Conferees Reach Agreement on Stimulus Bill

The conference report also reportedly dropped a broadband tax credit program in the Senate bill championed by Sen. Jay Rockefeller, D-W.Va., that was designed to encourage buildout in rural areas. The credit, aimed at ramping up availability of high-speed services in rural areas, came under fire from several industries concerned that the funding would give incumbent carriers publicly funded subsidies. The bill set speed requirements for “current generation broadband service at 5 Mbps downstream and 1 Mbps upstream. It defined next generation service as having speeds of 100 Mbps downstream and 20 Mbps upstream.

Critics reportedly complained that the high speed definitions were tailored to companies such as Verizon, whose FiOS service meets those speeds. Other competitors are moving toward higher speeds but aren’t ready to roll them out. An industry lobbyist said the cable industry had been “working this hard trying to protect themselves from competition.” A spokesman for the NCTA called the statement inaccurate, adding that many other companies and industry groups had concerns about the provision and met with lawmakers to support changes.

Rockefeller had filed an amendment to lower the speed requirements and reshape the definition of an underserved area, to soothe the worries of industries that they might be cut out of the benefit of the credit. But the amendment never made it into the bill that the Senate passed.

The conference report also reportedly gives most of the broadband money to the NTIA to handle. But the Agriculture Department’s Rural Utilities Service gets some, according to people familiar with the report. The House bill would have divided funding nearly evenly between the agencies. The Senate would have given the NTIA full responsibility for the program. Many industry sources said it would make more sense for the NTIA to run the program on its own, to avoid confusion, but RUS has experience with broadband loans in rural areas.

Health IT Provisions

Microsoft CEO Steve Ballmer urged Congress to adopt the conference bill, saying that investing in science and technology infrastructure will put the nation on the right path. He called government support for “rapid adoption” of health IT “essential.”

Going into conference, the House and Senate versions differed on how to protect patient privacy in relation to electronic health records. Both bills contain restrictions on selling health information for marketing. The Senate allows communications concerning products already prescribed or administered to a patient but only with advance permission from the person. The House allowed covered entities to get paid for the information they collect if they first got patient permission. Alternatively, the covered entity could pay a business associate to make communications for it. But the House said fundraising pitches would no longer be considered “health care operations” that covered entities could use health information for.

The House specified that the bill’s opt-in requirement wouldn’t prevent pharmacists from communicating with patients to prevent prescription errors. The secretary of health and human services could allow pharmacists to sell information needed to make such communications, if the payment doesn’t exceed out-of- pocket costs, the House said. Pharmacists had raised the concern that the bill would in effect outlaw notices to patients about flu shots an prescription refills.

Both bills would have allowed payment for health information to be used for research, public health purposes or to treat the individual patient. The House, however, would have limited payments to the costs of preparing and transmitting data. The Senate said the secretary could evaluate the idea of restricting payments to those costs and could decide to restrict payments for public health and research purposes to the cost of preparation and transmittal. The Senate also allowed covered entities to charge a “reasonable fee,” to cover labor costs, to individuals who want an accounting of disclosures made in the previous three years of their health information.

The Congressional Budget Office had estimated that the House version’s health IT provisions would cost $19.17 billion over 10 years. The Senate’s health IT provisions would cost $20.23 billion, it said.

Last-Minute Lobbying

The Open Internet coalition said the bill would create jobs through its network buildout provisions, according to a letter sent to House-Senate conferees early Wednesday, before the deal was struck. The coalition pleaded for language that would ensure open access for publicly funded high-speed networks. “Closed networks kill innovation,” said Markham Erickson, the coalition’s executive director. Open access “created competition and spurs innovation at the edge of the network,” Erickson said.

But others warned that open access provisions could be counter-productive to encouraging investment. Precursor Group President Scott Cleland said Wednesday that open access provisions would discourage investment, and urged that the final bill exclude them. “Congress needs to stay laser- focused on the recovery purpose of the bill and ‘do no harm’ to the overall economy,” he said.

Mid-sized carriers hoped for language that would bring broadband to unserved, rather than underserved areas, a distinction addressed in different ways by the House and Senate. The Independent Telephone & Telecommunications Alliance said the provision should be “$6 billion to $6.5 billion in size at a minimum -- an amount that would fund at least 1.5 Mbps connectivity” to all of its customers in unserved areas. The ITTA also argued for grants rather than loans or tax credits. “Greater attention to rural, unserved areas in the stimulus bill is consistent with President Obama’s broadband agenda,” the group said in a letter to House and Senate leaders.

The ITTA also had reservations about open access provisions, saying “severe regulatory requirements as a condition of receiving grants” may deter investment in unserved areas. “Such regulatory requirements could also ensnare the program in complex and contentious regulatory debate, slowing the disbursement of funds.”

The National Emergency Numbering Association urged conferees not to cut broadband funding, in a letter it sent Wednesday to conference committee members. The group also asked Congress to set as a priority investment in broadband infrastructure and access to advanced services networks -- both wired and wireless - - for 911 centers and public safety agencies. The group also wanted tax credit language that would not limit availability of next generation broadband credits, grants, loans or other financial instruments from being applied to public safety investments. It urged that the NTIA, rather than the Agriculture Department’s RUS, manage the loan program. “Grants through NTIA generally offer a more attainable opportunity for public safety agencies.”

The NENA said the bill offers an opportunity to enhance emergency communications besides promoting investment and job creation. “Until all emergency response agencies and individual responders can access wired and wireless broadband connections and utilize the services and applications enabled by such networks, the migration to the next generation of truly integrated and interoperable emergency communications … will remain only a mere vision,” the NENA letter said.