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Lawmakers mull broadband spending in stimulus bill

Labor, industry trade associations and public-interest groups are pushing Democrats to include tax credits or grants for phone and cable companies to expand broadband Internet service in rural and underserved parts of the country as part of the second economic stimulus package.

Both President-elect Barack Obama and House Speaker Nancy Pelosi, D-Calif., have spoken publicly about including an investment in broadband infrastructure as part of the stimulus package, but no decisions have been made at this stage as to what specific initiatives to fund.

They have talked about how spending federal money to ensure that all Americans have high-speed Internet access could lead to improvements in the provision of health care and education.

Like other investments in infrastructure, it could also spur job creation, a central goal of federal government stimulus spending.

But the idea of giving money to some of the largest companies in the U.S. to expand rollout of broadband service could prove to be contentious for Democratic lawmakers.

Even if the decision was made to go down this path, how to ensure that the companies actually use the money to expand their broadband networks could also pose a challenge.

Lawmakers are grappling with these questions about how to include funding to boost Internet access in the stimulus bill.

In the Senate, senior leaders such as Finance Committee Chairman Max Baucus, D-Mont., and incoming Commerce Committee Chairman John Rockefeller, D-W.V., are on record as supporting tax incentives for Internet buildout in rural areas.

Earlier this week, Pelosi told reporters that her goal was to get the bill through Congress by the time Obama was sworn in Jan. 20.

Some public-interest groups, which usually play the role of critics of large phone and cable companies, acknowledge that the backbone of the Internet in the U.S. has been built by private companies and not government.

"We are obviously concerned and very cautious when handing over taxpayer dollars," said Derek Turner, research director at Free Press, a public-interest group.

But he added that providing fast Internet connections to every house in the country won't happen without the involvement of big telecommunications firms.

The Communications Workers of America is a strong advocate of the inclusion of tax credits or grants to phone and cable companies in the stimulus bill.

In a letter sent to Democratic leaders of Congress, the union said that for every $5 billion spent on broadband infrastructure, 100,000 jobs would be created.

Other groups are opposed, urging Congress to avoid providing tax credits to companies with market capitalizations in the billions of dollars.

"Tax incentives for telecommunication companies are, pure and simple, corporate welfare that Congress ought to avoid," Gene Kimmelman, Consumer Union's vice president of federal and international affairs, told Dow Jones.

Instead of tax credits, Consumers Union wants the stimulus bill to include vouchers for people to buy computers and Internet service plans and funds to communities to wire themselves.

The companies themselves are being relatively quiet about how the Internet piece of the stimulus bill should be crafted. Any whiff of tax breaks for the industry could be viewed unfavorably in the public's eyes.

Lawmakers are also considering whether to include funds for a program to determine where in the U.S. high-speed Internet service is available.

Industry experts have long argued that a shortcoming of U.S. regulators and policy makers' ability to craft sound Internet policy has been a lack of information about where broadband access exists.

Congress passed legislation this year aimed at accomplishing this but didn't include a price tag.

A similar bill that passed the House would have allocated $335 million over three years to the mapping program.

Some are arguing for measures to address the demand equation of the quandary of how to expand broadband access through subsidies for lower-income people to help them buy computers for their homes, and funding outreach efforts to explain the benefits of broadband Internet access to people who don't currently subscribe.

Another idea being floated is to give grants to public-service entities like hospitals, schools and libraries seeking to upgrade their telecommunications systems.

This idea could play into both creating jobs in the short term, while making government services more efficient in the longer term.

Источник: Total Telecom

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