20181026Decision Memo.pdf

TO:
[.ROM:
DATE:
DECISION MEMORANDUM
COMMISSIONER KJELLAIYDER
COMMISSIONER RAPER
COMMISSIONER A}IDERSON
COMIIyIISSION SECRETARY
LEGAL
WORKING FILE
DANIEL KLEIN
ocToBER 25,2018
RE TI{E 2017 BROADBAT{D EQUIPMENT TAX CREDTT APPLICATION
FOR IDAIIO 6.CLARK LIMITED PARTNERSHIP AN OPERATING
ENTITY OF THE VERIZON WIRELESS BUSINESS DIVISION;
CASE NO. GNR.T-I8.09.
BACKGROIJNI)
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in Idatro. Idaho Code $ 63-30298(3XaXii). In particular,
Section 63-3029I 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
hansmitting signals at arat* of at lcast 200,000 bits per seconds (bps) to a subscriber and at least
125,000 bps from a subscriber;' Idaho Code $ 63-3291(3)(b). lf the equipment is installed by a
telecommunications carrier, it must also be "necessaJy 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 confirming that the
installed equipment meets the stafutory definition of qualified broadband equipment. Procedural
Order No. 28784 and ldaho Code $ 63-3029I(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 I ocroBER 25,20t8
THE APPLICATION
On October 9,2018, the Commission received an Application from ldaho 6-Clark
Limited Partnership 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 2017. 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-ba.sed 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 asserls that 100% of its tdaho subscribers have access to the broadband network.
Verizon invested approximately $4,201,641.18 in 2017 in qualifuing broadband equipment that it
confirms is integral to the broadband network
STAFF REYIEW 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 $ 63-30291(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-I8-09 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3)(b) and forward it to the Idaho Tax Commission?
,\/
DECISION MEMORANDUM 1
Daniel Klein
ocroBER 25,2018
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