20151016Decision Memo.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
GRACE SEAMAN
ocToBER 16,2015
THE 2OI4 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR IDAHO RSA 2 LIMITED PARTNERSHIP, AN OPERATING
ENTITY OF THE VERIZON WIRELESS BUSINESS DIVISION; CASE
NO. GNR-T-ls-lr.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualiSing broadband infrastructure in ldaho. Idaho Code $ 63-30298(3XaXii). 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(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 of a broadband network." Idaho Code $ 63-3029(3)(bxi). 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 ldaho 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 ldaho Tax Commission.
DECISION MEMORANDUM .1.ocroBER 16,2015
THE APPLICATION
On September 17,2015, the Commission received an Application from Idaho RSA 2
Limited Partnership, an operating entity of the Verizon Wireless business division ('oVerizon" 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 4G voice [4rl'Generation Mobile System] 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 betrveen 300 Kbps and 3 Mbps for
subscriber downloads and uploads, rvhich 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 that 100%
of is Idaho subscribers have access to the broadband network. During 2014, the Company
invested approximately 5404,270 in qualifring 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 ldaho Code $ 63-30291(3)(b). Staff, therefore, recommends that the
Commission issue an Order confirming the equipment is qualified broadband equipment and
fonvard the approving Order along with a copy of the original Application to the Idaho Ta,x
Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. GNR-T-15-l I is qualified broadband equipment as defined in Idaho Code $ 63-30291(3Xb),
and forward it to the Idaho Tax Commission?
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DECISION MEMORANDUM -r-
Seaman
ocToBER 16,2015