Deep Tax Breaks Offered For Broadband Access

The rollout of national broadband picked up some speed from two
lawmakers seeking tax incentives for service providers. The proposed
legislation specifically targets rural and underserved areas.

Sponsored by Senators John D. Rockefeller IV (D-W.V.) and Olympia J. Snowe
(R-Maine), the Broadband Internet Access Act of 2005 (S. 1147) would allow
providers to expense 50 percent of their investments on current-generation
technology and 100 percent on next-generation technology.

The bill defines current-generation broadband as DSL and cable modems, whereas
next-generation broadband refers to such ultra high-speed services as

To ensure that funds are concentrated on competitive
market solutions, credits are earned only after a service provider achieves
10 percent market penetration.

“High-speed Internet access is an important tool for advancing economic
development in every city and town,” Rockefeller said in a statement. “It
is even more critical for rural communities because their pool of resources
tends to be much smaller than those in urban areas.”

According to the Federal Communications Commission, 20 percent of U.S.
households don’t have a broadband provider in their area. Of the 80 percent
who do have access to a broadband provider, only 25 percent subscribe to the
high-speed service.

“While efforts are being made to bring broadband service to all regions,
urban and rural, the fact remains that this vital component of our
telecommunications infrastructure is still being deployed more rapidly in
urban areas,” Snowe said. “This legislation will ensure that all regions of
our country will be able to share in the myriad opportunities and benefits
provided by broadband services.”

The Pew Internet & American Life Project says that rural Americans have far
less high-speed availability to their homes than urban and suburban

“We cannot sit idly by while the digital divide widens,” said Snowe. “If we
do not act, millions of Americans without access to modern technology will
also find themselves unable to realize the educational and employment
opportunities of the future.”

Rockefeller added, “Without access to broadband technology, rural businesses
fall behind their urban counterparts. The incentives in this bill can help
these communities overcome the digital divide.”

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