20160926_5074.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:SEPTEMBER 21,2016
RE:POTLATCH TELEPHONE COMPANY DBA TDS TELECOM’S
2015 BROADBAND EQUIPMENT TAX CREDIT APPLICATION;
CASE NO.POT-T-16-0I.
BACKGROUND
In 2001,House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho.Ida/jo Code §63-3029B(3)(a)Oi).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.
DECISION MEMORANDUM 1 SEPTEMBER 21,2016
THE APPLICATION
On September 12,2016,the Commission received an Application from Potlatch
Telephone Company dba TDS Telecom (“TDS”or “Company”)seeking approval of equipment
for the broadband tax credit for calendar year 2015.In the Application,TDS states that it
installed equipment associated with Digital Subscriber Line (“DSL”)services in the Juliaetta,
Kendrick,and Troy exchanges.The Company confirms in an email response that the
transmission speeds are well above the minimum rates of 200 Kbps to and 125 Kbps from a
subscriber,and in general range from 18 to 25 Mbps.TDS asserts that approximately 94%of its
customers in Idaho can access the broadband network.The Company lists 2015 investments of
approximately S282,000 in quali’ing broadband equipment.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by TDS and
believes the identified equipment 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 the 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.POT-T-16-01 is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),
and forward it to the Idaho Tax Commission?
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Grace Seaman
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DECISION MEMORANDUM 2 SEPTEMBER 21,2016