20230523_DCMT2301_jkmd.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
LEGAL
FROM:JOHAN E.KALALA-KASANDA
MICHAEL DUVAL
DATE:MAY 23,2023
RE:IN THE MATTER OF DIRECT COMMUNICATIONS ROCKLAND,
INC.'S APPLICATION FOR THE 2022 BROADBAND EQUIPMENTTAXCREDIT;CASE NO.DCM-T-23-01.
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 equipment "capable of transmitting signals
at a rate of at least two hundred thousand (200,000)bits per second to a subscriber and at least
one hundred thousand twenty-five(125,000)bits per second 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 confirmingthat the installed equipment meets the statutory definition
of qualified broadband equipment.Commission 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 Tax Commission.
DECISION MEMORANDUM -1 -MAY 23,2023
THE APPLICATION
On March 31,2023,the Commission received an Application from Direct
Communications Rockland,Inc.,an Idaho corporation ("DCR"or "Applicant"),seeking
approval of the equipment for the broadband tax credit installed during the calendar year 2022.
However,Staff informed DCR that the Application was not in conformitywith the requirements
of the new Commission Order No.35297.On April 13,2023,DCR submitted supplemental
information to its Application in compliance with Commission Order No.35297.
In the Application,DCR represents that the broadband services it offers to its customers
are associated with Digital Subscriber Line (DSL)and ethernet technologies.DCR disclosed
that its broadband network transmits data at a minimum rate of 25,000,000 bits per second
("bps")to a subscriber and 3,000,000 bps from a subscriber.These rates are above the minimum
statutory speed requirements pursuant to Idaho Code §63-30291.DCR asserts that it serves
8,349 in Idaho with ninety percent located in the regulated serving areas and twentypercent in
non-regulatedserving areas.DCR also represents that it invested approximately $5,426,871 in
2022 in qualifying broadband equipment that it confirms is integral to the broadband network.
This qualifies for a 3%broadband tax credit of $162,806.13.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment and believes the identified
equipment qualifies for the investment tax credit pursuant to Procedural Order No.35297 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 approved 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 broadband equipment
identified in Case No.DCM-T-23-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commis ¯on?
Johan E.Kalala-Kasanda
Udmemos/DCM-T-23-01 Direct Communications Rockland,Inc Broadband Tax Credit
DECISION MEMORANDUM -2 -MAY 23,2023