20190104Decision Memo.pdf

DECISION MEMORANDI]M
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: JAIIUARY 2,2A19
RE:THE 2OI7 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR QWEST CORPORATION; CASE NO. QwE-T-18-0s.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualiSing broadband infrastructure in Idaho. Idaho Code $ 63-30298(3XaXii). In particular,
Section 63-30291allows a taxpayer to receive an investment tax credit for eligible broadband
equiprnent 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 $ 63-3291(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 ta"x 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 $ 63-30291(4). Once the Commission as 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.
IDECISION MEMORANDUM JANUARY 2,2419
THE APPLICATION
On August 3 I , 201 8, the Commission received an Application from Qwest Corporation
(collectively "Qwest" or "Companyo'), seeking approval of the equipment for the broadband tax
credit installed during calendar yew 2017. In the Application, Qwest states that it installed
equipment associated with various forms of DSl-based broadband services using a mix of fiber
and metallic cable transport, in 56Idaho exchanges. Qwest discloses that its broadband network
has data transmission rales of 256 Kbps and higher for subscriber downloads and uploads, which
exeeeds the required rates of 200,000 bits per second to a subscriber and 125,000 bits per second
from a subscriber. The Company asserts that 96% of its ldaho subscribers have access to the
broadband network. Qwest invested approximately $45,830,682 in 2017 in qualiffing
broadband equipment that it confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staffhas reviewed and audited the list of proposed broadband equipment and believes the
identified equipment qualifies for the investment tax crsdit pursua$t to Procedural Order No.
28784 and ldaho Code $ 63-3029I(3)(b). Staft 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 Tax Commission.
COMMISSION DECISION
Does the Commission rvish to issue an Order confirming the equipment identified in
Case No. QWE-T-I8-05 is qualified broadband equipment as defined in ldaho Code
$ 63-3029I(3Xb) and forward it to the ldaho Tax Commission?
Udmemos/QWE-T- I 8-05 2017 Qrvcst Broodband Tar Crcdit
DECISION MEMORANDUM -2-JANUARY 2,2079