20191227Decision Memo.pdf

ITE
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDEI{SON
COMMISSION SECRETARY
I,EGAL
WORKING FII,E
FROM: DANIEL KLEIN
DATE: DECEMBER 23,2019
THE 20I8 BROADBAND EQTUPNIENT TAX CREDIT APPLICATION
FOR CELLCO PARTNERSHIP AND VERIZON WIRELESS LLC. AN
OPERATING ENTITY OF THE VERIZON WIRI'I-ESS BTISINDSS
DIVISION; CASE NO. GNR-T-I9-08.
BACKCROUND
In 2001, House Bill 377 was enacted aulhorizing income tax credit for the installation of
qualifying broadband inliastructure in ldaho. lclaho Code g 63-30298(3Xa)(ii). In particular,
Section 63-30291 allo*s a taxpayer to receive an investnrent tax credit for eligiblc broadband
equipment installed during a calendar ycar.
Qualilied broadband equipment is defined as "lhose network lacilities capable of
transmining signals at a rate ofat least 200.000 bits per seconds (bps) to a subscriber and at least
125,000 bps from a subscriber." IdahoCode 963-3291(3Xb). If the equipment is installed bya
telecommunications canier. it must also be "necessary to the provision ofbroadband services
and an integral part ofa broadband network." ldaho Code $ 63 -3029(3xb)(i). To bc eligible
for the tax credit, the taxpayer must obtain from the Commission an Order confirming that the
installed equipment meets the statutory definition ofqualilied broadband equipment. Procedural
Order No. 28784 and ldaho Code $ 63-30291(4). Once the Conrmission as determined the
installed equipmcnt is eligible for the broadband equipment tax credit, an order along with the
original Application is forwarded to the ldaho Tax Commission.
DI]CISION MIIMORANDLIM DECEMBER 23, 20 I 9-l-
THE APPLICATION
On October 15, 2019, the Commission received an Application from Cellco Partnership
and Verizon Wireless. LLC. an operating enlity of the Verizon Wireless business division
(collectively "Verizon" or "Company"). seeking approval oflhe equipment tbr the broadband tax
credit installed during calendar year 2018. In the Application, Verizon states that it installed
equipment associated with 'CDMA2000 (Code Division Multiple Access) technologies ro
support LTE [Sonet Light Terminating Equipment] for 4G [4s Generation Mobile System] voice
and broadband data, in addition to three other generations of CDMA-based cellular network
technologies." Verizon discloses that ils broadband network has data transmission rates between
300 Kbps and 3 Mbps for subscriber downloads and uploads, u,hich 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 thal I00% of its Idaho subscribers have access to the broadband network.
Verizon invested approximately $8,200,533 in 2018 in qualifying broadband equipmenl that it
confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff has rcviewed and audited thc Jist ofproposed broadband equipment and believes the
identified equipment qualifies lbr the inveslment tax credit pursuant to Procedural Order No.
28784 and ldaho Code $ 63-30291(3Xb). Stafl, therefore, recommends that the Commission
issue an (Jrder confinning the equipnrent is qualilicd broadband equipment and fbn^,ard the
approving Order along u'ith a copy of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order contirming the equipment identified in
Case No. GNR-'I-I9-08 is qualificd broadband equipment as defined in ldaho Code I
63-30291(3)(b) and forward it to the Idaho Tax Commission?
I ]rjmemos/CNR-T- li{)8 2018 vcrizo,r Brodbalrd Itr\ Crcdit
DECISION ME1\4ORANDI ]M a_
I)aniel Klein
DECEMBIiR 23.20I9