20200612Decision Memo.pdf

RE
DECISION MEMORANDUM
TO COMMISSIONER KIELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: JUNE 10,2020
BLACKT'OOT COMMUNICATIONS, INC. DBA FREMOT{T
COMMUNICATION'S 2OI9 BROADBAND EQUIPMENT TAX CREDIT;
CASE NO. FRC.T.2O-OI.
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in ldaho. Idaho Code 5 63-30298(3)(a)(ii). In particular,
Section 63-30291allows 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 al a rate of at least 200,000 bits per seconds (bps) to a subscriber and at leasr
125,000 bps from a subscriber;' Idaho Code $ 63-3291(3Xb). If the equipment is installed hy a
telecommunications carrier, it must also be "necessary to the provision of broadband services
and an integral part of a broadhand network." Idaho Code $ 63-3029I(3XbXi). To be eligible
for the tax credit, the taxpayer must obtain from the Commission an Ordcr confirming that the
installed equipment meets the statutory definition of qualified broadband equipment. Procedural
Order No. 28784 and ldaho Code b 63-30291(4). Once the Commission has determined the
installed equipment is eligible for the broadband equipment tax credit, an ordcr along with the
original Application is forwarded to the Idaho Tzrx Commission.
DECISION MEMORANDUM JUNE 10,2020
THE APPLICATION
On May 28,2020, the Commission received an Application from Blackfoot
communications, Inc. dba Fremont communications (..Blackfoot,'or,,comp&[],'), seeking
approval of the equipment for the broadband tax credit installed during calendar year 2019. In
the Application, Blackfoot states that it installed equipment associated with Asymmetric Digital
Subscriber Line (ADSL), Very-high-bit-rate Digiral Subscriber Line (VDSL), Broadband
Ethernet and Ethernet broadband services (using l8k non-loaded copper distribution, fiber optic
backbone and distribution cable). Blackfoot discloses that its broadband network has data
transmission rates of 256Kbps to I Mbps from a subscriber and 768 Kbps to I Mbps tn a
subscriber which meets the required rates of 200,000 bits per second to a subscriber and I25,000
bits per second from a subscriber. The Company asserts that,767o of its Idaho customers have
broadband services. Blackfoot invested approximately $158,421 in 2019 in qualifying
broadband 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 ldaho Code $ 63-3o291(3Xb). Stafl therefore, recommends rhar rhe Commission
issue an Order confirming the equipment is qualified broadband equipment and forward rhe
approving Order along with a copy of the original Application to the ldaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identilied in
Case No. FRC-T-20-01 is qualified broadband equipment as defined in ldaho Code
$ 63-30291(3Xb) and forward it to the ldaho Tax Commission?
Daniel Klein
Udnrrrros/FRC-T-20-0I 20I7 Blackltror Broadband 'l ar Credir dcc memo
DECISION MEMORANDUM _) _JUNE 9,2A2A