July 16 2010, the Commission received an Application from Columbine Telephone
Company dba Silver Star Communications (Columbine) seeking approval of equipment for the
broadband tax credit. In the Application, Columbine states that it installed equipment associated
DECISION MEMORANDUM - 1 -AUGUST 26 2010
with Asymmetric Digital Subscriber Line (ADSL), Symmetrical Digital Subscriber Line (SDSL),
and T-1 services with transmission rates of 1.544 to 20 Mbps. Columbine asserts that 2338 of the
4320 customers are served or can be served by the broadband network. The Application states that
Columbine invested approximately $1 234 000 in qualifying broadband equipment during 2009.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Columbine and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No. 28784 and Idaho Code 9 63-3029I(3)(b). Staff also believes that the expenditures
identified by Columbine, a telecommunications provider, were for equipment that is "necessary for
the provision of broadband services and an integral part of a broadband network." Staff, therefore
recommends that the Commission issue an Order confirming the equipment is qualified broadband
equipment and forward the approving Order along with the 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. COL-10-01 is qualified broadband equipment as defined in Idaho Code 9 63-3029I(3)(b)(i),
and forward it to the Idaho Tax Commission?
;f) (Cl( 4r
~~~
Grace Seaman
i:udmemos/col-IO-
DECISION MEMORANDUM - 2 -AUGUST 26 2010