20170825Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJOLLANDBR
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: CAROLEE HALL
DATE: AUGUST 24,2017
RE:QWEST CORPORATTON 2016 BROADBAND EQUTPMENT TAX
CREDIT APPLICATION; CASE NO. QWB-T-17-03.
BACKGROUND
In 2001, Flouse Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. ldaho Code $ 63-30298(3XaXii). In particular,
Section 63-3029, allows a taxpayer to receive an investment tax credit for eligible broadband
equipmcnt 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. ldaho Code $ 63-3291(3Xb). If the equipment is installed by a
telecommunications carrier, it must also bc "neccssary to the provision of broadband services
and an integral part of a broadband network." ldaho 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 $ $4A29\4). Once the Commission as determined the
installed equipment is eligible for the broadband equipment tar credit, an order along with the
original Application is forwarded to the ldaho Tax Commission,
THE APPLICATION
On August 16,2017, Qwest Corporation filed an Application seeking Commission
approval of equipment for the broadband tax credit lor calendar year 2016. Qwest states in the
Application that it installed equipment associated with various forms of DSL-based broadband
DECISION MEMORANDUM -l-AUGUST 24,2A17
services (ADSL-Asymmetric Digital Subscriber Line and VDSL * Very-high-data-rate Digital
Subscriber Line), using a mix of fiber and metallic cable transport, in 57 ldaho exchanges. The
Company provided the follorving details:
a/ol
95
Investment
$35,261,489
Rctircments Netlnvestment2
($ 1,239,457) $34,022,A32
STAFF REVIE}YS AND RBCOMMENDATION
Staffhas reviewed the list of proposed broadband equipment and believes the itemized
expenses, qualifies for the investment tax credit pursuant to Procedural Order No. 28784 and
lclaho Code $ 6l-3029I(3)(b). Staffalso believes that the expenditures identified by the
Company, a telecommunications provider, wcre for equipment that is "necessary for the
provision of broadband services and an integral part of a broadband network." Staff; thereforc,
recommends that the Commission issue an Order confirming the equipment is qualified
broadband equipment and tbnvard the approving Order along rvith a copy of the original
Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission rvish to issue an Order confirming the equipment identified in Case
No. QWE-'['-17-03 is qualified broadband equipment as defined in ldaho Code $ 63-30291(3Xb)
and forward it to the Idaho Tax Commission?
C I'lall
U:Dr:cision tvlcrnoVBroadband Tar Crcditsl20l6 Qlcst Corp DBA CcnluryLink QC's Broadband Tax Credit QWE-T-t7-03
I The percentage of living units (street addresses) where the Company might send a bill and rvhere wireline plant is
nearby. This figure represents the o,'o of working qualified living units where DSl--based service could be
provisioned in a short timcframe.
2 lnvestmcnt 535,261,489 minus Retiremcnt (S 1,239,457) equals NET INVESTMENT $34,022,032
DECISION MEMORANDUM a AUGUST 24,2017
Transr.nission Rates
256kbs to 40 mbps