20140912Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:SEPTEMBER 9,2014
RE:CABLE ONE INC’S 2013 BROADBAND EQUIPMENT TAX CREDIT
APPLICATION;CASE NO.GNR-T-14-05.
BACKGROUND
In 2001,1-louse Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho.Idaho Code §63-3029B(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.
“Qualifying 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 §63-30291(3)(b).If the equipment is installed by a
cable or open video system operator,the qualifying equipment must “extend from the
subscriber’s side of the headend to the outside of the structure in which the subscriber is
located.”Idaho Code §63-30291(3)(b)(iii).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 §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 June 23,2014,the Commission received an Application from Cable One,Inc.(“Cable
One”or “Company”)seeking approval of equipment for the broadband tax credit.On
DECISION MEMORANDUM 1 AUGUST 28,2014
August 28,2014,Cable One submitted revised exhibits B and B-2.In the Application,the
Company states that it installed equipment associated with the Hybrid Coax Network (HFC)
using fiber optic and coaxial cable facilities.Cable One asserts that its broadband network is
capable of transmission rates of up to 50 Mbps and that approximately 99.9%of its customers
have access to this service.During 2013,the Company states that it invested approximately $9.1
Million in qualifying broadband equipment and requests credit for $134,748 (See revised exhibit
B).
STAFF REVJEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Cable One and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No.28784 and Idaho Code §63-30291(3)(b).Staff also believes that the expenditures
identi tied by the Company,meets the requirements as defined for an open cable or open video
system provider as described in Idaho Code §63-30291(3)(b)Oii).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 and amended
exhibits B and B-2 to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No.GNR-T-14-05 is qualified broadband equipment as defined in Idaho Code §63-
30291(3)(b)(iii),and forward it to the Idaho Tax Commission?
Grace Seaman
i:udmemos/gnr-E-14-05
DECISION MEMORANDUM 2 AUGUST 28,2014