20180615Decision Memo.pdf

RE:
DECISION MEMORANDI.IM
TO:COMMISSIONER KJELLA}IDER
COMMISSIONER RAPER
COMMISSIODI-ER AI\IDERSON
COMIVISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: JUhIE 13,2018
FREMONT TELECOM'S 2017 BROADBAND EQUIPMENT TAX
CREDIT; CASE NO. FRE-T-18-01
BACKGROUND
In 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualifting broadband infrastructure in ldaho. Idoho Codc $ 63-30298(3XaXii). In particular,
Section 63-3029I allows a taxpayer to receive an investnent tax credit for eligible broadband
equipment installed during a calendar year.
Qualified broadband equipment is defined as "those network facilities capable of
transmitting signals atarute of at least 200,000 bits per seconds (bps) to a subscriber and at least
125,000 bps from a subscriber;' Idaho Code $ 53-3291(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)(D. 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. Procedural
Order No. 28784 and ldaho Code $ 63-30291(4). Once the Commission as determined the
installed equipment is eligible for the broadband equipment tax credit, an order along with the
original Application is forwarded to the ldaho Tax Commission.
IDECISION MEMORANDUM JLINE 13,2OI8
TIIE APPLICATION
On April 24,2018, the Commission received an Application from Fremont Telecom
("Fremont" or "Company"), seeking approval ofthe equipment for the broadband tax credit
installed during calendar year 2017. In the Application, Fremont states that it installed
equiprnent associated with Asymmetric Digital Subscriber Line (ADSL) and Ethemet broadband
services (using l8k non-loaded copper distribution, fiber optic backbone and distribution cable).
Fremont discloses that irc broadband network has data transmission rates of 256Kbps to 1 Mbps
from a subscriber and 768 Kbps to 1 Mbps to a subscriber which meets the required rates of
200,000 bits per second to a subscriber and 125,000 bits per second from a subscriber. The
Company asserts that7l% of its ldaho customers have broadband services. Fremont invested
approximately $1,130,893 in2017 in qualifying broadband equipment that it confirms is integral
to the broadband network
STAFF REVIEW A}[D 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 $ 63-3029I(3Xb). Safq therefore, recommends that the Commission
issue an Order confrming the equipment is qualified broadband equipment and forward the
approving Order along with a copy of the original Application to the Idatro Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. FRE-T-18-01 is qualified broadband equipment as defined in ldaho Code $
63-30291(3)(b) and forward it to the Idaho'I'ax Commission?
Daniel Klein
Udmemos/FRE-T- l 8-01 2017 Frernont Broadband Tar Credit
DECISION MEMORANDUM JLINE 13,2018