Broadband tax credit cut from stimulus bill

Broadband tax credit cut from stimulus bill

Summary: The tax credit for companies that install new broadband service was cut from the latest version of the economic stimulus bill, according to the New York Times' Saul Hansell.The bill will still award more than $6 billion in grants to help build high-speed Internet service, mainly in rural areas, Hansell writes.

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The tax credit for companies that install new broadband service was cut from the latest version of the economic stimulus bill, according to the New York Times' Saul Hansell.

The bill will still award more than $6 billion in grants to help build high-speed Internet service, mainly in rural areas, Hansell writes.

Senate leaders have boasted that they have reached a compromise with the House over the stimulus bill, but no text has been published yet. Hansell writes that details of the bill's earmark-trading have been leaking on Capitol Hill, and four different people have told him that the tax credit, originally proposed by Senator John D. Rockefeller IV (D-Wv.) has been eliminated.

Dow Jones News Service also reported the news.

The initial draft of the tax credit raised eyebrows because it appeared to favor Verizon, and Rockefeller later proposed a new version of the credit that restricted the benefits to companies installing new service in rural or unserved areas. But the change didn't make it into the final Senate version, and the entire concept is said to have been dropped in the negotiations between the House and Senate, Hansell writes.

The original House bill set aside $6 billion for the grant program, and the Senate initially proposed $9 billion, but that was later cut to $7 billion. The compromise is rumored to be between $6.65 and $6.8 billion.

Another difference between the two proposals is what government agency will be responsible for making the grants: the Senate wanted the National Telecommunications and Information Administration, which is in the Commerce Department, to administer the money, while the House split the funds between that agency and Rural Utility Service, which is part of the Department of Agriculture.

Finally: the latest plan is also said to eliminate rules meant to encourage the deployment of very fast service, Hansell writes. The House bill allocated three-quarters of the grant money to broadband systems that offered download speeds of at least 45 megabits per second. (As readers of ZDNet know, pretty much only Verizon's FiOS service offers service at that speed.)

Topics: Government US, Banking, Broadband, Government, Networking

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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  • Brighthouse will be offering 50Mbs downstream in florida this year

    I think either way though, its going to mainly benifit telephone companies.

    Cable provider lines out in the boonies are sparce.

    Its funny they are giving tax credits to monopolies that already overcharge in areas they know they have complete dominance.
    Been_Done_Before
  • RE: Broadband tax credit cut from stimulus bill

    A few months ago, the Democratic Congress insisted that we needed to spend 900 billion to bail out the banking industry, and that we couldn't afford to wait, and that we didn't have time to study (or publicize) the contents of the bill, and that we had to pass it or die or worse. So, Congress passed the bill, and Bush signed it into law, and the economy worsened.

    Now, the Democrats are using the same arguments to promote a huge spending bill, that will not create any new jobs, will not stimulate the economy, and is guaranteed to worsen and prolong the depression, increase inflation, and increase the national debt exponentially.

    Who cares about a broadband tax credit? The future of the country is at stake, and everyone still wants to "get theirs".

    Pass out the fiddles.
    cdgoldin
    • You Are Wrong!!

      Wait 6 Months and You`ll See!
      TheCableGuyNY
      • LOL

        nt
        Hallowed are the Ori
  • RE: Broadband tax credit cut from stimulus bill

    Every Cable Companies Will be Offering Speed WellOVER 45Mbs THIS YEAR!!!
    docsis 3.0
    http://www.cedmagazine.com/Article-DOCSIS-3-0-arrives.aspx
    TheCableGuyNY
  • Broadband is not a necessity

    Regardless of how you look at it broadband is a luxury, not a necessity.

    An economic stimulus package should be design to generate LONG TERM jobs and help those who are loosing their homes due to predatory loans .... the two real problems in this economy. How does forcing the taxpayer to subsidize a broadband infrastructure would help with that??

    If somebody wants/needs broadband, let them pay for it. Live too far away for broadband? Pay for the cable installation or better yet, get connected via satellite. Too expensive, that is your problem. Don't ask me to subsidence your needs.

    The telcos want money to put cable? Let them pay for it. They already get huge tax breaks and enjoy very large % of earnings every year. None are working in red.

    The "pork-barrel bill" does absolutely nothing to generate long term jobs (although it could generate some really short-term jobs), and doesn't even address the foreclosure problem at all.

    wackoae
  • RE: Broadband tax credit cut from stimulus bill

    Broadband is a necessity if we are to pull ahead of our position as #16 in the world using this type of service. I am ashamed as a techy to know that as a developed nation we haven't come further. Maybe this is one of the reasons for so much job loss through outsourcing. Efficient and fast communication is of the utmost importance for this country's economic advancement.
    helppc_cre@...
    • Bragging right is not a "necessity"

      If you are too dumb to understand that simple fact, I feel sorry for you.
      wackoae
    • Don't be Ashamed

      Do you have any idea of why the U.S. might not be ranked near the top in some ranking of broadband internet adoption? Take a look at Google Earth "techy" and compare the land area of the U.S. to that of the nations we are being ranked with. I think outsourcing has to do with dramatically lower wages in other countries, not because some parts of our country don't have broadband. To your last point though, what exactly are we as a country not able to do because of lack of total broadband coverage? I look forward to hearing your thoughtful response.
      Bob C User
  • RE: Broadband tax credit cut from stimulus bill

    I live in one of the areas not served by broadband.
    AT&T can't tell me why it's not available to me,
    whether it's distance (it's not) or what, and
    satellite isn't enough faster to justify the
    difference in price.

    I don't NEED broadband, but it would be very useful in
    my job when I have to work from home, and I could
    expand some of my independent work if I had it. But I
    don't want it provided on teh backs of the taxpayers.

    Having said that, if, by golly it is, I had BETTER be
    included in it.
    nancyjones36507@...