20220906_FMTT2201_jk2.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER ANDERSON COMMISSIONER CHATBURN COMMISSIONER HAMMOND COMMISSION SECRETARY LEGAL WORKING FILE
JOHAN E. KALALA-KASANDA RILEY NEWTON
SEPTEMBER 6, 2022
FARMERS MUTUAL TELEPHONE COMPANY'S 2021 BROADBAND EQUIPMENT TAX CREDIT; CASE NO. FMT-T-22-01.
BACKGROUND In 200 I, House Bill 3 77 was enacted authorizing income tax credits for the installation of qualifying broadband infrastructure in Idaho. Idaho Code § 63-30298(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 second to a subscriber and at least 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 confinning that the installed equipment meets the statutory definition of qualified broadband equipment. Commission Procedural Order No. 35297 and Idaho Code§ 63-30291(4). Once the Commission has detennined 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 July 18,2022,the Commission received an application from Farmers Mutual
TelephoneCompany ("FMTC"or "Applicant"),seeking Commission certification 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.
In the Application,FMTC represents that it is a telecommunications carrier offering its
customers Tracfone Wireless (TFW)service,which is a prepaid wireless service.It is also an
internet service provider in the Fruitland and Nu Acres areas of Idaho.FMTC uses Fiber To The
Home (FTTH)technology to provide uninterrupted high-speed internet service and has installed
broadband equipment associated with various forms of Digital Subscriber Line (DSL)
technologies.In particular,the Company provides the Very High-Speed Digital Subscriber Line
(VDSL)with high-speed data transmission technologies.The Company discloses that the lowest
broadband network data transmission rate offered to customers is 25 megabits per second (Mbps)
to a subscriber and 3 megabits per second from a subscriber.These rates exceed the minimum
statutory speed requirements under Idaho Code §63-30291.FMTI also states that it provides
broadband services to 2557 out of 2714 possible customers.
STAFF REVIEW AND RECOMMENDATION
Staff reviewed and audited the list of proposed broadband equipment and believes the
equipment qualifies for the investment tax credit.Staffrecommends 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.
COMMISSION DECISION
Does the Commission wish to issue an order confirmingthe equipment identified in Case
No.FMT-T-22-01 is qualified broadband equipment as defined in Idaho Code §63-3029I(3)(b)
and forward to the Idaho State Tax Commission.
Johan E.Kalala-Kasanda
Udmemos.FMT-T-22-Ol Decision Memo
DECISION MEMORANDUM -2 -SEPTEMBER 6,2022