20220726_jk1rq.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER CHATBURN
COMMISSIONER HAMMOND
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:JOHAN E.KALALA-KASANDA
RILEY NEWTON
DATE:JULY 26,2022
RE:CENTURYTEL OF THE GEM STATE DBA CENTURYLINK'S 2020
BROADBAND EQUIPMENTTAX CREDIT;CASE NO.CGS-T-22-01.
BACKGROUND
In 2001,House Bill 377 was enacted authorizing income tax credit for the installation of
qualifyingbroadband 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 second to a subscriber and at least
125,000 bits per second from a subscriber.Idaho Code §63-3029I(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.Commission Procedural Order No.35297 and Idaho Code §63-3029I(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 State
Tax Commission.
DECISION MEMORANDUM -I -JULY 26,2022
THE APPLICATION
On January 24,2022,the Commission received an application from CenturyTel of the
Gem State,Inc.DBA CenturyLink("CenturyTel"or "Company"),seeking approval of the
equipment for the broadband tax credit installed during the calendar year 2020.On June 21,
2022,the Company submitted an amended application ("Application")to comply with the new
requirements of Commission Order No.35297,which supersedes Commission Order No.28784.
In the Application,CenturyTel represents that it uses terrestrial wireline technology and
has installed broadband equipment associated with various forms of DSL-based equipment
(ADSI &VDSL in various vintages).Data transportation is a mixture of fiber optic and metallic
cable,which typically is also supporting traditional telephony services.Equipment terminals are
located in central office buildings,remote buildings,and in cabinets on concrete pads each
serving a neighborhood.The Company discloses that the lowest broadband network data
transmission rate offered to customers is 500,000 bits per second for downloads and 250,000 bits
per second for uploads.These rates exceed the minimum statutory speed requirements under
Idaho Code §63-30291.Additionally,the Company represents that it provides 1,220 Idaho
customers with broadband service and estimates a total of 2,103 possible Idaho customers to be
served with its broadband network within its designated service areas.CenturyTel states that it
invested $357,202 in 2020 in qualifyingbroadband equipment that it confirms is integral to its
broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff reviewed and audited the list of proposed broadband equipment and believes the
equipment qualifies for the investment tax credit.Staff,therefore,recommends that the
Commission issue an order confirming the equipment is qualified broadband equipment and
forward that order along with a copy of the Application to the Idaho State Tax Commission.
DECISION MEMORANDUM -2 -JULY 26,2022
COMMISSION DECISION
Does the Commission wish to issue an order confirmingthe equipment identified in Case
No.CGS-T-22-01 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward it to the Idaho State Tax Commission?
Johan E.Kalala-Kasanda
Udmemos/COS-T-2201 Decision Memo
DECISIONMEMORANDUM -3 -JULY 26,2022