20160314_4923.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSiONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
DATE:MARCH 10,2016
RE:FATBEAM LLC’S 2015 BROADBAND EQUIPMENT TAX CREDIT
APPLICATION;CASE NO.FZ4-T-16-O1
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).In particular,
Section 63-30291 allows a taxpayer to receive an investment tax credit for eligible broadband
equipment installed during a calendar year.
“Qualified broadband equipment”is defined as those network facilities capable of
transmitting signals at a rate of at least 200,000 bits per seconds (bps)to a subscriber and at least
125,000 bps from a subscriber.Idaho Code §63-30291(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 §63-30291(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.Procedural
Order No.28784 and Idaho Code §63-30291(4).Once the Commission has determined the
itemized equipment is eligible for the broadband equipment tax credit,an order along with the
original Application is forwarded to the Idaho Tax Commission.
THE APPLICATION
On March 2,2016,the Commission received an Application from Fatbeam,LLC
(“Fatbeam”or “Company”)seeking approval of equipment for the broadband tax credit for
calendar year 2015.Fatbeam is an Idaho registered competitive local exchange carrier.In the
DECISION MEMORANDUM -I -MARCH 10,2016
Application.Fatbeam states that it installed equipment associated with Lit Ethernet and dark
fiber services with minimum transmission rates of one (1)Gigabits per second (Gbps)to and
from subscribers;significantly faster than the transmission rates required in Idaho Code
§63-30291(3)(b).The Company specifies that it deployed broadband services in the Bingham,
Kootenai,and Power counties and asserts that 100%of its customers can be served by the
broadband network.During 2015,Fatbeam invested approximately $427,100 in qualifying
broadband equipment.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment submitted by Fatbeam and
believes the identified equipment qualifies for the investment tax credit pursuant to Procedural
Order No.28784 and Idaho Code §63-30291(3)(b)O).Staff also believes that the expenditures
identified by the Company,a telecommunications carrier,were for equipment that is “necessary
for the provision of broadband services and an integral part of a broadband network.”StafC
therefore,recommends that the Commission issue an Order confirming the equipment is
qualified broadband equipment and forward the approving Order along with the a copy of the
original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an order confirming the equipment identified in this
Application is qualified broadband equipment as defined in Idaho Code §63-30291(3)(b),and
forward it to the Idaho Tax Commission?
A U
Grace Seaman
Ldmemosift4-l-I6-OI dcc memo
DECISION MEMORANDUM -2-MARCH 10,2016