20151016Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER R4PER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:OCTOBER 16,2015
RE:THE 2014 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR CELLCO PARTNERSHIP AND VERIZON WIRELESS LLC,
OPERATING ENTITIES OF THE VERIZON WIRELESS BUSINESS
DIVISION;CASE NO.GNR-T-I5-O8.
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 63-30291 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 §63-30291(3)(b).If the equipment is installed by a
telecommunications carrier,it must also be mecessary to the provision of broadband services
and an integral part of a broadband network.”Idaho Code §63-30291(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 §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 -I -OCTOBER 16,2015
THE APPLICATION
On September 17,2015,the Commission received an Application from CelIco
Partnership and Verizon Wireless LLC,operating entities of the Verizon Wireless business
division (collectively “Verizon”or “Company”),seeking approval of equipment for the
broadband tax credit installed during calendar year 2014.In the Application,Verizon states that
it installed equipment associated with “CMDA2000 (Code Division Multiple Access)
technologies to support LTE [Sonet Light Terminating Equipment]for 40 [4th Generation
Mobile System]voice and broadband data,in addition to three other generations of CDMA
based cellular network technologies.”Verizon affirms that its broadband network has data
transmission rates between 300 Kbps and 3 Mbps for subscriber downloads and uploads,which
exceeds the required rates of 200,000 bits per second to a subscriber and 125,000 bits per second
from a subscriber.The Company asserts thaI 100%of its Idaho subscribers have access to the
broadband network.During 2014,the Company invested approximately $12,861,600 in
qualifying broadband equipment.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Verizon 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,therefore,recommends that the
Commission issue an Order confirming the equipment is qualified broadband equipment and
forward the approving Order along with a copy of the original Application to the Idaho Tax
Comm i ssion.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No.GNR-T-15-08 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
cf
brace Seaman
Udmcmos/gnr-L-i5MRbIc cciico dcc memo
DECISION MEMORANDUM -2 -OCTOBER 16,2015