20190521_dk2jo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DANIEL KLEIN
DATE:MAY 16,2019
RE:BLACKFOOT COMMUNICATIONS,INC.DBA FREMONT
COMMUNICATION'S 2018 BROADBAND EQUIPMENTTAX CREDIT;
CASE NO.FRC-T-19-01.
BACKGROUND
In 2001,House Bill 377 was enacted authorizing income tax credit for the installation of
qualifyingbroadband infrastructure in Idaho.Idaho Code §63-3029B(3)(a)(ii).In particular,
Section 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 "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 §63-329I(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 taxpayermust obtain from the Commission an Order confirmingthat the
installed equipment meets the statutory definition of qualified broadband equipment.Procedural
Order No.28784 and Idaho Code §63-3029I(4).Once the Commission as determined 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 16,2019
THE APPLICATION
On April 9,2019,the Commission received an Application from Blackfoot
Communications,Inc.dba Fremont Communications ("Blackfoot"or "Company"),seeking
approval of the equipment for the broadband tax credit installed during calendar year 2018.In
the Application,Blackfoot states that it installed equipment associated with Asymmetric Digital
Subscriber Line (ADSL),Very-high-bit-rate Digital Subscriber Line (VDSL),Broadband
Ethernet and Ethernet broadband services (using 18k non-loadedcopper distribution,fiber optic
backbone and distribution cable).Blackfoot discloses that its broadband network has data
transmission rates of 256Kbps to 1 Mbps from a subscriber and 768 Kbps to l Mbps to a
subscriber which meets the required rates of 200,000 bits per second to a subscriber and 125,000
bits per second from a subscriber.The Company asserts that 67%of its Idaho customers have
broadband services.Blackfoot invested approximately $442,383 in 2018 in qualifying
broadband equipment that it confirms is integral to the broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed and audited the list of proposed broadband equipment and believes
the identified equipment qualifies for the investment tax credit pursuant to Procedural Order
No.28784 and Idaho Code §63-3029I(3)(b).Staff,therefore,recommends that the Commission
issue an Order confirmingthe equipment is qualified broadband equipment and forward the
approving Order along with a copy of the original Application to the Idaho Tax Commission.
COMMISSION DECISION
Does the Commission wish to issue an Order confirmingthe equipment identified
in Case No.FRC-T-19-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission?
Daniel Klein
Udmemos/FRC-T-19-01 2018 Blackfoot Broadband Tax Credit
DECISION MEMORANDUM -2 -MAY 16,2019