20241029Decision 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: OCTOBER 29, 2024
RE: IN THE MATTER OF FARMERS MUTUAL TELEPHONE COMPANY'S
APPLICATION FOR APPROVAL OF THE IDAHO BROADBAND
EQUIPMENT TAX CREDIT FOR THE TAX YEAR 2023; CASE NO.
FMT-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). Idaho Code §
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 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 State Tax Commission.
DECISION MEMORANDUM - 1 - OCTOBER 29, 2024

THE APPLICATION
On August 15, 2024, the Commission received an Application("Application"), from
Farmers Mutual Telephone Company, ("Company"), seeking Commission determination that the
broadband equipment installed during the calendar year 2023 meets the statutory definition of
qualified broadband equipment. On October 15, 2024, the Company submitted an amended
Application("Amended Application"), revising its assets list in compliance with Commission
Order No. 35297.
In the Application, the Company represented that it is a provider of basic local exchange
service,broadband telecommunications service, and other telecommunications services in
Fruitland and Nu Acres, Idaho. The broadband services it offers to its customers are associated
with fiber to the home, very high-speed digital subscriber line,and That Feel When("TFW")1
services where available.
The Company disclosed that its broadband equipment is capable of transmitting signals at
a rate of 25 Megabits per second("Mbps")to a subscriber and 3Mbps from a subscriber. These
rates exceed the minimum statutory speed requirements under Idaho Code § 63-3029I. The
Company asserted that, during 2023, it served 2813 broadband customers out of 4369 possible
available customers.
Finally, the Company stated that it invested approximately $696,920 in 2023 in
qualifying broadband equipment that it confirms is integral to its broadband network. The three
percent broadband equipment tax credit for this capital investment amounts to $20,907.63.
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.
' This acronym is usually accompanied by a funny or emotive picture,and it's used to provide emotional context or
commentary to a situation.
DECISION MEMORANDUM - 2 - OCTOBER 29, 2024

COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. FMT-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 and Amended Application to the
Idaho State Tax Commission?
an E. Kalala-Kasanda
Commission Staff
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DECISION MEMORANDUM - 3 - OCTOBER 29, 2024