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Broadband Stimulus Package: How To Spend $6 Billion

Proposed legislation in the Senate would give a hefty tax credit to service providers offering 100-Mbps speeds and up.

Just about everybody believes broadband is a good thing, including most members of the U.S. Senate and House, who are close to approving at least $6 billion to spread broadband. But now the qualifications are emerging.

If you build it will they use it? Should taxpayers subsidize companies for broadband infrastructure they were already planning to install and profit from? Who will pay for computers the elderly and the disadvantaged likely will need to access broadband? Should broadband wireless access -- which is just beginning to be deployed -- be included in the broadband package, which itself will be included in the overall stimulus program being debated?

Proposed legislation in the Senate would give a hefty tax credit to service providers offering 100-Mbps speeds and up -- making, for instance, Verizon's FiOS a likely beneficiary. But cable companies, which will have trouble reaching 100-Mbps speeds, want tax credit for 50 Mbps.

Members of both legislative bodies have been working overtime all week to hammer out legislation covering broadband.

The legislators are grappling with a survey report released last week by the Pew Internet & American Life Project that found many Americans don't want broadband and another sizable group doesn't have the computers or smartphones that would enable them to use the Internet.

"When half of dial-up and nonusers cite reasons such as 'not interested' or 'nothing could get me to switch,' it seems clear that networked digital resources do not play enough of a role in their lives to justify a broadband connection," said John Horrigan, associate director for research at the research organization.

In the past, Horrigan has pointed out that there's a lack of solid data from the federal government on existing broadband usage. Most independent studies show the United States dropping behind many other industrialized nations in deployment of broadband.

Sen. Tom Harkin, D-Iowa, chairman of the Senate Agriculture Committee, has been arguing for a substantial amount of the funds to be given to the Agriculture Department. But others want the funding to be controlled by the National Telecommunications and Information Administration, which recently spent all of the $1.34 billion it had been allocated for the analog-to-digital TV broadcast switch.

As of Friday, Senate and House sources said the final broadband package is likely to range between $6 billion and $9 billion.

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