20220906Decision Memo.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER ANDERSON COMMISSIONER CHA THURN COMMISSIONER HAMMOND COMMISSION SECRET ARY LEGAL WORKING FILE
JOHAN E. KALALA-KASANDA RILEY NEWTON
SEPTEMBER 6, 2022
FARMERS MUTUAL TELECOM INC.'S 2021 BROADBAND EQUIPMENT TAX CREDIT; CASE NO. FMU-T-22-01.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credits 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 second to a subscriber and at least
125,000 bits per second 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. Commission Procedural Order No. 35297 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 State
Tax Commission.
DECISION MEMORANDUM - 1 -SEPTEMBER 6, 2022
THE APPLICATION
On July 18,2022,the Commission received an application from Farmers Mutual
Telecom Inc.("FMTI"or "Applicant"or "Company"),seeking Commission certification that
certain telecommunications equipment,installed during the calendar year 2021,is eligible for the
broadband infrastructure tax credit authorized by Section 63-30291,Idaho Code.
In the Application,FMTI represents that it installed the qualified broadband equipment in
the New Plymouth and Payette areas of Idaho.It uses terrestrial fixed wireless and Fiber To The
Home (FTTH)technologies to provide uninterrupted high-speed internet service and has
installed broadband equipment associated with various forms of DSL-based equipment (VDSL
in various vintages).Data transportation is a mixture of fiber optic and metallic cable,which
typically is also supporting traditional telephony services.The Company discloses that the
lowest broadband network data transmission rate offered to customers is 25 megabits per second
(Mbps)to a subscriber and 3 megabits per second from a subscriber.These rates exceed the
minimum statutory speed requirements under Idaho Code §63-30291.FMTI also states that it
provides broadband services to 216 Idaho households in portions of New Plymouth and Payette
with total households of 754 and 3081,respectively.
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.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No.FMU-T-22-01 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward to the Idaho State Tax Commission?
ohan E.Kalala-Kasanda
Udmemos/FMU-T-22-01 Decision Memo
DECISION MEMORANDUM -2 -SEPTEMBER 6,2022