20231024Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
LEGAL
FROM:JOHAN E.KALALA-KASANDA
ADAM TRIPLETT
DATE:OCTOBER 24,2023
RE:IN THE MATTER OF FARMERS MUTUAL TELECOM INC.'S
APPLICATION FOR APPROVAL OF THE IDAHO BROADBAND
EQUIPMENTTAX CREDIT FOR THE YEAR 2022;
CASE NO.FMU-T-23-01.
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 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
§63-3029I(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
broadbandequipment tax credit,an order along with the original Application is forwarded to the
Idaho Tax Commission.
DECISION MEMORANDUM -l -OCTOBER 24,2023
THE APPLICATION
On September 13,2023,the Commission received an Application from Farmers Mutual
Telecom Inc.("FMTI"or "Applicant"),seeking Commission determination that certain
telecommunications equipment,installed during the calendar year 2022,is eligible for the
broadbandinfrastructure tax credit authorized by Section 63-3029I of the Idaho Code.
In the Application,FMTI represents that it is a telecommunications carrier and provides
internet service in the New Plymouthand Payette areas of Idaho.
FMTI asserts that it uses Fiber to the Homel ("FTTH")and Terrestrial Fixed Wireless2
technologies to provide services to its customers.FMTI discloses that its broadband equipment
is capable of transmittingsignals at a rate of at least 25 megabits per second to a subscriber and
at least 3 megabits per second from a subscriber.These rates exceed the minimum statutory
speed requirements under Idaho Code §63-30291.
FMTI also asserts that it provides broadband services to 275 broadband customer
households in portions of New Plymouthand Payette out of the total possible customer
households of 754 and 3081,respectively.
Finally,FMTI confirms that it invested $136,099in 2022 in qualifyingbroadband
equipment that it confirms is integral to its broadband network.This qualifies for a 3%
broadbandtax credit of approximately $4,082.
STAFF REVIEW AND RECOMMENDATION
Staff examined 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
confirmingthe equipment is qualified broadbandequipment and forward the approved Order
along with a copy of the original Application to the Idaho Tax Commission.
I FTTH is a technology that uses optical fiber directly from the central point to the residential premises.It provides
uninterrupted high-speed internet service.The "H"includes both home and small business.
2 With this technology the point-to-pointsignal transmissions occur through the air over a terrestrial microwave
platformrather than through copper or optical fiber;therefore,fixed wireless does not require satellite feeds or local
telephone service.
DECISION MEMORANDUM -2 -OCTOBER 24,2023
COMMISSION DECISION
Does the Commission wish to issue an Order determining the broadband equipment
identified in Case No.FMU-T-23-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission?
Johan E.Kalala-Kasanda
Udmemos/FMU-T-23-01 Decision Memo Farmers Mutual Telecom Inc.Broadband Tax Credit
DECISION MEMORANDUM -3 -OCTOBER 24,2023