20221004Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOHAN E.KALALA-KASANDA
CHRIS BURDIN
DATE:OCTOBER 4,2022
RE:TDS METROCOM LLC'S 2021 BROADBAND EQUIPMENTTAX
CREDIT;CASE NO.TML-T-22-02.
BACKGROUND
In 2001,House Bill 377 was enacted authorizing income tax credits for the installation of
qualifying broadband infrastructure in Idaho.Idaho Code §63-3029B(3)(a)(ii).In particular,
Section 63-30291 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 second to a subscriber and at least
125,000 bits per second from a subscriber.Idaho Code §63-3029I(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(3)(b)(i).To be eligible for the tax credit,the taxpayer must obtain from the Commission
an order confirmingthat the installed equipment meets the statutory definition of qualified
broadband equipment.Commission Procedural Order No.35297 and Idaho Code §63-3029I(4).
Once the Commission has determinedthe installed equipment is eligible for the broadband
equipment tax credit,an order along with the original Application is forwarded to the Idaho State
Tax Commission.
DECISIONMEMORANDUM -l -OCTOBER 4,2022
THE APPLICATION
On July 12,2022,TDS Metrocom,LLC ("TDS Metrocom"or "Company"),applied to
the Commission for an order approving that the equipment for the broadband tax credit installed
during the calendar year January 1,2021 -December 31,2021,qualify as broadband equipment.
In the Application,TDS Metrocom represents that it is building a fiber-to-the-premise
(FTTP)network,which is also called Fiber to the home (FTTH)network.This is the installation
and use of optical fiber from a central point directly to individual buildings such as residences,
apartment buildings,and businesses to provide high-speed internet access.The Company
discloses that it offers products capable of providing up to l Gbps symmetrical service.The
lowest transmission speed rate offered to customers as of 12/31/21 is 300/300 Mbps.These rates
exceed the minimum statutory speed requirements under Idaho Code §63-30291.Also,the
Company represents that 27,047 customers have access to its broadband network in its service
areas;and it invested $16,573,344.98in 2021 in qualifying broadband equipment that it confirms
is integral to its broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff reviewed and audited the list of proposed broadband equipment and believes the
equipment qualifies for the investment tax credit.The Company,in the application,complies
with the new requirements of Commission Order No.35297,which supersedes Commission
Order No.28784.Staff,therefore,recommends that the Commission issue an order confirming
the equipment is qualified broadband equipment and forward that order along with a copy of the
Application to the Idaho State Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirmingthe equipment identified in Case
No.TML-T-22-02 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward it to the Idaho State Tax Commission?
Johan E.Kalala-Kasanda
UdmemosilML-T-22-02Decismn Memn
DECISION MEMORANDUM -2 -OCTOBER 4,2022