20200218_dk1jo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DANIEL KLEIN
DATE:FEBRUARY 14,2020
RE:THE 2019 BROADBAND EQUIPMENTTAX CREDIT APPLICATION
FOR ALBION TELEPHONE COMPANY,CASE NO.ALB-T-20-01.
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 63-3029I 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 §63-329I(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 §63-3029I(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 §63-3029I(4).Once the Commission as 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 January 22,2020,the Commission received an Application from Albion Telephone
Company.("Albion"or "Company"),seeking approval of the equipment for the broadband tax
credit installed during calendar year 2019.In the Application,Albion states that it installed
DECISION MEMORANDUM -1 -FEBRUARY 14,2020
equipment associated with Asymmetric Digital Subscriber Line (ADSL),Symmetrical Digital
Subscriber Line (SDSL),and Fiber to the Home (FTTH)service with transmission rates of
3Mbps to lGbps which meets the required rates of 200,000 bits per second to a subscriber and
125,000 bits per second from a subscriber.The Company asserts that 99%of its Idaho
subscribers have access to the broadband network.Albion invested approximately
$1,668,937.24 in 2019 in qualifying broadband equipment that it confirms is integral to the
broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed and audited the list of proposed broadband equipment and believes
the identified equipment qualifies for the investment tax credit pursuant to Procedural Order
No.28784 and Idaho Code §63-3029I(3)(b).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-20-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/ALB-T-20-0 l Albion Broadband Tax Credit dec memo
DECISION MEMORANDUM -2 -FEBRUARY 14,2020