House Bill Seeks $6B in Broadband Grants

By Roy Mark  |  Posted 2009-01-15

House Bill Seeks $6B in Broadband Grants

The U.S. House Committee on Appropriations Jan. 15 revealed the first details of a massive $825 billion economic stimulus plan that would include $6 billion in grants for broadband and wireless services in rural and underserved areas. The American Recovery and Reinvestment Act of 2009 also spends liberally on a wide range of proposals the technology sector has urged President-elect Barack Obama to adopt.

Under the House bill, which Appropriations Chairman David Obey, D-Wis., predicted could be passed by the House in two weeks, would spend $20 billion for efforts to computerize health records to cut costs and reduce medical errors; $11 billion for research and development, pilot projects, and federal matching funds for the Smart Grid Investment Program to modernize the electricity grid; and $3 billion for expanding employment opportunities in fundamental science and engineering to meet environmental challenges and to improve global economic competitiveness.

In addition, the bill contains several tax provisions that will allow America's technology companies to continue investing in innovation, including a five-year carryback of net operating losses; an extension of increased small-business expensing; a one-year deferral of withholding tax on government contractors; bonus depreciation; and a long-term extension of a renewable energy production tax credit.

The bill also includes $650 million for more digital converter box coupons as part of the digital television transition program. The National Telecommunications and Information Administration announced Jan. 5 that funding for the $1.34 billion digital converter box coupon program has been temporarily exhausted, prompting Obama Jan. 8 to call for more money and a delay in the Feb. 17 transition date.

"This package is the first crucial step in a concerted effort to create and save 3 to 4 million jobs, jump-start our economy, and begin the process of transforming it for the 21st century with $275 billion in economic recovery tax cuts and $550 billion in thoughtful and carefully targeted priority investments with unprecedented accountability measures built in," the committee said in a statement.

Package Will Create Large Deficit for Years to Come

The committee admits the huge spending package will create a "large deficit for years to come," but without the spending the country faces the "risk of economic chaos. The economy is in such trouble that, even with passage of this package, unemployment rates are expected to rise to between eight and nine percent this year. Without this package, we are warned that unemployment could explode to near twelve percent."

Two of Washington's largest tech trade groups rushed to praise the introduction of the legislation.

"By putting together an economic stimulus proposal that recognizes the need to transform our economy through science and technology and create jobs for all Americans, the U.S. House of Representatives today has exercised true leadership," Phil Bond, president of the Technology Association of America, said in a statement.

Ed Black, president and CEO of the Computer & Communications Industry Association, said in a statement: "CCIA supports this effort to bring high speed, affordable broadband to unserved areas and underserved communities. Some of the economic stimulus will come from the building of truly high speed network connections. But the greatest economic stimulus will come from people using this infrastructure to create new applications and other new economic activity."

Both the CCIA and the Open Internet Coalition, though, sounded a note of caution about the $6 billion to be spent on high-speed Internet connections.

"We believe the government can get the biggest bang for its buck if it makes sure the money isn't used to just make it cheaper for the big incumbent companies to deploy what they have already planned for these areas," Black said. "This expansion will be really successful if it allows local and regional new entrants who are willing to provide unserved and underserved communities with robust, open Internet access."

Markham Erickson, executive director of the Open Internet Coalition, added: "We will monitor this process carefully to help ensure policymakers finance truly open and high-speed Internet access and the money produces new construction. Resources should be spent on creating high-speed fiber networks. And funds should be prohibited for upgrades of existing equipment; priority should go to reach people who don't have access to broadband currently, and who are not covered by pre-existing build-out plans."

Rocket Fuel