Senators propose incentives for companies that develop broadband services in rural areas
Two pairs of U.S. senators introduced bills Tuesday aimed at enticing companies
to expand broadband services in rural areas.
"It is critical to economic development," said Don Marshall, the spokesman
for Sen. Jay Rockefeller (D-W.Va.), who co-sponsored one of the bills. "To
run a new business in the new economy, companies must have access to broadband
The bills take different approaches to persuading companies to bring the
technology that enables fast Internet connections to rural areas. Firms
are inclined to avoid developing the infrastructure in rural areas because
the distances between homes and businesses makes it an expensive process.
Sen. Byron Dorgan's (D-N.D.) and Sen. Tom Daschle's (D-S.D.) Rural Broadband
Enhancement Act is modeled after the Rural Electrification Act that brought
electricity to rural areas. It would establish over five years a $3 billion
revolving loan fund.
That fund would provide low-interest loans to finance construction of broadband
infrastructure in rural areas. The loans would be repayable over 30 years
at two percent interest.
Rockefeller's and Sen. Olympia Snowe's (R-Me.) Rural Telecommunications
Modernization Act would offer companies that invested in rural broadband
facilities a 10 percent tax credit per year for three years.
The credit would apply only to investments for "broadband local access facilities,"
providing equipment such as fiber optics, Digital Subscriber Line, wireless
enhancements and cable TV network upgrades that would provide high-speed
Dorgan's spokesman, Barry Piatt, said loans would be a "more aggressive
and effective" system because they provide "upfront financing." Loans are
also more appealing, he said, because the government is paid back.
Don Marshall, Rockefeller's spokesman, said that although he has not read
Dorgan and Daschle's bill, he felt that neither was "better than the other
and conceivably they both could work together."
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