20151005_4785.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER R4PER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:OCTOBER 1,2015
RE:QWEST CORPORATION UBA CENTURYLINK QC’S 2014
BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
CASE NO.QWE-T-15-O5.
BACKGROUND
In 2001,I-louse 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.”Ida/ia 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 delinition 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 September 9,2015,Qwest Corporation dba CenturyLink QC (“CenturyLink”or
“Company”)filed an Application with the Commission seeking approval of equipment for the
DECISION MEMORANDUM -1 -OCTOBER 1,2015
broadband tax credit for calendar year 2014.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 58 Idaho exchanges.The Company provided
the following details:
Transmission Rates %I Investment Retirements Net Investment2
256 Kbps—4OMbps 94 $26,659,885 ($1,256,636)$25,384,234
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment and believes the identified
items,minus the “Land/Building”entries,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-15-O5 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward it to the Idaho Tax Commission?
I/M c Lf
Grace Seaman
Udmemos/qwe-I-I5-O5bIe 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-bused service could be
provisioned in a short timeframe.
2 Net Investment ($25,403,249)minus Land/Building entries for Boise ($8,062),CaIdwell ($1,297),Idaho Falls
($3,235),Pocatello ($3,186),and Twin Falls ($3,235):$25,403,249 -$19,015 =525,384,234.
DECISION MEMORANDUM -2-OCTOBER 1,2015