TIA Recommends Broadband Incentives for Economic Stimulus Plan

Monday, Dec 15, 2008

The Telecommunications Industry Association (TIA) published a list of recommendations that it hopes will become part of the Economic Stimulus Plan being drafted by congressional leaders and the incoming Obama administration. The proposal encompasses targeted incentives designed to stimulate investment across both wireless and fixed broadband.

 The TIA proposal also build upon a proposal by the Communications Workers of America (CWA), which estimates that every $5 billion invested would create 97,500 direct jobs and 2.5 million jobs throughout the economy. The TIA proposal outlines specific recommendations for tiers of service and tax benefits. These include the following.

For wireless broadband infrastructure: 75% expensing or 15% investment tax credit for networks capable of 1.5 mbps downstream/ 384 kbps upstream and 100% expensing or 20% credit for 3 mbps downstream/ 1 mbps upstream; and 40% investment credit for a network providing 5 mbps downstream/ 1 mbps upstream.

For fixed broadband infrastructure: 50% expensing or 10% investment tax credit for networks capable of 3 mbps downstream/ 1 mbps upstream, 75% expensing or 15% credit for 25 mbps downstream/ 5 mbps upstream; 100% expensing or 20% credit for 50 mbps downstream/ 20 mbps upstream; and 40% investment credit for a network providing 100 mbps downstream/ 20 mbps upstream. For satellite broadband infrastructure, TIA said tax benefits associated with particular service capabilities remain to be determined.

The CWA proposal also suggests “direct grants” for rural broadband deployments. TIA agrees and would suggest a $25 billion grant program for deployment of broadband infrastructure in unserved areas. The grant program would be a technology neutral opportunity for interested providers to bid for partial subsidies to provide broadband service, at minimum speeds and appropriate capabilities to be determined by the Federal Communications Commission (FCC), to all households and businesses in a particular unserved area. A grant program such as this would finally bring broadband services to all parts of the nation without creating the need for an ongoing service subsidy.

TIA is also urging Congress to consider measures that will stimulate the demand for broadband.