20160701Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: GRACE SEAMAN
DATE: JUNE 30,2016
RE: CABLE ONE,INC'S 2014 BROADBAND EQUIPMENT TAX CREDIT
APPLICATION; CASE NO. GNR-T-rs-04.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code $ 63-30298(3)(aXii). 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 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(3Xb). If the equipment is installed by a
cable or open video system operator, the qualiffing 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(3xbxiii). To be eligible for the tax credit, the ta.xpayer 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 g 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.
DECISION MEMORANDUM JUNE 30, 2016
THE APPLTCATION
On June 8, 2015, the Commission received an Application from Cable One, Inc. ("Cable
One" or "Company") seeking approval of equipment for the broadband tax credit installed
during calendar year 2014. The Company submitted revisions to the Application on July 13,
2015 and June 3, 2016, The delay between revisions was due to changes with company
personnel. In the Application, Cable One states that it installed equipment associated with the
Hybrid Coax Network ("HFC") using fiber optic and coaxial cable facilities. The Company
asserts that its broadband network is capable of transmission rates of up to 50 Mbps and that
approximately 99.9Yo of its customers have access to this service. During 2014, Cable One states
that it invested approximately $7 million in qualiffing broadband equipment in the Twin Falls,
Lewiston, Pocatello, Idatro Falls, Boise, and West Valley areas.
STAFF REVIEW 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 ldaho Code $ 63-30291(3Xb). Staff also believes that the expenditures
identified by the Company, meets the requirements as defined for an open cable or open video
system provider as describedin ldaho Code $ 63-30291(3xbxiii). Stafl therefore, recommends
that the Commission issue an Order confirming the equipment is qualified broadband equipment
and forward the approving Order along with ths a copy of the amended Application to the Idaho
Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. GNR-T-15-04 is qualified broadband equipment as defined in ldaho Code $ 63-
30291(3Xb)(iii), and forward it to the ldaho Tax Commission?
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Grace Seaman
Udmcmos/cablconc gnr.t- I 5.04
DECISION MEMORANDUM JUNE 30,2016