20140331_4325.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:MARCH 25,2014
RE:ALBION TELEPHONE COMPANY’S 2013 BROADBAND EQUIPMENT
TAX CREDIT APPLICATION;CASE NO.ALB-T-14-01.
BACKGROUND
In 2001,I-louse Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho.Idaho Cot/c §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 §63-30291(3)(b)O).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 March 20,2014,Albion Telephone Company dba ATC Communications (“ATC”or
“Company”)filed an Application seeking Commission approval of equipment for the broadband
DECISION MEMORANDUM -I -MARCH 25,2014
tax credit.In the Application,ATC lists the broadband investments made during calendar year
2013.These investments were made in Butte,Cassia,Custer,and Oneida Counties.ATC states
that it continued to “deploy fiber in the loop,install Digital Loop Carrier systems with 12,000-
foot loops and develop a fiber backbone that will have the ability to handle huge amounts of
data.”During 2013,the Company “added ten miles of copper and duct and 137 miles of fiber
cable and duct.”ATC states that it provides various subscriber line services (ADSL,IDSL,
HDSL,and SDSL)to its customers at network transmission rates of 1.5 Mbps to 20 Mbps and
the service is available to 99%of its customers.The ATC 2013 broadband investment is
approximately $2 million.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by ATC and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No.28784 and Idaho Code §63-30291(3)(b).Staff 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 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-T-14-01 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
/•d’Lcc
Grace Seaman
i:udmemos/atc 2013 btc dcc mcmo
DECISION MEMORANDUM -2 -MARCH 25,2014