20150316_4608.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:MARCH II,2015
RE:TW TELECOM OF IDAHO LLC’S 2012 BROADBAND EQUIPMENT
TAX CREDIT APPLICATION;CASE NO.TWT-T-14-O1.
BACKGROUND
In 2001,I-louse 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 delined 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)(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 February 18,2014,the Commission received an Application from 1w Telecom of
Idaho lIc (“Tw Telecom”or “Company”)seeking approval of equipment for the broadband tax
credit.On August 8,2014,the Company amended the Application.With this Application,Tw
DECISION MEMORANDUM -1-MARCH 11,2015
Telecom states that it installed equipment associated with “private fiber optic based network
which uses Sonet,Ethernet and Dense Wavelength Division Multiplexing (DWDM)technology.
Tw telecom installed broadband equipment in Ada,Bannock,Bingham,Bonneville,Canyon,
Kootenai,Madison,Minidoka,Nez Perce and Power counties.The Company states that its
broadband network provides transmission rates of 1.5 Mbps to 10Gbps and asserts that the tw
Telecom’s network can provide broadband service to all of its Idaho business customers.During
2012,the Company invested approximately $3.5 Million in qualifying broadband equipment.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Tw Telecom
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.”Staflç therefore,recommends that the Commission issue an Order confirming the
equipment is qualified broadband equipment and fonvard 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.TWT-T-14-0l is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
/Q
brace Seaman
Udmemos/tvt-t-4-UI blc dcc memo
DECISION MEMORANDUM -2 -MARCH 11,2015