Free Press Outlines $44 Billion Broadband Plan

“There should be no blank checks,” said Derek Turner, Free Press’ research director and the proposal’s author. The tax benefits are designed to “trigger new investments, not to fund projects previously planned by incumbent telecommunications companies.” Although Congress is almost sure to legislate in haste, the report said, “oversight and accountability measures must be established. If the public is to become a financial partner in our broadband networks, the private owners… must be held to public service standards.”

Free Press calls for $38.2 billion over three years to stimulate broadband supply. It foresees $15 billion over three years in grants for rural broadband investment, under the universal service program. An additional $5 billion would go to grants for wireless connectivity in rural areas. An accelerated depreciation tax incentive would provide $1.5 billion over three years to offset the cost of capital investments. An “information superhighway tax credit program” would create $1.5 billion to trigger investment in high-capacity technologies capable of delivering a minimum of 20 Mbps to end users. A competitive-fiber tax-incentive program would spend $5 billion on investment in fiber networks shared with competitors. An additional $10 billion would be spent on bonds for certain types of broadband infrastructure investment.

The proposal calls for $5.8 billion to stimulate broadband demand. Included would be $1.2 billion for a Lifeline/Linkup broadband pilot program, which would allow broadband to be added to an existing subsidy for phone service for low-income residents. And $3 billion would be dedicated to an E-Rate@home program” to buy laptops and build Wi-Fi networks at schools and libraries. A program aimed at children would allow $1 billion in tax deductions for residential Internet access in low-income households. A broadband mapping program would receive $300 million. A rural development grant program would get $150 million to supply broadband services in community centers. And $150 million would be spent on a health care technology program managed by NTIA to improve digital record-keeping.

Consumers Union shares Free Press’ concern about making strategic investments for broadband that don’t emphasize projects planned by incumbent telecommunications providers. “Stimulus and subsidy dollars will get a far better return on investment if they are given directly to consumers,” said a letter that Consumers Union sent Wednesday to Congress. “If tax breaks and other subsidies do not have explicit accountability metrics they will go into the pockets of the corporations” and not produce increases in broadband deployment, the letter said. Any investments in broadband should include “key structural changes” to ensure that the network is available to all, without discrimination, the letter said.

Investment in broadband networks should be included in any infrastructure stimulus program, said Larry Darby, a former FCC official and senior fellow of the American Consumer Institute. He opposes investments in municipal broadband networks. “Funneling money away from the private sector to underwrite public provision of broadband networks is fundamentally a very bad idea with no basis in experience,” Darby said.

The Telecommunications Industry Association said Wednesday that it hopes to work with Congress, the FCC, Federal Trade Commission and Commerce Department in creating policies to create more broadband services. TIA also urged development of an interoperable public-safety network as a priority for the new Congress and administration.