20250513Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSIONER HARDIE
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: JOHAN E.KALALA-KASANDA,COMMISSION STAFF
ERIKA K. MELANSON, DEPUTY ATTORNEY GENERAL
DATE: MAY 13, 2025
RE: IN THE MATTER OF CAMBRIDGE TELEPHONE CO., INC.'S
APPLICATION FOR THE 2024 BROADBAND EQUIPMENT TAX
CREDIT; CASE NO. CAM-T-25-01.
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 seconds 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 an order from the Idaho Public Utilities Commission ("Commission")
confirming that the installed equipment meets the statutory definition of qualified broadband
equipment. Commission Order No. 35297; Idaho Code § 63-30291(4). Once the
Commission has determined that the installed equipment is eligible for the broadband
equipment tax credit, an order along with the original application is forwarded to the Idaho
Tax Commission.
DECISION MEMORANDUM - 1 - MAY 13,2025

APPLICATION
On February 04, 2025, the Commission received an Application from Cambridge
Telephone Company Inc. ("CTC"or"Company")seeking approval of the broadband tax credit
for the equipment installed during the calendar year 2024.
In the Application,the Company represented that the broadband services it offers to its
customers are associated with Digital Subscriber Line ("DSL"), wireless, and fiber-to-the-
home ("FTTH") technologies. This is carried out using Cisco, Optelian, and Brocade in the
Company's backbone network' and digital loop carriers ("DLC"), including Calix.
The Company confirmed that it offers broadband services to its customers at
transmission rates that range from 25 megabits per second to 1 gigabit per second for both
upstream and downstream transmissions. The Company stated that, during 2024, it lost 124
total internet customers (fixed wireless), bringing the total number of its customer base to
3,086, and 87% of its Idaho subscribers have access to its broadband network.
The Company reported that it invested $4,488,676.47 in 2024 in qualifying
broadband equipment, which equates to a 3% broadband tax credit totaling $1341,660.29. The
Company asserted that all the purchased equipment listed is necessary for the provisioning of
broadband service and is an integral part of its broadband network.
STAFF COMMENTS
Staff reviewed the list of proposed broadband equipment and believe the identified
equipment qualifies for the investment tax credit pursuant to Commission Order No. 35297
and Idaho Code § 63-30291(3)(b). Staff recommends the Commission issue an order
confirming the equipment is qualified broadband equipment and forward the approving order
along with a copy of the original Application to the Idaho Tax Commission.
1 A backbone network is a high-speed central connection or network that serves as the main route for data transmission
between different networks or devices. It uses high-speed cables,routers,switches,and other hardware components to
relay data between its user's computers,supporting the transfer of data,voice,and video information in a large area or
vast geographic region.
z A DLC is a telecommunication system used for extending the reach of a telephone exchange by converting analog
signals into digital format.It consists of a central office-based equipment and remote terminal devices. By digitizing
and multiplexing analog voice signals,it enables more efficient use of communication lines and improved voice quality.
DECISION MEMORANDUM - 2 - MAY 13,2025

COMMISSION DECISION
1. Does the Commission wish to issue an order confirming the broadband
equipment identified in Case No. CAM-T-25-01 is qualified broadband
equipment as defined in Idaho Code § 63-3029I(3)(b), and forward the order and
Application to the Idaho Tax Commission?
2. Anything else?
Johan E. Kalala-Kasanda
Commission Staff
I:\Utility\UDMEMOS\CAM-T-25-01 Decision Memo.docx
DECISION MEMORANDUM - 3 - MAY 13, 2025