20231031Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
LEGAL
FROM:JOHAN E.KALALA-KASANDA
ADAM TRIPLETT
DATE:OCTOBER 31,2023
RE:IN THE MATTER OF BLACKFOOT COMMUNICATIONS,INC.'S
APPLICATION FOR APPROVAL OF THE IDAHO BROADBANDEQUIPMENTTAXCREDITFORTHEYEAR2022;
CASE NO.FRC-T-23-01.
BACKGROUND
In 2001,House Bill 377 was enacted authorizingincome tax credit for the installation of
qualifying broadband 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
broadband equipment tax credit,an order along with the original Application is forwarded to the
Idaho Tax Commission.
DECISION MEMORANDUM -1 -OCTOBER 31,2023
THE APPLICATION
On August 16,2023,the Commission received an Application from Blackfoot
Communications Inc.("Blackfoot"or "Company"),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.On
October 02,2023,Blackfoot submitted an Amended Application ("Application")to comply with
the new requirements of Commission Order No.35297,which supersedes Commission Order
No.28784.
In the Application,Blackfoot represents that it is a telecommunication carrier that offers
broadband services to its customers that include Asymmetric Digital Subscriber Line'("ADSL"),
Very-high-bit-rateDigital Subscriber Line2 ("VDSL"),Broadband Ethernet,and Wavelength
serviceS3.The broadband services are offered using fiber optic cables with non-loaded copper
distribution,fiber optic transport electronics,fiber optic backbone,and distribution cable.
Blackfoot discloses that the data transmission rate offered to customers ranges from
256,000 bits per second up to 1,000,000,000 bits per second from a subscriber and 768,000 bits
per second up to 1,000,000,000bits per second to a subscriber.These transmission rates exceed
the minimum statutory speed requirements under Idaho Code §63-3029I.Blackfoot also asserts
that it provides broadband services to 97 out of 128 possible customers,which is 76%of possible
subscribers served in Idaho.
Finally,Blackfoot confirms that it invested approximately $121,053 in 2022 in qualifying
broadbandequipment that it confirms is integral to its broadbandnetwork.This qualifies for a
3%broadbandtax credit of approximately $3,631.
'ADSL (Asymmetric Digital Subscriber Line)is a technology that facilitates fast data transmission at a high
bandwidth on existing copper wire telephone lines to homes and businesses.ADSL provides continuously available,
always-on broadband connections.ADSL is asymmetric in that it uses most channels to transmit downstream to the
user and only a small part for uploading information from the user.
2 VDSL or VHDSL (Very High Bitrate DSL)is a DSL technology providingfaster data movement.This works over
a single flat untwisted or twisted pair of copper wires.These fast speeds mean that VDSL can move data for digital
television,as well as telephone services (Voice over IP)and Internet.It can do all these things on a single
connection,using existing wiring used for POTS (Plain Old Telephone Service).
'A Wavelength Service is a large bandwidth connection providinghigh-speed Internet or data service delivered
over lit fiber-opticlines.Wavelength services are used by businesses that are engaged in telecommunications,
wholesale Internet access,or wholesale ISP services to providethe bandwidth capacity needed for customer
applications includingemail,file sharing,web hosting,data backup,video,VOIP,or VPN access
DECISION MEMORANDUM -2 -OCTOBER 31,2023
STAFF REVIEW AND RECOMMENDATION
Staff examined the list of proposed broadbandequipment attached to the Application 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 determining the equipment is qualified broadband equipmentand
forward the approved Order along with a copy of the original Application to the Idaho Tax
Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order determining the broadband equipment
identified in Case No.FRC-T-23-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission?
an E.Kalala-Kasanda
Udmemos/FRC-T-23-01 _Decision Memo Blackfoot Communications,Inc._Broadband Tax Credit
DECISION MEMORANDUM -3 -OCTOBER 31,2023