20220906_FILT2201_jk1.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER ANDERSON COMMISSIONER CHA TB URN COMMISSIONER HAMMOND COMMISSION SECRETARY LEGAL WORKING FILE
JOHAN E. KALALA-KASANDA CHRIS BURDIN
SEPTEMBER 6, 2022
FILER MUTUAL TELEPHONE COMPANY'S 2021 BROADBAND EQUIPMENT TAX CREDIT; CASE NO. FIL-T-22-01.
BACKGROUND
In 2001, House Bill 377 was enacted authorizing income tax credits 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 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§ 63-30291(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. Commission Procedural Order
No. 35297; Idaho Code§ 63-30291(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 -SEPTEMBER 6, 2022
THE APPLICATION
On April 05, 2022, the Commission received an application from Filer Mutual Telephone
Company ("Filer Mutual"or "Company"),seeking Commission approval that certain
telecommunications equipment, installed during the calendar year 2021,is eligible for the
broadband infrastructure tax credit authorized by Section 63-30291 of the Idaho Code.On
August 26, 2022, the Company submitted an amended application ("Application")to comply
with the new requirements of Commission Order No. 35297, which supersedes Commission
Order No.28784.
In the Application, Filer Mutual represents that it is a communications carrier that offers
the followingbroadband services to its customers:Asymmetric Digital Subscriber Line (ADSL),
High-bit-rate digital subscriber line (HDSL),Wireless Broadband (WBB),and Fiber To The "x"
(FTTX).Over the past several years Filer Mutual Telephone has been installing equipment and
engineering projects with the sole purpose in mind to make available to customers broadband
connectivity.The Company states that it continues to deploy fiber to the node and FTTX and it
is developing a fiber network that will have the ability to handle huge amounts of data.In 2021,
Filer Mutual added 3 miles of fiber cable and duct.Currently,Filer Mutual is using Fujitsu and
Adtran broadband carrier equipment for data and telephone backhaul. The Company discloses
that the broadband network data transmission rate it offers to its customers is 512 kilobits per
second (512kb) for downloads and 10 gigabits per second (10G) for uploads. These rates exceed
the minimum statutory speed requirements under Idaho Code §63-30291.Additionally,the
Company represents that it serves 3,784 Idaho customers with broadband service and the
availability of these services to the Company's total customer base has remained at 99% in the
past year. The Company states that it invested $1,008,704.91 in 2021 in qualifying broadband
equipment that it confirms is integral to its broadband network.
STAFF REVIEW AND RECOMMENDATION
Staff reviewed and audited the list of proposed broadband equipment and believes the
equipment qualifies for the investment tax credit.Staff recommends that the Commission issue
an order confirming the equipment is qualified broadband equipment and forward that order
along with a copy of the Application to the Idaho State Tax Commission.
DECISION MEMORANDUM -2 -SEPTEMBER 6,2022
COMMISSION DECISION
Does the Commission wish to issue an order confirmingthe equipment identified in Case
No. FIL-T-22-01 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward to the Idaho State Tax Commission?
ohan E.Kalala-Kasanda
Udmemos/FlL-T-22-01 Decision Memo
DECISIONMEMORANDUM -3 -SEPTEMBER 6,2022