House panel moves forward with broadband stimulus

A U.S. House of Representatives committee took the first step toward including more than US$37 billion of technology-related spending in a massive economic stimulus bill by approving a new program aimed at bringing broadband to rural and other underserved areas.

The House Energy and Commerce Committee on Thursday approved a program to be operated by the U.S. National Telecommunications and Information Administration (NTIA) in the Department of Commerce. The NTIA Broadband Deployment Grants program, with a budget of about $2.9 billion, would require that recipients of the money follow net neutrality rules.

About 25 percent of the money would go to areas in the U.S. not covered by any broadband providers. The other 75 percent would go to underserved areas, with the U.S. Federal Communications Commission to define underserved areas.

The money going to unserved areas would focus on providing basic broadband service of more than 5Mbps of downstream speed for wired broadband or basic wireless broadband, according to the bill language.

In order to quality for the 75 percent of the money going to underserved areas, a wired broadband provider would have to deploy service offering 45Mbps downstream speed, and a wireless broadband provider would have to provide 3Mbps of downstream speed.

The bill includes "an investment in expanding broadband Internet access so that businesses and households in rural and other underserved areas can link to the global economy," said Energy and Commerce Committee Chairman Henry Waxman. "Broadband investments are important because they have a tremendous multiplier effect on our economy."

The full House could vote on the stimulus package as early as next week.

Several economists, as well as members of President Barack Obama's administration, have argued that broadband spending would recirculate through the U.S. economy and create thousands of new jobs.

Public Knowledge, a consumer rights group, praised the committee for keeping the net neutrality, or open access, provisions in the bill. Those provisions could require broadband providers to allow outside devices, such as wireless phones and broadband devices, to connect to their networks, and they would prohibit broadband providers from blocking or slowing content from competitors.

The House Appropriations Committee also approved the broadband provisions, complete with open-access requirements, late Wednesday.

"Both committees approved draft economic stimulus legislation, leaving intact provisions that recipients of stimulus grant funds be required to follow build-out requirements, Federal Communications Commission's net neutrality guidelines and open-access requirements," said Gigi Sohn, president of Public Knowledge. "The forward-looking actions by these committees are the first steps to enacting President Obama's technology platform that will lead to putting Americans back to work, stimulating the economy and improving America's competitiveness."

Last week, the House Appropriations Committee recommended $6 billion in broadband-deployment spending as part of the larger economic stimulus package. In addition to the new NTIA program, the Appropriations Committee recommended $2.8 billion for the Rural Utilities Service (RUS) of the U.S. Department of Agriculture, to give as grants and loans to broadband providers.

The RUS program doesn't fall under the Energy and Commerce Committee's jurisdiction.

Late Thursday, the committee continued to work on provisions that would include $20 billion for health IT programs and $11 billion for an Internet-based smart electricity grid.

"Today this committee has a big job," said Waxman, a California Democrat. "Our nation's economy is floundering, and we need to respond. We are in a deep and long recession."

Earlier Thursday, leaders of four technology trade groups, as well as executives at 116 tech-related companies, called on Congress to quickly pass the technology provisions in the economic stimulus package. The stimulus package would cost $825 billion under the House Appropriations Committee's plan.

"Investments in America's digital infrastructure will spur significant job creation in the immediate term," the tech CEOs said in a letter to congressional leaders. "An investment of $40 billion, which we believe is a critical starting point, also promises to increase productivity and competitiveness over the long-term." The letter was signed by CEOs of IBM, Dell, Red Hat, Cisco Systems and other companies.

Government spending on IT will help not only the IT industry but other U.S. businesses, said Chris Hansen, CEO of the Technology Association of America. "We're talking about the competitiveness of other industries, of other enterprises in this country," Hansen said during a press conference. "This technology is what allows them to be competitive."

In addition to the new IT spending, Congress can also spur broadband by cutting telecom taxes, added Bruce Mehlman, executive director of the Technology CEO Council. Telecom taxes passed as taxes on the rich in the late 1800s still exist, he said.

"We live in a digital age, but we still treat telecom like a luxury, we tax it like a sin, and we regulate it like a utility," he said.

Copyright © 2009 IDG Communications, Inc.

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