20181026Decision Memo.pdf

RE
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMIVIISSIONER AITDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLETN
DATE: OCTOBER 25,2018
THE 2OI7 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR CELLCO PARTNERSHIP AI\D VERIZON WIRELESS LLC. AN
OPERATING ENTITY OF THE VERIZON WIRELESS BUSINESS
DIYISION; CASE NO. GNR-T-18-07.
BACKGROT]ND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in ldaho. Idaho Code $ 63-30298(3XaXiD. [n particular,
Section 63-30291allows a taxpayer to receive an investment tax oedit for eligible broadband
equipment installed during a calendar year.
Qualified broadband equipment is defined as "those network facilities capable of
transrnitting signals at arate 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(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 $ 63-30291(3)(bxi). To be eligible
for the tax credit, the taxpayer must obtain from the Commission an Order confimring 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 as deterrnined 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 25,2018
THE APPLICATION
On October 9,2018, the Commission received an Application from Cellco Partnership
and Verizon Wireless, LLC. an operating entity of the Verizon Wireless business division
(collectively "Verizon" or "Compffiy"), seeking approval of the equipment for the broadband tax
credit installed during calendar yeu 2017. In the Application, Verizon states that it installed
equipment associal.ed with "CDMA2000 (Code Division Multiple Access) technologies to
support LTE [Sonet Light Terminating Equipment] for 4G [4ft 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 subsuiber 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 l00Yo of its Idaho subscribers have access to the broadband network.
Verizon invested approximately $l1,214,584.64 in2017 in qualiffing broadband equipment that
it confirms is integral to the broadband network.
STAFF REVIEW AIYD RECOMMENDATION
Staffhas reviewed and audited 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 $ $4A29I(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 l-ax Commission.
COMMISSION DECISION
Docs the Commission wish to issue an Order confirming the equipment idcntified in
Case No. GNR-T-18-07 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3)(b) and forward it to the Idaho Tax Commission?
Daniel Klein
UdmcmoVCNR-T-I8-07 Verizon Broadband Tax Credit dec memo
DECISION MEMORANDUM a ocToBER 25,2018
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