USTelecom, TIA Offer Broadband Grant, Subsidy Proposals
Congress should adopt a mix of targeted tax credits and grants to help small businesses in rural areas, TIA and USTelecom told the House Small Business Committee on Wednesday. The groups outlined ideas to extend broadband services in hard-to-reach areas, emphasizing programs that would create new jobs right away. Both recommended that Congress approve funding for the broadband mapping law passed last year, so policymakers can identify the parts of the country most in need.
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“Our industry is not asking Congress for financial help to fund our ongoing operations or to execute on our business plans,” said USTelecom Executive Vice President Alan Roth. But in response to President-elect Barack Obama’s call for broadband infrastructure investment spending, the group put forth ideas for that. Congress should consider adding $40 million for the Agriculture Department’s RUS broadband loan program. The extra money could allow lending at inexpensive rates, “conceivably even zero-interest loans,” Roth said.
An RUS telecom loan program should receive an additional $500,000, Roth said, which would provide underwriting authority for $250 million in loans. That would take care of an existing problem with demand for loans exceeding the money available, he said. The program was “oversubscribed” last year by $250 million, leaving applicants on hold. “These loans are ready to be processed and could be finalized by the conclusion of the first quarter of 2009, with spending on new infrastructure beginning soon after,” he said.
Roth also suggested a consumer broadband tax credit of up to $30 monthly per home to offset the cost of broadband subscriptions for low-income, unemployed and rural residents. For business, an investment tax credit of at least 50 percent for deployment in rural and underserved areas could help broadband. Roth also suggested extending a depreciation provision that before expiring last year allowed companies to write off 50 percent of the value of new investment.
TIA said the sagging economy is hurting its industry with thousands of job losses. “Under these market conditions, investors will not continue to support increased broadband infrastructure buildout,” said TIA President Grant Seiffert. He urged Congress to include incentives in the stimulus package for fixed broadband, wireless broadband, satellite broadband and investments in core and backbone support. TIA agrees with other industry proposals for direct grants for broadband deployment and suggests a $25 billion grant program, Seiffert said.
The stimulus package also should include vouchers for low-income households to buy laptops, mobile handsets and computing devices. Consumers eligible for Lifeline and Link- Up should be able to use the discounts for broadband as well as phone service, TIA said: “Finally, we believe that Congress should consider” public safety’s request that $15 billion be included in the stimulus package to build an interoperable public safety broadband network.
Committee Chairman Nydia Velaquez, D-N.Y., questioned witnesses about which proposals would most quickly create jobs. Infrastructure investments through a broadband grant program are good bets, because people would be needed to create and sell new services, Seiffert said.