20190726Decision Memo.pdf

RE
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: JULY 25,2019
CABLE ONE INC'S 2OI8 BROADBAND EQUIPMENT TAX CREDIT;
CASE NO. GNR.T-I9.05.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. 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 equiprnent 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 Cocle $ 63-3291(3)(b). If the equipment is installed by a
telecommunications carrier, it must also be "necessary to the provision of broadband sen,ices
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 Cornmission 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 Comrnission.
IDECISION MEMORANDUM JULY 25,2019
THE APPLICATION
On July 5,2A19, the Commission received an Application from Cable One Inc. ("Cable
One" or "Company"), seeking approval of the equipment for the broadband tax credit installed
during calendar year 2018. In the Application, Cable One states that it installed broadband
equipment associated with the Hybrid Coax Network ("HFC"). Cable One discloses that its
broadband network has data transmission rates of 3 Mbps to 200Mbps. These rates exceed the
minimum statutory speed requirements pursuant to ldaho Code $ 63-3029I. The Company
estimates that 99.9o/o of its Idaho customers have access to its broadband network within its
designated service areas. Cable One invested approximately $18,364,943 in 2018 in qualifying
broadband equipment that it confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff has 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 $ $4A291(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 rvish to issue an Order confirming the equipment identified in
Case No. GNR-T-19-05 is qualified broadband equipment as defined in ldaho Code $
63-30291(3Xb) and forward it to the Idaho Tax Commission?
Daniel Klein
Udnrenros/GNR-T-19-05 2018 Cable One Broadband Tax Credit
DECISION MEMORANDUM a JULY 25,2019
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