RealTime IT News

Democrats Seek Billions for IT, Internet

WASHINGTON -- Democrats in the U.S. House of Representatives on Thursday proposed a combined $26 billion to promote high-speed Internet in underserved areas and for expansion of efforts to computerize health records.

It also proposed $650 million to continue the digital television (DTV) coupon program for the transition to DTV, according to a summary of the economic stimulus legislation released by Democrats on the House Appropriations Committee.

The draft bill calls for $6 billion in grants for wireless and broadband in rural and hard-to-serve areas, and $20 billion to boost computerization of health records aimed at cutting costs and medical errors.

Telecommunications, information technology and other companies are watching the debate in Congress over a $825 billion economic stimulus plan, which Democrats unveiled on Thursday.

Several analysts said telecommunications equipment makers may have the most to gain, citing Adtran, Alcatel Lucent Cisco Systems, among others.

The Senate is working on its own version of a package.

The public interest group Free Press, which had suggested a $44 billion in broadband investment called for strict accountability in how the money is spent.

"Broadband as economic recovery should be "build-out" not bail-out," said Derek Turner, research director at the group.

Analyst Rebecca Arbogast at investment advice firm Stifel Nicolaus said the plan is not likely to impact AT&T Inc. and Verizon Communications because of their huge capital spending budgets.

And whether these big and cable phone companies, which fund much Internet infrastructure in the U.S., apply for the grants is another question. It will be highly dependent on what strings are attached, she said.

The grants might be more attractive to smaller, less known players with a niche in rural areas.

DTV DEBATE

Meanwhile, Democratic lawmakers are preparing legislation to delay a national transition of all television signals to digital, on fears that consumers are not ready.

Those concerns were heightened earlier this month when the government said it has run out of $40 discount coupons for consumers to help pay for converter boxes needed to keep their sets from going blank, leading to calls for delaying the analog switch-off and for more money in the economic stimulus package for the program.

Congress mandated the February 17 switch to digital television, which will affect some 20 million households that do not already use the technology.

Owners of older television sets receiving over-the-air signals must buy converter boxes, replace their TVs with digital models, or subscribe to satellite or digital cable service.

Companies, meanwhile, are split on an extension.

AT&T (NYSE: T) and Verizon Communications (NYSE: VZ) won a collective $16 billion worth of spectrum in a government auction last year that needs to be vacated for them to use.

AT&T has said it would back a short delay, but Verizon opposes it.

But broadcasters are receptive to a delay since they want to avoid the ire of viewers who lose television signals.

President-elect Barack Obama supports extending the transition date, but Republicans oppose a delay, arguing that it will create more confusion.