20230705_FILT2301_cs.pdf

DECISION MEMORANDUM
TO:COMMISSIONERANDERSONCOMMISSIONERHAMMONDCOMMISSIONERLODGE
COMMISSION SECRETARY
LEGAL
FROM:JOHAN E.KALALA-KASANDA
CLAIRE SHARP
DATE:JULY 5,2023
RE:IN THE MATTER OF FILER MUTUAL TELEPHONE COMPANY'SAPPLICATIONFORTHE2022BROADBANDEQUIPMENTTAXCREDIT;CASE NO.FIL-T-23-01.
BACKGROUND
In 2001,House Bill 377 was enacted authorizingincome tax credit for the installationof
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 equipment "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 thousand twenty-five (125,000)bits per second 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 taxpayer must obtain from
the Commission an Order confirmingthat the installed equipment meets the statutory definition
of qualified broadband equipment.Commission Order No.35297 and Idaho Code §63-
3029I(4).Once the Commission has determined the installed equipment is eligible for the
broadbandequipment tax credit,an order along with the original Application is forwarded to the
Idaho Tax Commission.
DECISION MEMORANDUM -1 -JULY 5,2023
THE APPLICATION
On June 1,2023,the Commission received an Application from Filer Mutual Telephone
Company dba TruLeap Technologies ("Filer Mutual"or "Applicant"),seeking approval of the
equipment for the broadbandtax credit installed during the calendar year 2022.
In the Application,the Applicant represented that the broadband services it offers to its
customers are associated with technologies such as point-to-pointiand point-to-multipoint
wireless,Gigabit Passive Optical Network ("GPON")2,XGS Passive Optical Network ("XGS-
PON")3,and active Fiber To The X ("FTTX").The Applicant disclosed that the transmission
rate of its broadbandnetwork symmetricallyranges from the lowest of 512 Kilo bites (Kb)per
second to the highest of 20 gigabytes per second.
The Applicant asserted that it serves a total of 3,888 Idaho customers with its broadband
services.The availability of these services to the Applicant's total customer base has remained
at ninety-ninepercent in the past year.The Applicant also represented that it invested
approximately $2,531,679.72 in 2022 in qualifyingbroadband equipment that it confirms is
integral to the broadband network.This qualifies for a 3%broadbandtax credit of
approximately $75,950.
STAFF REVIEW AND RECOMMENDATION
Staff has reviewed the list of proposed broadband equipment and believes the identified
equipment qualifies for the investment tax credit pursuant to Procedural Order No.35297 and
Idaho Code §63-3029I(3)(b).Staff recommends that the Commission issue an Order confirming
the equipment is qualified broadband equipment and forward the approved Order along with a
copy of the original Application to the Idaho Tax Commission.
A point-to-pointnetwork is a type of network architecture in which only two nodes of each data channel are used
to communicate,as opposed to multipoint networks where each data channel can be used to communicate in avarietyofways.
2 GPON is a standard for passive optical networks ("PON").GPON is commonly used to implement the outermostlinktothecustomer(last kilometer or last mile)of Fiber-To-The-Premises ("FTTP")services.GPON is a type offiber-opticconnection that delivers access to a specific network from a supplier to an end user.It is capable of highGigabitspeeds.GPON replaces the traditional three-tier Ethernet design with a two-tier optic network which
eliminates access and distribution Ethernet switches with passive optical devices.
3 XGS-PONis a passive optical networktechnology that can support higher speed 10 Gbps symmetrical data
transfer.It is an updated standard for PON and is part of the family of standards known as Gigabit-capable PON,orGPON.
DECISION MEMORANDUM -2 -JULY 5,2023
COMMISSION DECISION
Does the Commission wish to issue an Order confirmingthe broadband equipment
identified in Case No.FIL-T-23-01 is qualified broadband equipment as defined in Idaho Code
§63-3029I(3)(b)and forward it to the Idaho Tax Commission
Johan E.Kalala-Kasanda
Udmemos/FIL-T-23-01 Filer Mutual Telephone Company Broadband Tax Credit
DECISIONMEMORANDUM -3 -JULY 5,2023