20181026Decision Memo.pdf

DECISION MEMORATIDUM
TO COMMISSIONER KJELLAI\IDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: OCTOBER 25,2018
RE:TrJ'E2OIT BROADBAI{D EQUIPMENT TAX CREDIT APPLICATION
FOR COMMNET CELLULAR INC. AN OPERATING SNTITY OF THE
VERIZON WIRELESS BUSINESS DMSION; CASE NO. GNR-T-18-08.
BACKGROTJND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in Idaho. Idaho Code $ 63-30298(3XaXii). [n particular,
Section 63-3029I allows a taxpayer to receive an investrnent 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 arate of at least 200,000 bits per seconds (bps) to a subscriber and at least
125,000 bps from a subscriber." Idaho Code $ 63-329I(3)0). 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)(bXi). To be eligible
for thc 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 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.
IDECISION MEMORANDUM ocroBER 25,2018
THE APPLICATION
On October 9,2018, the Commission received an Application from CommNet Cellular
lnc. an operating entity of the Verizon Wireless business division (collectively "Verizon" or
"Company"), seeking approval of the equipment for the broadband tax credit installed dudng
calendar year 2017. In the Application, Verizon states that it installed equiprnent associated with
*CDMA2000 (Code Division Multiple Access) technologies to support LTE [Sonet Light
Terminating Equipment] for 4G [4e 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
fbr 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. Verizon invested
approximately $4,556,673.98 :r:,2017 in qualifuing broadband equipment that it con{irms is
integral to the broadband network
STAFF' REVIEW AND 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 $ 63-3029f(3)(b). Stafe 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-I8-08 is qualified bmadband equipment as defined in ldaho Code $
63-3029I(3)(b) and forward it to the Idaho Tax Commission?
.,,|a I
Udmcmos/GNR-T-18-08 2017 Verizon Broadband 'l'ax Crcdit
DECISION MEMORANDUM -2-
Daniel Klein
ocToBER 25,2418
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