mocoNews.net - Senate To Increase Broadband Stimulus Grants, Add Tax Credits

In the latest bail-out package, the U.S. Senate will consider earmarks of up to $9 billion and tax-breaks for companies that are willing to build wired and wireless broadband networks. Of course, the biggest controversy is over whether the government will require the operators to require them to be open, which would allow most any device or person to connect to it under certain guidelines. It's something the carriers have discouraged in the past because they feel like it will threaten the way they can run their business, but it seems if the networks are financed through public funding, it would be a more difficult case to make.

Under the revised stimulus package, the U.S. senate will consider whether to increase the size of the grants given to encourage broadband roll-out from $6 billion to $9 billion and provide "a 10 percent tax credit to companies that build out high-speed Internet in rural and underserved areas, and 20 percent for those willing to exceed current speeds" reports Reuters. Of the $6 billion proposed by the U.S. House Energy and Commerce Committee, $1 billion was tagged for wireless. Analyst Jessica Zufolo of Medley Advisors: "The wireless industry has never before been the subject of such generous tax treatment from the Senate Finance Committee for the deployment of mobile data service".

More after the jump...

CTIA argued against the idea of requiring any extra provisions on the networks. RCR Wireless reported CTIA as having this harsh words to say: "If the point of this exercise is to meet the president's call for bipartisan ideas that stimulate broadband deployment and the economy, I do not believe that including controversial provisions on network neutrality, open-access, minimum speeds and build-out requirements do that?So-called network neutrality and open-access provisions discourage investment and innovation. The speed requirements are unrealistic at best, and neither competitively nor technologically neutral at worse.

Maybe the worst of it is that this sort of legislative lard discourages companies from participating in the stimulus plan." Derek Turner, research director at the public interest group Free Press, another view. He said the 10 percent tax break will likely go towards networks that were going to be built anyway, but the 20 percent tax break for next-generation networks could spur investment since few operators offer such speeds today. Commercial mobile carriers would get the 20 percent tax credit if they deploy networks with at least 3 mbps down and 768 kbps up in unserved and underserved areas, reports RCR Wireless.

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