20170324Decision Memo.pdf

RE:
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DECISION MEMORAIYDI'M
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARV
LEGAL
WORKING F'ILE
FROM:GRACE SEAMAN
MARCH 24,20t7DATE:
f,'ATBEAM LLC'S 2016 BROADBAND EQUIPMENT TAX CREDIT
APPLICATION; CASE NO. FZA:f -n41.
BACKGROI.JND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
quali$ing broadband infrastrucrure in ldaho. Idaho Code $ 63-30298(3XaXiD. 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 at a rate of at least 200,000 bits per seconds (bps) to a subscriber and at least
125,000 bps from a subscriber. Idaho Code $ 63-30291(3)(b). tf 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 $ 63-3029(3XbXi). To be eligible
for the tax credit, the taxpayer must obtain from the Commission an Order confirming that the
installed equiprnent meets the statutory definition of qualified broadband equipment. Procedural
Order No. 28784 and ldaho Code $ 63-30291(4). Once the Commission has determined the
itemized equipment is eligible for the broadband equipment tax credit, an order along with the
original Application is fonuarded to the ldaho Ta,r Commission.
THE APPLICATION
On January 19,2A17, the Commission received an Application from Fatbeam, LLC
("Fatbeam" or "Company") seeking approval of equipment for the broadband tax credit for
calendar year 2016. In the Application, Fatbeam states that it installed equipment associated
DECISION MEMORANDUM I MARCH 24,2017
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with Lit Ethernet and dark fiber services with minimum transmission rates of one (l) Gigabits
per second (Gbps); significantly faster than the transmission rates required in ldaho Code $ 63-
3029(3Xb). In a subsequent email received on March23,20l7, the Company affirms "that all
of the expenses listed on our ldatro Broadband Tax Credit application are an integral part of our
networks." Fatbeam specifies that it deployed broadband services in Bingham, Bonner,
Kootenai, Power, and Twin Falls counties and asserts that 100% of its customers can be served
by ths broadband network. During 2016, Fatbeam invested approximately $2,316,515 in
qualifying broadband equipment.
STAFF REVIEW AND RECOMMENDATION
Staffhas reviewed 0re list of proposed broadband equipment submitted by Fatbeam and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
OrderNo. 28784 and ldaho Code $ 63-30291(3)OXi). StaJf also believes that the expenditures
identifred by the Company, a telecommunications services provider,l were for equipment that is
"necessary for the provision of broadband services and an integral part of a broadband network."
Stafl therefore, recommends that the Commission issue an Order confirming the equipment is
qualified broadband equipment and forward the approving Order along with the a copy of the
original Application to the Idaho Tax Commission.
COMMISSION DECISION
Docs the Commission wish to issue an order confirming the equipment identified in this
Application is qualifred broadband equipment as defined in ldatro Code $ 63-30291(3)(b), and
forward it to the Idaho Tor Commission?
a
Grace Seaman
Udmcmos/fz4*-t 7.0 I dcc mcmo
I See August 16, 2010 Letter, giving notice that Fatbeam provides "telecommunications services other lhan basic
local exchange services and interexchange MTS./\MATS long distance services in the state of ldaho."
DECISION MEMORANDUM 2 MARCH 24,2017