20170317Decision Memo.pdf

TO
FROM:
DATE:
DECISION MEMORANDT]M
COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER AIYDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
GRACE SEAMAN
MARCH 15,2017
RE:MILLENNIUM NETWORKS, LLC'S APPLTCATION FOR THE
BROADBAND EQUIPMENT TAX CREDTT FOR YEARS 2013-2015;
cAsE NO. MNL-T-16-01
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in ldaho. 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
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 $ 63-30291(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 ofa broadband network." Idaho Code $ 63-30291(3xb)(i). To be eligible
for the tax credit, the taxpayer must obtain from the Commission an Order conFrrming that the
installed equipment meets the statutory definition of qualified broadband equipment. Procedural
OrderNo. 28784 and ldaho Code $ 63-30291(4). Once the Commission has 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.
THE APPLICATION
On December 19, 2A17, the Commission received an Application from Millennium
Networks, LLC ('Millennium" or "Company") seeking approval of equipment for the broadband
DECISION MEMORANDUM 1 MARCH I5,2OI7
tax credit for calendar years 2013, 2014, and 2015. An amendment to the Application was liled
on March 1,2017. In the Application, Millennium states that it installed broadband equipment
associated with Cable Modem and High Speed Broadband services with transmission rates of l5
to 60 Mbps upstream and 3 to l0 Mbps downstream. These rates are above the statutory speed
requirements pursuant to ldaho Code 63-30291. In the Amendment to the Application, the
Company estimates that "more than 50% of its customer base has access to its broadband
network within its designated service areas." During 2013, 2014, and 2015, the Company
invested approximately $ I 9,400, $ I 82,800, and $33 I ,000, respectively, in qualiffing broadband
equipment. The Company states that "the listed equipment shown on the exhibits to the
application constitutes an integral part of the relevant broadband network, necessary to provide
broadband services..." .See Amendment to the Application.
STAFF RBVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Millennium
and believes the identified equipment qualifies for the investment tax credit pursuant to
Procedural Order No. 28784 and ldaho Code $ 63-30291(3Xb). Staff also believes that the
expenditures identified by the Company, a telecommunications carrier is "necessary for the
provision of broadband services and an integral part of a broadband network." 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 Tar Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. MNL-T-16-01 is qualified broadband equipment as defined in ldaho Code $ 63-3029(3Xb),
and forward it to the ldaho Tax Commission?
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DECISION MEMORAI.IDUM 2
Grace Seaman
MARCH I5,2AN