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US broadband stimulus could reach $9bn

Senate draft adds $3bn, tax incentives

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The latest draft of President Obama's $835bn infrastructure economic stimulus package increases the budget for expanding broadband to under-served areas from $6bn to $9bn and includes tax breaks for ISPs that build new wired and wireless networks.

While the US Senate is still drafting its version of the stimulus package, its current form tacks on an extra $3bn towards building broadband infrastructure for America's rural and other under-served areas.

The House's version of the bill reserves $6bn for broadband expansion and is expected to be voted on today.

The Senate draft also includes a proposal to offer tax credits for ISPs to build high-speed internet infrastructure.

The added proposal, sponsored by Republican Senator Olympia Snow and Democrat Jay Rockefeller, would offer a 10 per cent tax credit for construction expenditures towards "current internet speeds" in under-served areas. The bill defines current speeds as 5Mb/s download and 1Mb/s upload.

ISPs that invest in "next generation" infrastructure in those areas will receive a 20 per cent tax credit. Next-gen is defined as 100Mb/s download and 20Mb/s upload.

The 20 per cent tax credit would also be provided providers constructing wireless broadband infrastructure for under-served areas, so long as they reach at least 3Mb/s download and 768kb/s upload.

Both current House and Senate versions of the stimulus package also mention some requirements for eligible ISPs not to discriminate based on the protocols or applications going through the network.

The House version offers the grants and loans only to "open access broadband infrastructure." The Senate draft appears to water down the language to requiring "nondiscrimination and network interconnection" from grant recipients.

Exactly how that gets harmonized by both chambers of Congress — if at all — will no doubt be of considerable interest to net neutrality advocates.

Of course, major internet providers have always vehemently opposed legislation for open internet access, so the requirement will almost certainly will be put through the wringer by ISP lobbyists before a final version is voted on by Congress. ®

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