20200814Decision Memo.pdf

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DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DAI\IEL KLEIN
DATE: AUGUST 5,2020
RE:CABLE ONE INC'S 2019 BROADBAND EQUIPMENT TAX CREDIT;
CASE NO. GNR.T-20-11.
BACKGROT'ND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualifring broadband infrastructure in Idaho. Idaho Code $ 63-30298(3)(aXii). 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
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 Code $ 63-3291(3)(b). 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 $ 63-30291(3XbXi). To be eligible
for the 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 $ 63-3029I(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 1 AUGUST 5,2020
THE APPLICATION
On July 16,2020, 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 2019. In the Application, Cable One states that it installed broadband
equipment associated with the High Speed Data ("HSD"), broadband internet access through a
cable modem. 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
Idaho Code 63-30291. The Company estimates that9To/o of its Idaho customers have access to
its broadband network within its designated service areas. Cable One invested approximately
$22,303,939 in2019 in qualifring 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 $ 63-30291(3)(b). Stafl 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-20-11 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3)(b) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/GNR-T-20-l I 2019 Cable One Broadband Tax Credit
DECISION MEMORANDUM a AUGUST 5,2020