20240917Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER ANDERSON
COMMISSIONER HAMMOND
COMMISSIONER LODGE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: JOHAN E. KALALA-KASANDA
CHRIS BURDIN, DEPUTY ATTORNEY GENERAL
DATE: SEPTEMBER 24, 2024
RE: IN THE MATTER OF FATBEAM, LLC'S APPLICATION FOR
APPROVAL OF THE IDAHO BROADBAND EQUIPMENT TAX CREDIT
FOR THE TAX YEAR 2023; CASE NO. FZ4-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 63-3029I allows a taxpayer to receive an investment tax credit for eligible broadband
equipment installed during a calendar year.
Qualified broadband equipment is defined as 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 §
63-3029I(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 confirming that the installed equipment meets the statutory definition
of qualified broadband equipment. Commission Order No. 35297; 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 State
Tax Commission.
DECISION MEMORANDUM - 1 - SEPTEMBER 24, 2024

THE APPLICATION
On July 29, 2024, the Commission received an Application, with a cover letter, from
Fatbeam, LLC ("Fatbeam" or"Company"), seeking Commission determination that the
broadband equipment installed during the calendar year 2023 meets the statutory definition of
qualified broadband equipment. On August 13, 2024, the Company submitted an Addendum to
its Application, revising its assets list in compliance with Commission Order No. 35297.
In the Application, the Company represented that the broadband services it offers to its
customers are associated with fiber optic Wide Area Network("WAN") and wireless services. It
operates a 100G backbone network.' This feeds the broadband equipment throughout the state
of Idaho. The customers are fed via direct access fiber, fiber to the home ("FTTH"), fixed
microwave, or broadband radio setups.
The Company disclosed that it has a transmission rate that ranges from 5G down/ 5G up
to 30G down/ 5G up on broadband wireless, up to 1 AG sync on fixed microwave, 1 G sync on
FTTH, and beyond with direct fiber. The Company represented that these rates exceed the
minimum statutory speed requirements under Idaho Code § 63-30291.
The Company asserted that, during 2023, it served 2,000 Idaho residential customers and
299 Idaho non-residential customers. Finally, the Company stated that it invested approximately
$10,869,234.54 in 2023 in qualifying broadband equipment that it asserted is integral to its
broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff examined the list of the proposed broadband equipment and believes the equipment
qualifies for the investment tax credit pursuant to Commission Order No. 35297 and Idaho Code
§ 63-30291(3)(b). Staff recommends that the Commission issue an order confirming the listed
equipment is qualified broadband equipment and forward that order along with a copy of the
Application to the Idaho State Tax Commission.
The internet backbone is made up of the fastest routers,which can deliver 100Gbps(gigabits per second)trunk
speeds. These routers are made by vendors including Cisco,Extreme,Huawei,Juniper,and Nokia,and use the
border gateway protocol(BGP)to route traffic among themselves.
DECISION MEMORANDUM - 2 - SEPTEMBER 24, 2024

COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. FZ4-T-24-01 is qualified broadband equipment as defined in Idaho Code § 63-3029I(3)(b)
and forward that order along with a copy of the Application to the Idaho State Tax Commission.
i
Johan E. Kalala-Kasanda
Commission Staff
1:\Uti1ity\UDMEM0STZ4-T-24-01 Decision Memo.docx
DECISION MEMORANDUM - 3 - SEPTEMBER 24, 2024