20170925Decision Memo.pdf

RE
DECISION MEMORANDI.'M
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPBR
COMMISSIONER ANDERSON
COMMISSION SECR"BTARY
LEGAL
WORKING FILE
FROM:CAROLEE HALL
SEPTEMBER 2I,2OI?DATE:
THE 2016 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
rOR CELLCO PARTNBRSHIP AND VERIZON WIRELESS LLC,
OPERATING ENTITIES OF THE VERIZON WIRELESS BUSINESS
DIVISION; CASE NO. GNR-T-I7-08.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Iclaho Code $ 63-30298(3)(a)(ii). In particular,
Section 63-30291 allows a to(payer to receive an investment tax credit for eligible broadband
equipment installed during a catendar 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 $ 63-3291(3Xb). If the equipment is installed by a
telecommunications carrier, it must also be "necessary to the provision of broadband services
and an integral pail of a broadband network." Idaho Code $ 63-30291(3)(bxi). To be eligible
for the tax credit, the taxpayer must obtain from the Commission an Order confrrming that the
installed equipment meets the statutory dehnition of qualified broadband equipment. Procedural
Order No. 28784 and ldaho Code $ 63-30291(4). Once the Commission as 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 -l-SEPTEMBER 2I ,2017
THE APPLICATION
On September 19, zOn, the Commission received an Application from Cellco
Partnership and Verizon Wireless LLC, operating entities of the Verizon Wireless business
division (collectively "Verizon" or "Compffiy"), seeking approval of the equipment for the
broadband tax credit for calendar year 2016. In the Application, Verizon states that it installed
equipment associated with "CDMA2000 (Code Division Multiple Access) technologies to
support LTE [Sonet Light Terminating Equipment] for 4G [4m 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 3Mbps 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 its ldaho subscribers have access to the broadband network.
During 2016, the Company invested approximately $l1,827,712 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 and believes the identified
equipment qualifies for the investment tax credit pursuant to Procedural Order No. 28784 and
Idaho Code $ 63-30291(3)(b). Stafl 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-I7-08 is qualified broadband equipment as defined in ldaho Code $
63-30291(3)(b) and fonvard it to the ldaho Tax Commission?
U Decrsron McmoJBroadband Ta-x CrcditVGNR-T-17-08 2016 Cellco qnd Verizon Wirelcss Broadband Tsx Crcdit
DECISION MEMORANDUM -7-SEPTEMBER 2I ,2017