20150427_4656.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:APRIL 23,2015
RE:FIRST STEP INTERNET,LLC’S BROADBAND EQUIPMENT TAX
CREDIT APPLICATION FOR CALENDAR YEARS 2006-2013;
CASE NO.FSI-T-15-01.
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 o 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 sen’ices
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 fonvarded to the Idaho Tax Commission.
THE APPLICATION
On January 13,2015,the Commission received an Application from First Step Internet,
LLC (“First Step”or “Company”)seeking approval of equipment for the broadband tax credit
DECISION MEMORANDUM -I -APRIL 23,2015
for calendar years 2006 through 2013.In the Application,First Step states that it installed
equipment associated with Ethernet,digital subscriber line (DSL),frame relay,and fixed
wireless services with transmission rates of one (1)Mbps to one (1)Gbps.Investments were
made in and around the Moscow,Lewiston,Deary,Troy,Bovill,Genesee,Potlatch,Orofino
exchanges.First Step asserts that its broadband service is available to approximately 27,000
residents.During the eight years,the Company invested approximately $2,237,300.The annual
investments are listed below:
Year Investment Year Investment
2006 $12,095 2010 $33,094
2007 $30,047 2011 $1,097,665
2008 $23,150 2012 $620,923
2009 $90,483 2013 $329,847
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by First Step 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 fixed wireless service provider,were for equipment that is
“necessary for the provision of broadband services and an integral part of a broadband network.”
Staffç 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.FSI-T-l5-01 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b),
and forward it to the Idaho Tax Commission?
/M
Grace Seaman
Udcmemos/fsi-E-15-Oi broadband dcc memo
DECISION MEMORANDUM -2-APRIL 23,2015