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 POTLATCH TELEPHONE COMPANY d/b/a TDS
TELECOM'S APPLICATION FOR APPROVAL OF ITS IDAHO
BROADBAND EQUIPMENT TAX CREDIT FOR THE TAX YEAR 2023;
CASE NO. POT-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 20, 2024, the Commission received an application, with a cover letter, from
Potlatch Telephone Company d/b/a TDS Telecom ("Company"), seeking Commission
determination that the broadband equipment installed during the calendar year 2023 meets the
statutory definition of qualified broadband equipment("Application"). On September 11, 2024,
the Company submitted additional filings on its Application, revising its assets list in compliance
with Commission Order No. 35297.
In the Application, the Company represented that it is a telecommunication carrier with
broadband equipment installed in Kendrick, Julietta, and Troy, Idaho. It offers Digital
Subscriber Line ("DSL")1 Services and began offering fiber-to-the-home services in some
locations in early June 2020. These services are currently offered at a transmission rate of up to
1 Gig symmetrical in the locations where a passive optical network("PON")Z has been deployed.
The Company disclosed that as of December 31, 2023, the following number of locations
have access to broadband services: 45 percent receive their services at the transmission speed
rate of 100 megabits per second("Mbps") x 25 Mbps; 12 percent at 50 Mbps x 5 Mbps; 9
percent at 25 Mbps x 5 Mbps; 4 percent at 25 Mbps x 3 Mbps; 18 percent at 10 Mbps x 1 Mbps;
3 percent at 4 Mbps x 1 Mbps; 3 percent at 1 Mbps x 256 kilobits per second("kbps"); and 6
percent at less than 1 Mbps x 256 kbps. These rates exceed the minimum statutory speed
requirements under Idaho Code § 63-3029I.
Finally, the Company confirms that it invested $530,451.32 in 2023 in qualifying
broadband equipment that it confirms 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.
1 DSL is a family of technologies that transmit digital data over telephone lines. The most commonly installed DSL
technology is asymmetric digital subscriber line,which provides high-speed Internet access.
2 A PON is a system commonly used by telecommunications network providers that brings fiber optic cabling and
signals all or most of the way to the end user. Depending on where the PON terminates,the system can be described
as fiber to the curb,fiber to the building or fiber to the home.
DECISION MEMORANDUM - 2 - OCTOBER 29, 2024

COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in Case
No. POT-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?
dl�ut!a"
ohan E. Kalala-Kasanda
Commission Staff
L\Utility\UDMEMOS\POT-T-24-01 Decision Memo.docx
DECISION MEMORANDUM - 3 - OCTOBER 29, 2024