20160902Decision Memo.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
GRACE SEAMAN
SEPTEMBER 2, 2016
THE 2015 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR CELLCO PARTNERSHIP AND VERIZON WIRELESS LLC,
OPERA TING ENTITIES OF THE VERIZON WIRELESS BUSINESS
DIVISION; CASE NO. GNR-T-16-07.
BACKGROUND
In 2001, House Bill 3 77 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§ 63-3029I(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 § 63-3029I(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 -1 • SEPTEMBER 2, 2016
THE APPLICATION
On August 5, 2016, the Commission received an Application from Cellco 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 2015. In the Application, Verizon states that it installed equipment
associated with "CMDA2000 (Code Division Multiple Access) technologies to support L TE
[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 discloses 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 that 100% of its Idaho subscribers have access to the broadband network.
During 2015, the Company invested approximately $16,055,780 in qualifying broadband
equipment that it confirms is integral to the broadband network.
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§ 63-3029I(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
Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. GNR-T-16-07 is qualified broadband equipment as defined in Idaho Code § 63-30291(3 )(b ),
and forward it to the Idaho Tax Commission?
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Grace Seaman
Udmcmoslgnr-t-16-07 dee memo
DECISION MEMORANDUM -2 -SEPTEMBER 2, 2016