20241119Decision 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: NOVEMBER 19, 2024
RE: IN THE MATTER OF BLACKFOOT COMMUNICATIONS,INC.D/B/A
FREMONT COMMUNICATIONS'S APPLICATION FOR APPROVAL
OF THE IDAHO BROADBAND EQUIPMENT TAX CREDIT FOR THE
YEAR 2023; CASE NO. FRC-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 - NOVEMBER 19, 2024

THE APPLICATION
On October 2, 2024, the Commission received an Application from Blackfoot
Communications Inc. dba Fremont Communications ("Blackfoot" or"Company"), seeking
Commission determination that certain telecommunications equipment, installed during the
calendar year 2023, is eligible for the broadband infrastructure tax credit authorized by Idaho
Code § 63-3029I and Commission Order No. 35297.
In the Application, Blackfoot represented that it is a telecommunication carrier that offers
broadband services to its customers that include Asymmetric Digital Subscriber Line'
("ADSL"), Very-high-bit-rate Digital Subscriber Line ("VDSL"), Broadband Ethernet, and
Wavelength services 3. The broadband services are offered using fiber optic cables with non-
loaded copper distribution, fiber optic transport electronics, fiber optic backbone, and
distribution cable.
Blackfoot stated that the data transmission rate offered to customers ranges from 256,000
bits per second up to 1,000,000,000 bits per second from a subscriber and 768,000 bits per
second up to 1,000,000,000 bits per second to a subscriber. These transmission rates exceed the
minimum statutory speed requirements under Idaho Code § 63-3029I. Blackfoot also asserted
that it provides broadband services to 97 out of 128 possible customers, which is 76% of possible
subscribers served in Idaho.
Finally, Blackfoot confirmed that it invested approximately $57,422.35 in 2023 in
qualifying broadband equipment that it confirms is integral to its broadband network.
'ADSL(Asymmetric Digital Subscriber Line)is a technology that facilitates fast data transmission at a high
bandwidth on existing copper wire telephone lines to homes and businesses. ADSL provides continuously available,
always-on broadband connections.ADSL is asymmetric in that it uses most channels to transmit downstream to the
user and only a small part for uploading information from the user.
z VDSL or VHDSL(Very High Bitrate DSL)is a DSL technology providing faster data movement. This works over
a single flat untwisted or twisted pair of copper wires.These fast speeds mean that VDSL can move data for digital
television,as well as telephone services(Voice over IP)and Internet.It can do all these things on a single
connection,using existing wiring used for POTS(Plain Old Telephone Service).
s A Wavelength Service is a large bandwidth connection providing high-speed Internet or data service delivered
over lit fiber-optic lines.Wavelength services are used by businesses that are engaged in telecommunications,
wholesale Internet access,or wholesale ISP services to provide the bandwidth capacity needed for customer
applications including email,file sharing,web hosting,data backup,video,VOIP,or VPN access.
DECISION MEMORANDUM - 2 - NOVEMBER 19, 2024

STAFF REVIEW AND RECOMMENDATION
Staff examined the list of proposed broadband equipment attached to the Application and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No. 35297 and Idaho Code § 63-3029I(3)(b). Staff, therefore, recommends that the
Commission issue an Order determining 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 determining that the broadband equipment
identified in Case No. FRC-T-24-01 is qualified broadband equipment as defined in Idaho Code
§ 63-30291(3)(b) and forward it to the Idaho Tax Commission?
(Y)0� —ji"
an E. Kalala-Kasanda
Commission Staff
L\Utility\UDM EMOS\FRCT2401 ikk.docx
DECISION MEMORANDUM - 3 - NOVEMBER 19, 2024