20240723Decision 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 23, 2024
RE: IN THE MATTER OF FILER MUTUAL TELEPHONE COMPANY'S
APPLICATION FOR THE 2023 BROADBAND EQUIPMENT TAX
CREDIT; CASE NO. FIL-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
§ 63-329I(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(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. Idaho Code § 63-30291(4); Order No. 35297. 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 April 30, 2024, the Commission received an Application from Filer Mutual
Telephone Company dba TruLeap Technologies ("Filer Mutual" or"Applicant"), seeking
approval of the equipment for the broadband tax credit installed during the calendar year 2023.
However, Staff informed the Applicant that the Application was not in conformity with the
requirements of the new Commission Order No. 35297. On June 28, 2024, the Applicant
submitted an amended Application ("Amended Application") containing supplemental
information in compliance with Commission Order No. 35297.
In the Amended Application, the Applicant represented that the broadband services it
offers to its customers are associated with technologies such as point-to-point' and point-to-
multipoint wireless, Gigabit Passive Optical Network("GPON")', XGS Passive Optical Network
("XGS-PON")3, and active Fiber to the X("FTTX')4. The Applicant disclosed that the
transmission rate of its broadband network symmetrically ranges from the lowest of 512 Kilo
bites per second to the highest of 20 gigabytes per second.
The Applicant confirmed that it serves a total of 3,912 Idaho customers with its
broadband services. The availability of these services to the Applicant's total customer base has
remained at ninety-nine percent in the past year. The Applicant also represented that it invested
approximately $1,291,423 in 2023 in qualifying broadband equipment that it confirms is integral
to its broadband network.
' A point-to-point network is a type of network architecture in which only two nodes of each data channel are used
to communicate,as opposed to multipoint networks where each data channel can be used to communicate in a
variety of ways.
2 GPON is a standard for passive optical networks("PON"). GPON is commonly used to implement the outermost
link to the customer(last kilometer or last mile)of Fiber to the Premises services. GPON is a type of fiber-optic
connection that delivers access to a specific network from a supplier to an end user. It is capable of high Gigabit
speeds. GPON replaces the traditional three-tier Ethernet design with a two-tier optic network which eliminates
access and distribution Ethernet switches with passive optical devices.
s XGS-PON is a passive optical network technology that can support higher speed 10 Gbps symmetrical data
transfer. It is an updated standard for PON and is part of the family of standards known as Gigabit-capable PON,or
GPON.
a FTTX is a general term used to describe the deployment of high-speed fiber optic internet connectivity to various
types of buildings or premises. The X in FTTX represents the endpoint where the fiber connection terminates.
DECISION MEMORANDUM - 2 - JULY 23, 2024

STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment and believes the identified
equipment qualifies for the investment tax credit pursuant to Order No. 35297 and Idaho Code §
63-3029I(3)(b). Staff 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. FIL-T-24-01 is qualified broadband equipment as defined in Idaho Code §
63-30291(3)(b) and forward it to the Idaho Tax Commission?
NL6��= V
oha E. Kalala-Kasanda
Commission Staff
L•\Utility\UDMEMOSTIL-T-24-01 Decision Memo.docx
DECISION MEMORANDUM - 3 - JULY 23, 2024