20100505_2934.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEG AL
WORKING FILE
FROM:GRACE SEAMAN
DATE:APRIL 28, 2010
RE:ALBION TELEPHONE COMPANY'S 2009 BROADBAND EQUIPMENT
TAX CREDIT APPLICATION; CASE NO. ALB-I0-01.
BACKGROUND
In 2001 , House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code 9 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 seconds (bps) to a subscriber and at least
125 000 bps from a subscriber. Idaho Code 963-3029I(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 9 63-3029I(3)(b)(i). 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 Idaho Code 9 63-30291(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 Tax Commission.
THE APPLICATION
On March 3 , 2010, the Commission received an Application from Albion Telephone
Company dba A TC Communications (A TC) seeking approval of equipment for the broadband
DECISION MEMORANDUM - 1 -APRIL 28 2010
tax credit. In the Application, A TC lists the broadband investments made during calendar year
2009 in the Idaho counties of Butte, Cassia, Custer, and Oneida. A TC indicates that during
2009, the Company added 19 miles of copper and 21 miles of fiber cable; installed Fujitsu fiber
terminals for backhaul and several brands of Digital Loop Carriers including AFC, Telstrat, SRS
Adtran, and Calix. A TC states it provides various subscriber line services (ADSL, IDSL, HDSL
and SDSL) to its customers at network transmission rates of 256 Kbps to 6 Mbps. A TC reports
that it added the capacity to provide broadband service to 162 new customers in 2009. The A
2009 broadband investment is approximately $820 000.
ST AFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of pr~posed broadband equipment submitted by A TC and
believes that it qualifies for the investment tax credit pursuant to Procedural Order No. 28784
and Idaho Code 9 63-3029I(3)(b). Further, Staff believes that the expenditures indentified by
A TC, a telecommunications provider, were for equipment that is "necessary for the provision of
broadband services and an integral part of a broadband network," Staff, therefore, recommends
acceptance of the Application and further recommends that the Commission forward the
approving Order along with a copy of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. ALB-I0-0l is qualified broadband equipment as defined in Idaho Code 9 63-3029I(3)(b)(i),
and forward it to the Idaho Tax Commission?
(LU' ttU~LaA/L-
Grace Seaman
udmemosl Albion 2009 Broadband Tax Credit dec memo
DECISION MEMORANDUM - 2 -APRIL 28 2010