20170609Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: GRACE SEAMAN
DATE: JUNE 8,2017
RE:POTLATCH TELEPHONE COMPAI\IY DBA TDS TELECOM'S
2016 BROADBANI' EQUIPMENT TAX CREDIT APPLICATION;
cAsE NO. POT-T-17{I.
BACKGROI.JND
In 2001, House Bill 377 was enacted authorizing income tor credit for the installation of
quali$ing broadband infrastructure in Idaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section 61-30291allows a ta:<payer 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(3Xb). 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." Idaha Code Q 63-3029I(3XbXi). To be eligible
for the tax credit, the ta:rpayer must obtain from the Commission an Order confirming 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 equiprnent is eligible for the broadband equipment tax credit, an order along with the
original Application is forwarded to the Idaho Tax Commission.
tDECISION MEMORANDUM JUNE 8,2017
THE APPLICATION
On May 12,2017, the Commission received an Application fiom Potlatch Telephone
Company dba TDS Telecom ("TDS* or "Company") secking approval of equipment for the
broadband tax credit for calendar year 2016. In the Application, TDS states that it installed
equipment associated with Digital Subscriber Line ("DSf') services in the Juliaetta, Kendrick,
and Potlatch exchanges, The Company asserts that in 2016, it doubled the top speed from the
prior year and in general transmission rates range from 25 to 50 Mbps, well above the statutory
requirements. TDS notes that approximately 95o/o of its customers in Idaho can access the
broadband network. The Company lists 2016 investments of approximately $19,500 in
qualiffing broadband equipment.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by TDS and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
OrderNo. 28784 and ldoho Code $ 63-3029(3)(b). Statralso believes that the expenditures
identificd by the Company, a telecommunications provider, were for equipment that 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 the a copy of the
original Application to the Idaho Tax Commission.
COMMISSION DECISTON
Does the Commission wish to issue an order confirming the equipment identified in Case
No. POT-T-I7-01 is qualified broadband equipment as defined in Idaho Code $ 63-30291(3Xb),
and forward it to the Idaho Tax Commission?
(
/J'It-c"
Grace Seaman
Udmcmos/rot-l-17-01 dcc mcmo
DECISION MEMORANDUM JUNE 8,20172