20200522Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER I(IELLAI\IDER
COMMISSIONER RAPER
COMMISSIONER AI\IDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM: DANIEL KLEIN
DATE: MAY 22,2020
RE:THE 2019 BROADBAI\D EQUIPMENT TAX CREDIT APPLICATION
FOR FATBEAM, LLC; CASE NO. FZ4-T-20-01.
BACKGROTJI\ID
ln 2001, House Bill377 was enacted authorizing income tax credit for the installation of
qualiffing broadband infrastructure in Idaho. Idaho Code $ 63-30298(3XaXii). 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 $ 63-329(3Xb). 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'Xb)(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
OrderNo. 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 Idaho Tax Commission.
DECISION MEMORANDUM I MAY 22,2020
THE APPLICATION
On April 2L,2020, the Commission received an Application from Fatbeam, LLC
("Fatbeam" or "Company"), seeking approval of the equipment for the broadband tax credit
installed during calendar year 2019. In the Application, Fatbeam states that it installed
equipment associated with "Lit Ethernet ...Dark Fiber, and a lGB lnternet 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
$2,844,778.83 in 2019 n qualiffing broadband equipment that it confirms is integral to the
broadband network.
STAFF REVIEW AI\D RECOMMENDATION
Staffhas 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 Idaho Code $ 63-3029I(3Xb). Staft 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-20-01 is qualified broadband equipment as defined in ldaho Code
$ 63-3029(3)(b) and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/FZ4-T-20-01 Fatbcanu LLC Broadband Tax Credit
DECISION MEMORANDUM -2-MAY 22,2020