20221220Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOHAN E.KALALA-KASANDA
CHRIS BURDIN
DATE:DECEMBER 20,2022
RE:IN THE MATTER OF QWEST CORPORATION'S APPLICATION FOR
APPROVAL OF THE IDAHO BROADBAND EQUIPMENTTAX CREDIT
FOR THE YEAR 2021;CASE NO.QWE-T-22-17.
BACKGROUND
In 2001,House Bill 377 was enacted authorizing income tax credit for the installation of
qualifyingbroadband infrastructure in Idaho.Idaho Code §63-3029B(3)(a)(ii).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 Idaho Public
Utilities Commission ("Commission")an order confirmingthat the installed equipment meets
the statutory definition of qualified broadband equipment.Order No.35297;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 -DECEMBER 20,2022
THE APPLICATION
On November 28,2022,Qwest Corporation ("Qwest"or "Company")submitted an
Application to the Commission seeking approval for the broadband tax credit for the broadband
equipment installed during the calendar year 2021.
In the Application,Qwest represents that it uses terrestrial wireline technology and has
installed broadband equipment associated with various forms of Digital Subscriber Line (DSL)
based equipment,including Asymmetric Digital Subscriber Line (ADSL),and Very-High-Bit -
Rate Digital Subscriber Line (VDSL)in various vintages.Data transportation is a mixture of
fiber optic and metallic cable,which also supports traditional telephony services.The 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.The Company states that 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 91 percent of its potential customers within its designated
service area.The total number of customers with the potential to be high-speed internet
subscribers is 647,270 and the total number of potential subscribers is 711,453.Qwest states
that,in 2021,it made a net investment of $26,880,360 in qualifying broadband equipment
integral to its broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff examined the list of proposed broadband types of equipment,and Staff believes the
types of equipment listed do qualify for the investment tax credit.Staff recommends that the
Commission issue an order confirmingthat the types of equipment are qualified broadband types
of equipment,and forward the approving order along with a copy of the Application to the Idaho
State Tax Commission.
DECISION MEMORANDUM -2 -DECEMBER 20,2022
COMMISSION DECISION
Does the Commission wish to issue an order confirmingthe types of equipment identified
in Case No.QWE-T-22-17 are qualified broadband types of equipmentas defined in Idaho Code
§63-3029I(3)(b),and forward the order and a copy of the Application to the Idaho State Tax
Commission?
o an E.Kalala-Kasanda
Udmemos/QWE-T-22-17 Decision Memo
DECISION MEMORANDUM -3 -DECEMBER 20,2022