20201231Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DANIEL KLEIN
DATE:DECEMBER 30,2020
RE:THE 2016 BROADBAND EQUIPMENTTAX CREDIT APPLICATION
FOR FARMERS MUTUAL TELECOM,INC;CASE NO.FMU-T-20-01.
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 63-3029I 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 taxpayermust 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.
DECISION MEMORANDUM -1 -DECEMBER 30,2020
THE APPLICATION
On December 10,2020,the Commission received an Application from Farmers Mutual
Telephone Company,LTD ("Farmers"or "Company"),seeking approval of the equipment for
the broadband tax credit installed during calendar year 2016.In the Application,Farmers states
that it installed equipment associated with Fiber to the Home (FTTH)and Terrestrial Fixed
Wireless (TFW)service with transmission rates of 10 Mbps downstream and 1 Mbps upstream,
which exceeds 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 more than 3%of its Idaho subscribers have
access to the broadband network.The Company invested approximately $52,539.91 in 2016 in
qualifyingbroadband 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 confirmingthe equipment identified in Case
No.FMU-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/FMU-T-20-01 2016 Farmers Mutual Telecom Broadband Tax Credit
DECISION MEMORANDUM -2 -DECEMBER 30,2020