20170526Decision Memo.pdf

RE:
DECISION MEMORANDTJM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMTVIISSIONER ANI}ERSON
COMMISSION SECRETARY
LEGAL
WORKING F'ILE
FROM: GRACE SEAMAIY
DATE: MAY 12,2017
BLACKFOOT COMMUNTCATTONS, rNC. DBA FREMONT
CoMMUNTCATTONS' 2016 BROADBAND EQUTPMENT TAX CREDIT
APPLICATION; CASE NO. FRC-T-17-01
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in ldaho. Idaho Code 5 63-30298(3XaXiD. 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 (bps) to a subscriber and at least
125,000 bps from a subscriber;' Idaho Code $ 63-3029(3Xb). 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 nstwork." Idaho Code $ 63-30291(3XbXi). 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 qualifred broadband equipment. Procedural
OrderNo. 28784 and ldaho 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 ldaho Ta;< Commission.
THE APPLICATION
On April 3,2017, Blackfoot Communications,Inc. dba Fremont Communications
('Fremont" or "Company") filed an Application with the Commission seeking approval of
DECISION MEMORAT.IDUM MAY 12,20t7
equipment for the broadband tax credit for calendar year 2016. Fremont states in the Application
that it installed equipment associated with Asymmetric Digital Subscriber Line (ADSL) and
Ethemet broadband services (using l8k non-loaded copper distribution, fiber optic backbone and
distribution cable). The network is capable of providing transmission speeds of 256 Kbps to I
Mbps from a subscriber and 768 Kbps to I Mbps to a subscriber. The Company states that 39%
of its custorners have broadband services. Fremont invested approximately $3 15,000 in
broadband equipment in 2016.
STAFF' REVIEW AND RECOMMENDATION
Staffhas reviewed 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(3Xb). Statr also believes that the expenditures identified by the
Company, a telecommunications provider, were lor equipment that is "necessary for the
provision of broadband services and an integral part of a broadband network." See A. Seltzer
E-Mail, May 5,2017. Stafl 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 ldaho Ta:< Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order conlirming the equipment identified in Case
No. FRC-T-I7-01 is qualifred broadband equipment as defined in ldaho Code $ 63-3029I(3Xb)
and forward it to the ldaho Ta.x Commission?
{-C(-Cl
Grace Searnan
Udmcmos/frc.t. l?.01 dcc mcmo
2DECISION MEMORANDUM MAY 72,20t7