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HomeMy WebLinkAbout20130610_4068.pdfDECISION MEMORANDUM TO:COMMISSIONER KJELLANDER COMMISSIONER REDFORD COMMISSIONER SMITH COMMISSION SECRETARY LEGAL WORKING FILE FROM;GRACE SEAMAN DATE:MAY 31,2013 RE;CUSTER TELEPHONE COOPERATIVE,INC.’S 2012 BROADBAND EQUIPMENT TAX CREDIT APPLICATION;CASE NO.CUS-T-I3-01. 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 63-30291 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 §63-30291(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 §63-3029l(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 §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 May 29,2013,the Commission received an Application from Custer Telephone Cooperative,Inc.(“Custer”or “Company”)seeking approval of equipment for the broadband tax credit.In the Application,Custer states that it installed equipment associated with Asymmetric DECISION MEMORANDUM -I -MAY 31,2013 Digital Subscriber Line (ADSL)and Symmetrical Digital Subscriber Line (SDSL)services with transmission rates of 256 Kbps to 10Mbps from a subscriber and 256 Kbps to 50Mbps to a subscriber.Custer lists broadband equipment that was installed in the May,Challis and Clayton exchanges.The Company asserts that approximately 78%of its customers in these exchanges can be served by the broadband network.During 2012,the Company invested approximately $485,000 in qualifying broadband equipment. STAFF REVIEW AND RECOMMENDATION Staff has reviewed the list of proposed broadband equipment submitted by Custer and believes the identified equipment qualities for the investment tax credit pursuant to Procedural Order No.28784 and Idaho Code §63-3029l(3)(b).Stafl’also believes that the expenditures identified by the Company,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 that the Commission issue an Order confirming the equipment is qualified broadband equipment and forward the approving Order along with the 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.CUS-T-13-OI is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b), and forward it to the Idaho Tax Commission? 4 (C 4 d race Seaman Udmcmos/cus-t-13-01 blc dcc memo DECISIONMEMOR&NDUM -2-MAY3I,2013