Stimulus Includes $6 Plus Billion for Broadband Grants
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A tax credit designed to spur telecom companies to build out Internet networks in unserved and underserved areas has been dropped from an economic stimulus conference report as lawmakers agreed on more than $6 billion in Internet grants, according to Capitol Hill sources.
The news came as House conferees were still mulling the compromise bill, which President Barack Obama wants on his desk by next week.
Congressional leadership aides say the conferees are expected to convene later Wednesday after the House has reviewed the compromise measure.
People familiar with the Internet piece of the stimulus bill noted that it is still possible to work out a deal on the tax credit. But with limited time and disagreement in the telecom industry about it, a deal is unlikely.
The Internet grants are a boon to mid-sized and small carriers like Qwest Communications International Inc. (Q) that need an extra push to build out from their current markets. Qwest said Tuesday that it is prepared to extend high-speed Internet service to up to 2 million homes.
The Internet grants would be split between the Commerce Department and the U.S. Department of Agriculture. The Commerce Department would get about $4 billion. USDA would get about $2.8 billion to disperse loans and grants to small rural carriers who want to extend their Internet service to their entire markets.
The loss of the Internet tax credit is a disappointment for Senate Commerce Committee Chairman John Rockefeller, D-W.Va., who has introduced legislation like this for the last 10 years.
Industry lobbyists and analysts say tax credits are more attractive to larger companies like Verizon Communications Inc. (VZ) and AT&T Inc. (T) because they pay substantial corporate taxes.
Cable companies like Comcast Corp. (CMCSA) also could benefit from a tax credit, although cable officials said they had questions about what types of investments would qualify under the stimulus bill.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com
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Publié le 11 Février 2009 Copyright © 2009 Dowjones
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