Stimulus bill includes $7.2B for broadband grants, but drops tax credits for service providers

The $789 billion economic stimulus bill nearing final congressional passage designates $7.2 billion for broadband grants, but the measure lacks tax credits for wireless carriers and other service providers.
Crafting rules for broadband grants could become highly controversial, since guidelines governing eligibility, data speeds, nondiscrimination and interconnection obligations and unserved and underserved areas may well determine the ultimate winners and losers. The main objective of the broadband grant program is to create jobs in the near term, but the Obama administration and congressional Democrats plan to take additional steps later to expand the availability of high-speed Internet access in the United States.
The stimulus bill’s final language agreed to by conferees, who worked surprising fast to reconcile differences between House and Senate economic recovery packages, does not include a specific earmark of $1 billion for wireless broadband grants. Such an earmark had been included in the House measure.
Nonetheless, the final bill appears to keep the wireless and tower sectors clearly in the ball game.
“The conferees noted their desire for broad participation by wireless carriers, wireline carriers, backhaul providers, satellite carriers, public-private partnerships and tower companies,” stated analysts at Stifel, Nicolaus & Co. Inc. “They also clarified that broadband needs could be served by any provider able to construct last-mile, middle-mile or long-haul facilities, and throughout the country’s rural, suburban and urban areas.”
The legislation creates a new Broadband Technology Opportunities Program at the National Telecommunications and Information Administration, a unit of the Commerce Department that would oversee the distribution broadband grants – totaling $4.7 billion – to unserved and underserved areas. Grant recipients would have to underwrite up 20% of the proposed project’s cost, though hardship waivers will be available. The bill requires all NTIA broadband grants to be awarded by September 2010.
The remaining $2.5 billion in broadband grants will be administered by the Agriculture Department’s Rural Utilities Service.
President Obama is expected to sign the economic stimulus legislation into law on President’s Day.