20190319_dk3jo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:DANIEL KLEIN
DATE:MARCH 12,2019
RE:THE 2018 BROADBAND EQUIPMENTTAX CREDIT APPLICATIONFORFATBEAM,LLC,CASE NO.FZ4-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 taxpayer must 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 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 Tax Commission.
DECISION MEMORANDUM -1 -MARCH 12,2019
THE APPLICATION
On February 4,2019,the Commission received an Application from Fatbeam,LLC
("Fatbeam"or "Company"),seeking approval of the equipment for the broadband tax credit
installed during calendar year 2018.An Amendment to the Application was filed on March 11,
2019 correcting some missing information.In the Application,Fatbeam states that it installed
equipment associated with "Lit Ethernet ...,Dark Fiber,and a 1GB Internet product".Fatbeam
discloses that its broadband network has data transmission rates of 1GB speed upstream and
downstream which exceeds 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 100%of its Idaho
subscribers have access to the broadband network.Fatbeam invested approximately
$3,495,234.82 during 2018 in qualifyingbroadband equipment that it confirms is integral to the
broadbandnetwork.
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.FZ4-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/FZ4-T-19-01 2018 Fatbeam LLC Broadband Tax Credit
DECISION MEMORANDUM -2 -MARCH 12,2019