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Kerry, Bush Split on Broadband

WASHINGTON -- A John Kerry administration would use federal subsidies to help spur broadband deployment while President Bush would continue his policy of deregulation to spread the technology, two think tank officials said Tuesday.

Thomas Lenard of the conservative Progress and Freedom Foundation and Robert Atkinson of the Progressive Policy Institute, which helped craft much of the Clinton administration policy, said broadband deployment policy is one of the few tech policy issues where Bush and Kerry differ.

Earlier this year, Bush called for universal and affordable broadband access for all Americans by 2007. Kerry has pushed for an equally aggressive broadband rollout but without a specific deadline.

"The Bush approach is that the best way to get greater broadband deployment is to reduce regulations, deregulate in areas where regulations have essentially provided disincentives to the deployment of broadband," Lenard said at a debate sponsored by the tech trade group CompTia. "Kerry believes the market can not do it alone, so you need to subsidize it."

Kerry is proposing a 10 percent tax credit for investments in current broadband technology for rural and inner city areas. He's proposing a 20 percent tax credit for next-generation broadband technologies, which the Massachusetts Democrat defines as speeds of more than 20 times today's networks.

According to the Kerry technology plan, the tax credits would cost $2 billion over five years and would be paid for by the estimated $30 billion the government will gross by auctioning off the spectrum left behind by broadcasters transitioning to digital television.

"This is one of those issues ... between two fundamentally differing approaches," Atkinson said. "What Bush is proposing is [by 2007] every single American can get low-speed broadband. I think that's emblematic of their approach. When Kerry is talking about broadband, he is talking about big broadband. He is talking about networks that are 10 to 100 times faster [than today] and setting that as a goal."

The Bush broadband policy is primarily centered at the Federal Communications Commission (FCC), where Chairman Michael Powell has championed a multi-platform approach to broadband deployment. Under Powell, the FCC has promoted wireless broadband and broadband over power lines as alternative third and fourth pipes to compete with cable modems and DSL.

"This is a case where personnel is policy," Lenard said, referring to Bush's appointment of Powell as FCC chairman. "Bush says the market can really do it; Kerry says the market can't do it without federal subsidies."

Last month, the FCC released its fourth annual report to Congress on broadband deployment. The FCC said the United States ranks number one in the world with 28 million subscribers, followed by the European Union (23 million), Japan (14 million), China (12 million), South Korea (11 million) and Canada (4.5 million).

But in terms of residential broadband penetration -- the number of subscribers per 100 people -- the United States with its 6.9 subscribers per 100 residents ranks behind 10 other countries. South Korea is the global leader with 21.3 subscribers per 100 people, followed by Hong Kong (14.9), Canada (11.2), Taiwan (9.4) and Iceland (8.4).

The FCC report said subscribership to advanced services providing bi-directional Internet speeds in excess of 200 kilobits per second (Kbps) has more than tripled from 5.9 million lines to 20.3 million lines since December.

Cable modem and ADSL service providers comprise the largest majority of advanced service lines, with cable representing 75.3 percent of the lines and ADSL another 14.9 percent. As of last December, 6.8 percent of ZIP codes in the United States had no high-speed lines. In the last report, 22.2 percent of ZIP codes reported no high-speed connections.

On other technology issues, both Lenard and Atkinson said there are subtle but non-substantive differences between the two presidential candidates.

"In many cases, the Bush rhetoric is right, but I question his [real] commitment [to tech-related issues]," Atkinson said. "The Bush record [on telecom policy] is a little bit of a mixed bag." Lenard agreed the Bush administration was a "little bit disengaged the first three years [on telecom policy]," but again stressed that Bush's appointments to key administrative posts spoke well for the president's policies.

The two think tankers also agreed technology issues are not on the frontlines of the public debate over the national elections.

"Both of us are puzzled why this [technology policy] wasn't the subject of the third [presidential] debate," Atkinson joked.