20180330Decision Memo.pdf

RE:
DECISION MEMORANDUM
TO:COMMI SSIOIVER KJELLAND ER
COMMISSIONER RAPER
COMMIS SIOI\TER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DAITIEL KLEIN
DATE: MARCH 28,2018
FATBEAM'S APPLICATION FOR THE BROADBAIYD EQUIPMENT
TAX CREDIT FOR 2017; CASE NO. FZ4-T-I8-01.
BACKGROIIND
ln 2001, House Bill377 was enacted authorizing income tax credit for the installation of
quali$ing broadband infrastnrcture in Idaho. Idaho Code $ 63-3029B(3)(aXii). In particular,
Section 63-3029I allows a taxpayer to receive an invesfrnent 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 arate of at least 200,000 bits per seconds (bps) to a subscriber and at least
125,000 bps frorn a subscriber." Idaho Code $ 63-3291(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(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 qualified broadband equipment. Procedural
Order No. 28784 and ldoho 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 Idaho Tax Commission.
DECISION MEMORANDUM I MARCH 28,2018
THE APPLICATION
On February 2,2018, the Commission received an Application from Fatbeam, LLC
("Fatbeam" or "Company"), seeking approval of the equipment for the broadband ta,x credit
installed during calendar year 2017. An Amendment to the Application was filed on MarchZ?,
2018 due to the StaJf audit finding an item that should not have been included. In the
Application, Fatbeam states that it installed equipment associated with "Lit Ethernet ..., Dark
Fiber, and a IGB Intemet product". Fatbeam discloses that its broadband network has data
transrnission rates of I CB speed upstream and downstream which exceeds the required rates of
200,000 bits per second to a subscriber and 125,000 bits per second from a subscriber. The
Company asserts that 100% of its Idaho subscribers have access to the broadband network.
Fatbeam invested approximately $2,748,429 in2017 in qualiffing 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 $ 63-3029I(3)(b). 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 Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirming the equipment identified in
Case No. FZ4-T-18-01 is qualified broadband equipment as defined in ldaho Code $
63-30291(3)(b) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/FZ4-T-18-01 2017 Fatbeam LLC Broadband Ta,r Crcdit
i
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DECISION MEMORANDUM a MARCH28,2O18
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