20220722Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOHAN E.KALALA-KASANDA
RILEY NEWTON
DATE:JULY 26,2022
RE:QWEST CORPORATION DBA CENTURYLINK QC'S 2020
BROADBAND EQUIPMENTTAX CREDIT;CASE NO.QWE-T-22-01.
BACKGROUND
In 2001,House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho.Idaho Code §63-3029B(3)(a)(ii).In particular,
Section 63-3029I 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-
3029I(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 determined the 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.
DECISION MEMORANDUM -1 -JULY 26,2022
THE APPLICATION
On January 24,2022,the Commission received an Application from Qwest Corporation
DBA CenturyLinkQC ("Qwest "or "Company"),seeking approval of the equipment for the
broadband tax credit installed during the calendar year 2020.On June 21,2022,the Company
submitted an amended application ("Application")to comply with the new requirements of
Commission Order No.35297,which supersedes Commission Order No.28784.
In the Application,Qwest represents that it uses terrestrial wireline technology and has
installed broadband equipment associated with various forms of DSL-based equipment (ADSL
&VDSL in various vintages).Data transportation is a mixture of fiber optic and metallic cable,
which typically is also supporting traditional telephony services.Equipment terminals are
located in central office buildings,remote buildings,and in cabinets on concrete pads each
serving a neighborhood.The Company discloses that the lowest broadband network data
transmission rate offered to customers is 500,000 bits per second for downloads and 250,000 bits
per second for uploads.These rates exceed the minimum statutory speed requirements under
Idaho Code §63-30291.The Company also represents that it could provide high-speed internet
to 97 percent of its potential customers within its designated service area.The total number of
customers with the potential to be high-speed internet subscribers in Idaho is 215,939 and the
total number of potential subscribers is 222,958.Qwest states that it invested $54,369,281 in
2020 in qualifying broadband equipment 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.Staff,therefore,recommends that the
Commission issue an order confirmingthe equipment is qualified broadband equipment and
forward the approving order along with a copy of the Application to the Idaho State Tax
Commission.
DECISION MEMORANDUM -2 -JULY 26,2022
COMMISSION DECISION
Does the Commission wish to issue an order confirmingthe equipment identified in Case
No.QWE-T-22-01 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward it to the Idaho State Tax Commission?
han E.Kalala-Kasanda
Udmemos/QWE-T-22-01 Decision Memo
DECISION MEMORANDUM -3 -JULY 26,2022