20240715Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: JOHAN E. KALALA-KASANDA
MICHAEL DUVAL, DEPUTY ATTORNEY GENERAL
DATE: JULY 239 2024
RE: IN THE MATTER OF DIRECT COMMUNICATIONS ROCKLAND,
INC.'S APPLICATION FOR THE 2023 BROADBAND EQUIPMENT TAX
CREDIT; CASE NO. DCM-T-24-01.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credit for the installation of
qualifying broadband infrastructure in Idaho. Idaho Code § 63-3029B(3)(a)(ii). In particular,
Section 63-30291 allows a taxpayer to receive an investment tax credit for eligible broadband
equipment installed during a calendar year.
Qualified broadband equipment is defined as equipment "capable of transmitting signals
at a rate of at least two hundred thousand (200,000) bits per second to a subscriber and at least
one hundred twenty-five thousand (125,000) bits per second 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 § 63-3029I(3)(b)(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. Commission Order No. 35297 and Idaho Code § 63-
30291(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 - JULY 23, 2024

THE APPLICATION
On May 28, 2024, the Commission received an Application from Direct Communications
Rockland, Inc., an Idaho corporation("DCR"), seeking approval of the equipment for the
broadband tax credit installed during the calendar year 2023.
In the Application, DCR represented that the broadband services it offers to its customers
are associated with Digital Subscriber Line and ethernet technologies. DCR disclosed that its
broadband network transmits data at a minimum rate of 25,000,000 bits per second ("bps") to a
subscriber and 3,000,000 bps from a subscriber.) These rates are above the minimum statutory
speed requirements pursuant to Idaho Code § 63-3029I. DCR confirmed that it serves 12,162 in
Idaho with sixty-five percent (65%) located in the regulated serving areas and thirty-five percent
(35%) in non-regulated serving areas. DCR also represented that it invested $2,590,961.36 in
2023 in qualifying broadband equipment that it confirmed is integral to its broadband network.
This qualifies for a 3% broadband tax credit for the $2,590,961.36 DCR spent on qualifying
broadband equipment. DCR requested a broadband tax credit of$77,728.84 accordingly.
STAFF REVIEW AND RECOMMENDATION
Staff reviewed the list of broadband equipment submitted by DCR and believes the
identified equipment qualifies for the investment tax credit pursuant to Order No. 35297 and
Idaho Code § 63-3029I(3)(b). Staff, therefore, recommends that the Commission issue an Order
confirming 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 confirming the broadband equipment
identified in Case No. DCM-T-24-01 is qualified broadband equipment as defined in Idaho Code
§ 63-3029I(3)(b) and forward it to the Idaho Tax Commission?
Y 3
d�han E. Kalala-Kasanda
Commission Staff
1:\Uti1ity\UDMEM0S\DCM-T-24-01 Decision Memo.docx
' This is equivalent to 25 megabits per second("mgps")to a subscriber and 3 mgps from a subscriber.
DECISION MEMORANDUM - 2 - JULY 23, 2024