20180720Decision Memo.pdf

RE
DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER AI\{DERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: JULY 19,2018
POTLATCH TELEPHONE COMPAI{Y DTBIATDS TELECOM'S 2017
BROADBAI\ID EQUIPMENT TAX CREDIT; CASE NO. POT-T-18-01.
BACKGROTJhID
In 2001, House Bill37'l was enacted authorizing income tax credit for the installation of
qualiffing broadband infraskucture in tdaho. Idaho Code $ 63-30298(3)(a)(ii). In particular,
Section 63-30291allows 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 $ 63-329(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." Idaho Code $ 63-30291(3)(bxi). 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 cquipment is eligible for the broadband equipment tax credit, an order along with the
original Application is forwarded to the Idaho Tax Commission.
-l-DECISION MEMORANDUM JULY 19,2018
THE APPLICATION
On July L2,2018, the Commission received an Application from Potlatch Telephone
Company d/b/a TDS Telecom ("TDS" or "Company"), seeking approval of the equipment for
the broadband tax credit installed during calendar year 2017. In the Application, TDS states that
it installed broadband equipment associated with Digital Subscriber Line ("DSL) service. TDS
discloses that its broadband network has data transmission rates of 256 kbps to 3 Mbps upstream
and lMbps to 50 Mbps dovrnstream. These rates exceed the minimum statutory speed
requirsments pursuant to ldaho Code 63-30291. The Company estimates that9lYo of its Idaho
customers have access to its broadband network within its designated service areas. TDS
invested approximately $11,088 :.rl.2017 in qualifying broadband equipment that it confirms is
integral to the broadband network
STAFF REVIEW AND RECOMMENDATION
Staffhas 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 $ $4A29I(3)(b). Staff, therefore, recommends that the Commission
issue an Order confirming the equipment is qualifred 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. POT-T- I 8-01 is qualified broadband equipment as defined in ldaho Code $
63-30291(3)(b) and forward it to the idaho Tax Commission?
Daniel Klein
UdmemoVpot-t- I 8-01 2016 TDS Broadband Tax Credit dec memo
DECISION MEMORANDTIM -2-JULY I9,20I8
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