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New think tank advocates broadband incentives

Apr 14, 20063 mins
BroadbandManufacturing IndustryNetworking

New laws should create tax incentives for companies to roll out new broadband networks to help increase the use of broadband in the home, says think tank.

The government needs to pass new laws to help increase the numbers of residents subscribing to broadband, according to a report released this week by a new technology policy think tank.

New laws should be passed to exempt broadband service from local and some federal taxes for about five years, and the government should create tax incentives for companies to roll out new broadband networks, said the report by the Information Technology and Innovation Foundation (ITIF). The United States is currently ranked 12th among member nations for broadband adoption, according to the Organization for Economic Cooperation and Development, in a report published Tuesday.

The nation is in danger of losing its economic edge and its IT leadership, said Rob Atkinson, president of ITIF and author of the report.

“The speed and ubiquity of broadband in [South] Korea has made it a test-bed for the next generation of Internet-based services and products, including online games, education and consumer electronics,” the ITIF report says. “Countries at the broadband leading edge are more likely to experience more of these kinds of benefits than laggards.”

Countries with the highest broadband adoption and fastest speeds will be breeding grounds for new innovation, Atkinson said. Broadband is a major tool for improving the economy, with high-speed Internet services leading to better health care, education and worker productivity gains, he added.

In addition to other measures, Congress should streamline the cable television franchising requirements faced by broadband providers looking to offer VoIP, and it should refrain from imposing so-called build-out requirements that would force new video providers to serve entire cities, said Atkinson, formerly vice president of the Progressive Policy Institute.

The House of Representatives Energy and Commerce Committee is pushing forward legislation that would create a national franchise for video providers, but among the debates is whether Congress should require video providers to immediately offer services to poor or sparsely populated areas.

While some countries with high adoption rates created large programs to aid broadband rollout, the U.S. could take a few steps that would be more politically feasible to the Republican-controlled Congress, Atkinson said. His paper calls for Congress to create a tax incentive for broadband providers by allowing faster depreciation of broadband equipment. The paper also says new broadband networks should also be exempt from federal Universal Service Fund taxes, which help pay for telecom services in rural and poor areas, as well as schools and libraries.

Several countries, including Japan, South Korea and France, offer residents broadband services with upstream rates several times faster than U.S. broadband, often at a fraction of the price to the consumer, Atkinson said. “The reality is, in many of these other countries, the reason they’re getting 20-, 30- and 100-megabit speed is because the government said, ‘This is a national priority,'” he added.

ITIF launched in late March. While other think tanks include technology policy as one of their missions, ITIF’s focus will be on accelerating broadband, e-commerce and IT adoption, Atkinson said. ITIF was founded with “the idea that more [technology] is better,” he said. Former members of Congress Jennifer Dunn (R-Wash) and Calvin Dooley (D-Calif), are co-chairmen of the think tank.