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HomeMy WebLinkAbout20100830_3066.pdfDECISION MEMORANDUM TO:COMMISSIONER KEMPTON COMMISSIONER SMITH COMMISSIONER REDFORD COMMISSION SECRETARY LEGAL WORKING FILE FROM:GRACE SEAMAN DATE:AUGUST 27, 2010 RE:CUSTER TELEPHONE COOPERATIVE, INc.'S 2009 BROADBAND EQUIPMENT TAX CREDIT APPLICATION; CASE NO. CUS-I0-01. 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 63-30291(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 963-30291(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 August 9, 2010, the Commission received an Application from Custer Telephone Cooperative, Inc. (Custer) seeking approval of equipment for the broadband tax credit. In the Application, Custer states that it installed equipment associated with Asymmetric Digital DECISION MEMORANDUM - 1 -AUGUST 27 2010 Subscriber Line (ADSL) and Symmetrical Digital Subscriber Line (SDSL) services with transmission rates of 128 to 512 Kbps upstream and 512 Kbps to 8 Mbps downstream in four exchanges. Custer asserts that 5 of its 1000 customers are served by the broadband network. The Application states Custer invested approximately $1 million in qualifying broadband equipment during 2009. ST AFF REVIEW AND RECOMMENDATION Staff has reviewed the list of proposed broadband equipment submitted by Custer and believes the identified equipment qualifies for the investment tax credit pursuant to Procedural Order No. 28784 and Idaho Code 9 63-30291(3)(b). Staff also believes that the expenditures identified by Custer, 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 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. CUS-I0-0l is qualified broadband equipment as defined in Idaho Code 9 63- 30291(3)(b)(i), and forward it to the Idaho Tax Commission? ~&- ~ ~lLkL tVL- Grace Seaman i:udmemos/cut-I 0-0 I.doc DECISION MEMORANDUM - 2 -AUGUST 27 2010