20231024Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
LEGAL
FROM:JOHAN E.KALALA-KASANDA
ADAM TRIPLETT
DATE:OCTOBER 24,2023
RE:IN THE MATTER OF FATBEAM,LLC'S APPLICATION FOR THE 2022
BROADBAND EQUIPMENTTAX CREDIT;CASE NO.FZ4-T-23-01.
BACKGROUND
In 2001,House Bill 377 was enacted authorizingincome tax credit for the installation of
qualifying broadbandinfrastructure in Idaho.Idaho Code §63-3029B(3)(a)(ii).Idaho Code §
63-3029I allows a taxpayer to receive an investment tax credit for eligible broadband equipment
installed during a calendar year.
Qualified broadbandequipment is defined as equipment "capable of transmitting signals
at a rate of at least two hundred thousand (200,000)bits per seconds to a subscriber and at least
one hundred thousand twenty-five(125,000)bits per second from a subscriber."Idaho Code §
63-3029I(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 §63-3029I(3)(b)(i).To be eligible for the tax credit,the taxpayer must obtain from
the Commission an Order confirmingthat the installed equipment meets the statutory definition
of qualified broadbandequipment.Commission Order No.35297 and Idaho 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 -1 -OCTOBER 24,2023
THE APPLICATION
On August 25,2023,the Commission received an Amended Application from Fatbeam,
LLC ("Fatbeam "or "Company"),seeking Commission determination that certain
telecommunications equipment,installed during the calendar year 2022,is eligible for the
broadband infrastructure tax credit authorizedby Section 63-30291 of the Idaho Code.On
October 17,2023,Fatbeam submitted an addendum to its Amended Application to comply with
the languageof the new requirements of Commission Order No.35297,which supersedes
Commission Order No.28784.
In the Application,Fatbeam represents that the broadband services it offers to its
customers are associated with fiber optic Wide Area Network ("WAN")and wireless services.
This is carried out using a 100 gigabit ("G")backbone cable network that feeds the broadband
equipment throughoutthe State of Idaho.The customers are fed via direct access fiber,Fiber to
the Homel ("FTTH"),fixed microwave2,or radio setup3 technologies.
Fatbeam states that it offers its services at various transmission rates.For broadband
wireless,the services are transmitted at a rate of 5 G per second to and from a subscriber.For a
fixed microwave,the transmission rate is 1.4 G per second and for FTTH,it is 1 G per second.
The Company asserts that,during 2022,it served 2,000 Idaho residential customers and
275 Idaho non-residential customers.Finally,the Company states that it invested approximately
$2,716,966 in 2022 in qualifyingbroadbandequipment that it confirms is integral to its
broadband network.This qualifies for a 3%broadbandtax credit of approximately $81,508.
FTTH is a technology that uses optical fiber directly from the central point to the residential premises.It provides
uninterrupted high-speed internet service.The "H"includes both home and small business.
2 ÌVÍiCTOWSVC iS a line-of-sightwireless communication technology that uses high frequency beams of radio waves to
providehigh speed wireless connections that can send and receive voice,video,and data information.The
Microwave links are widely used for point-to-pointcommunications because their small wavelengthallows
conveniently sized antennas to direct them in narrow beams,which can be pointed directly at the receivingantenna.
This allows nearby microwave equipment to use the same frequencies without interferingwith each other,as lower
frequency radio waves do.
3 Radio technology is the transmission and detection of communication signals consisting of electromagnetic waves
that travelthrough the air in a straight line or by reflection from the ionosphere or from a communications satellite.
DECISION MEMORANDUM -2 -OCTOBER 24,2023
STAFF REVIEW AND RECOMMENDATION
Staff examined the list of broadband equipment and believes the identified equipment
qualifies for the investment tax credit pursuant to Procedural Order No.35297 and Idaho Code §
63-3029I(3)(b).Staff,therefore,recommends that the Commission issue an Order determining
the equipment is qualified broadband equipment and forward the approved Order along with a
copy of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order determining the broadband equipment
identified in Case No.FZ4-T-23-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission?
Johan E.Kalala-Kasanda
Udmemos/FZ4-T-23-01 Fatbeam,LLC.Broadband Tax Credit
DECISION MEMORANDUM -3 -OCTOBER 24,2023