20191227Decision Memo.pdf

DECISION ME,MORANDUM
TO:COMMISSIONER KJELLANDEIT
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING I'II,E
FROM: DANIEL KLEIN
DATE: DECEMBER 2i,2019
RE:THE 2OI8 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR COMMNET CELLULAR INC. AN OPERATING ENTITY OF THE
vERIZON wIRELESS Ill..SlNuSS l)IVISION: CASIT NO. GNR-T-19-09.
BACKGROUNI)
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastruclurc in Idaho. ldaho Cbde g 63-30298( 3 )(a)(ii). In particular,
Section 63-30291 allows a laxpayer to receive an investment tax credit fbr eligible broadband
equipment installed during a calendar year.
Qualified broadband equipment is defined as "those network facilities capable of
transmitting signals at a rate of at least 200,000 bils per seconds (bps) to a subscribcr 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 ofbroadband senices
and an integral part ofa broadband netrvork." lclaho (.ode $ 63-30291(3 Xb)(i). 1'o be eligible
lbr the lax credit, the ta\payer musl obtain fronr lhe Comrrission an Order confimring that the
installed equipment meets the statutory definition ofqualified broadband equipment. Procedural
Order No. 28784 and ldaho Cotle S 63-30291(4). Once the Commission as determined the
installed equipment is eligible for the broadband equipment tax credit. an order along wilh the
original Application is fbrwarded to the Idaho Tax Commission.
DI-]CISION MEMORANDI ]M DI]CEMBF-R 23- ?OI9
THE APPLICATION
On C)ctober '15,2019, the Commission received an Application from CommNet Cellular
Inc, an operating entity ofthe Verizon Wireless business division (collectively "Verizon" or
"Company"), sceking approval of the equipment for the broadband lax credit installed during
calendar year 201 8. In the Application, Verizon states that it installed equipment associated u,ith
"CDMA2000 (Code Division Multiple Access) technologies to support LTE ISonet Light
Terminating Equipmentl for 4G [4'h 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 betrveen 300 Kbps and 3 Mbps
for subscriber dounloads 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
I00% of its ldaho subscribers have access to the broadband network. Verizon invested
approximately Sl,659.894 in 2018 in qualifying broadband equipment that it confirms is integral
to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staffhas revicwcd and auditcd thc list ofproposed broadband equipment and believes the
identified equipment qualifies for the investment tax credit pursuant to Procedural Order No.
28784 and ldaho Code e 63-30291(3)(b). Staff. therefore. recommends that the Commission
issue an Order confirming the equipment is qualified broadband equipmenl and forward the
approving Order along with a copy of the original Application to the ldaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order conlirming thc equiprnent identillcd in
Case No. GNR-1'-19-09 is qualified broadband equipment as defined in ldaho ('ode \
63-10291(3 Xb) and fonvard it to the ldaho 'fax Conrnrission?
Lldmcmos/GN Rjl - 19-U9 2017 Veriron Broild band l u\ Cred it
DECISION ME]\4ORANDUM DITCEMBI]R 23,2019
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I)aniel Klein