20190315Decision Memo.pdf

DBCISION MBMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORIilNG FILE
FROM: DANIEL KLEIN
DATE: MARCH 12,2019
RE:THE 2OI8 BROADBAND EQUIPMENT TAX CREDIT APPLICATION
FOR FATBEAM, LLC, CASE NO. FZ4.T.19.OI.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifuing broadband infrastructure in Idaho. Idaho Code $ 63-30298(3)(aXii). 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 "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 $ 63-3291(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(3xb)(i). 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 $ 63-3029I(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 MARCH 12,2OT9-l-
THE APPLICATION
On February 4,2019, the Commission received an Application from Fatbeam,LLC
("Fatbeam" or "Comp&hy"), seeking approval of the equipment for the broadband tax credit
installed during calendar year 2018. An Amendment to the Application was filed on March 1 l,
2019 correcting some missing information. In the Application, Fatbeam states that it installed
equipment associated with "Lit Ethernet ...,Dark Fiber, and a IGB Internet product". Fatbeam
discloses that its broadband network has data transmission rates of IGB 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 l00o/o of its Idaho
subscribers have access to the broadband network. Fatbeam invested approximately
$3,495,234.82 during 2018 in qualifying broadband equipment that it confirms is integral to the
broadband network.
STAFF REVIEW AND RECOMMBNDATION
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 $ 63-30291(3Xb). Staff, 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 conf'rrming the equipment identified
in Case No. FZ4-T-19-01 is qualified broadband equipment as defined in ldaho Code
$ 63-30291(3Xb) and forward it to the Idaho Tax Commission?
Udnremos/FZ4-T- I 9-0 I 20 I 8 Fatbeam LLC Broadband Tax Credit
DECISION MEMORANDUM -2-
Daniel Klein
MARCH 12,2AI9