Panel to approve tax credits for rural broadband rollout

The Senate Finance Committee later today is expected to make tax credits available to wireless carriers and others in the telecom industry that expand broadband networks to rural and low-income urban areas with little or no high-speed Internet access.
Sen. Jay Rockefeller (D-W.Va.), a senior member of the finance panel and chairman of the Senate Commerce Committee, plans to offer an amendment this afternoon that provides a 10% tax credit to service providers that invest in current generation broadband (defined as at least 5 Mbps downlink and 1Mbps uplink) infrastructure in unserved and underserved portions of the country A 20% tax credit would be available to carriers that bring next-generation broadband (100 Mbps downlink and 20 Mbps uplink) networks to those areas. However, commercial mobile wireless carriers would be eligible for the 20% tax credit if they offer broadband service at speeds of at least 3 Mbps downlink and 768 Kbps unlink in unserved and underserved locales.
“The wireless industry has never before been the subject of such of such generous tax treatment from the Senate Finance Committee for the deployment of mobile data service,” said Jessica Zufolo, a telecom analyst at Medley Global Advisors L.L.C. “In many ways, this amendment is a recognition of their service as a leading technological solution in rural and urban poor markets.” As such, she said a broader pool of wireless providers should be able to qualify for favorable broadband tax treatment.
Provisions in the House economic stimulus legislation include a total $6 billion in broadband grants ($1 billion directly to wireless), but no tax breaks. The Senate Appropriations Committee is advancing a measure that would include $9 billion in broadband grants.