20160829_5051.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER R&PER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:AUGUST 24,2016
RE:QWEST CORPORATION DBA CENTURYLINK QC’S 2015
BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
CASE NO.QVE-T-16-05.
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 §63-30291(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 August 8,2016,Qwest Corporation dba CenturyLink QC (“CenturyLink”or
“Company”)filed an Application seeking Commission approval of equipment for the broadband
DECISION MEMORANDUM -1 -AUGUST 24,2016
tax credit for calendar year 2015.CenturyLink states in the Application that it installed
equipment associated with various forms of DSL-based broadband services (ADSL-Asymmetric
Digital Subscriber Line and VDSL-Very-high-data-rate Digital Subscriber Line),using a mix of
fiber and metallic cable transport,in 57 Idaho exchanges.The Company provided the following
details.
Transmission Rates Investment Retirements Net Investment2
256 Kbps—4OMbps 95 $24,488,181 ($946,468)$23,541,713
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment and believes the itemized
expenses,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.QWE-T-16-05 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b)
and forward it to the Idaho Tax Commission?
/ft Q
‘Grace Seaman
Udmemos/qwe-t-16-05 dcc memo
The percentage of living units (Street addresses)where the Company might send a bill and where wireline plant is
nearby.This figure represents the %of working qualified living units where DSL-based service could be
provisioned in a short timeframe.
2 Net Investment ($24,488,181)minus Idaho Broadband Retirements ($946,468).
DECISION MEMORANDUM -2-AUGUST 24,2016