20170925Decision Memo.pdf

TO:
FROM:
DATE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
CAROLEE HALL
SEPTEMBER 2I,2017
RE:THE 2016 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR CELLULAR INC. NETWORK CORPORATION, AN OPERATING
f,,NTITY OF THE VERIZON WIRELESS BUSINESS DMSION; CASE
NO. GNR-T-I7-r0.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
quali$ing 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;' ldaho Code $ 63-3291(3Xb). If the equipment is installed by a
telecommunications carrier, it must also be "necessar3/ to the provision of broadband services
and an integral part of a broadband network." Idaho Code $ 63-30291(3XbXi). 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 $ $4A291(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 ldaho Tax Commission.
DECISION MEMORANDUM SEPTEMBER 2I ,2017I
THE APPLICATION
On September 19, 2017, the Commission rece ived an Application from Cellular Inc.
Network Corporation, an operating entity of the Verizon Wireless business division (collectively
"Verizon" or "Company"), seeking approval of the equipment for the broadband tax credit
installed during 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 [4fr 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, which exceeds the required rates of
200,000 bis 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 $2,475,709 in qualifying broadband
equipment that it confirms is integral to the broadband network
STAFF REVIEW AND RECOMMENDATTON
Staffhas 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
ldaho Code $ 63-30291(3Xb). 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 ldaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. GNR-T-|7-10 is qualified broadband equipment as defined in ldaho Code $
63-30291(3)(b) and forward it to the Idaho Tax Commission?
U;Dccision Mcmos/Broadband Tox Crcdits/CNR-T.17-10 Ccllular lnc Nctsork Corp, Vmizon Wirelcss Businr:ss
DECISION MEMORANDUM -)-SEPTEMBER 2I,20I7
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