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 TELECOM
INC.'S APPLICATION FOR APPROVAL OF THE IDAHO BROADBAND
EQUIPMENT TAX CREDIT FOR THE TAX YEAR 2023;
CASE NO. FMU-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, with a cover letter, from
Farmers Mutual Telecom Inc. ("FMTI"), seeking Commission determination that the broadband
equipment installed during the calendar year 2023 meets the statutory definition of qualified
broadband equipment as defined by Section 63-3029I of the Idaho Code ("Application"). 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 Company's filings, FMTI represented that it is a telecommunications carrier and
provides basic local exchange service,broadband telecommunications service, and other
telecommunications services in the New Plymouth and Payette areas of Idaho.
FMTI confirmed that it uses Fiber to the Home and Terrestrial Fixed Wireless
technologies to provide services to its customers. FMTI discloses that its broadband equipment
is capable of transmitting signals at a rate of at least 25 Megabits per second("Mbps")to a
subscriber and at least 3 Mbps from a subscriber. These rates exceed the minimum statutory
speed requirements under Idaho Code § 63-30291.
FMTI also asserts that it provides broadband services to 283 broadband customer
households in portions of New Plymouth and Payette out of the total possible customer
households of 754 and 3081, respectively.
Finally, FMTI confirms that it invested $430,199.52 in 2023 in qualifying broadband
equipment that it confirms is integral to its broadband network. This qualifies for a 3%
broadband tax credit of approximately $12,905.99.
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.
DECISION MEMORANDUM - 2 - OCTOBER 29, 2024

COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. FMU-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?
han E. Kalala-Kasanda
Commission Staff
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DECISION MEMORANDUM - 3 - OCTOBER 29, 2024