USF Hearing Raises Questions June 26th, 2008

On Tuesday, I attended the House Telecom Subcommittee hearing on universal service, where a notable witness-filmmaker George Lucas-came to testify on the benefits of broadband for education.  Lucas, whose George Lucas Educational Foundation works to integrate technology in education, told the subcommittee that “access to modern telecommunications tools for education should be viewed as a digital civil right.”

Chairman Ed Markey (D - Mass.) noted that there are a lot of questions related to universal service that need to be tackled in reforming the program, including the big question of whether or not the universal service system should be used to support broadband service.  The representatives in attendance at the hearing-and the witnesses-were divided on the issue of using USF dollars for broadband.

Two Congressmen who are not divided on the broadband issue, Reps. Joe Barton (R - Texas) and Cliff Stearns, (R - Fla.), introduced legislation yesterday to reform universal service.  Their bill would limit USF support to voice services only (closing the door on the broadband debate) and it includes some substantial belt-tightening measures, including a hard cap on funding, stricter eligibility requirements for areas qualifying for assistance, and reverse auctions.

USTelecom Urges Support for E-911 Bill June 13th, 2008

Last week, USTelecom President and CEO Walter B. McCormick Jr. sent a letter urging passage of the Senate/House agreed version of H.R. 3403—the New and Emerging Technologies 911 Improvement Act of 2008—to the House and Senate Leadership, the Chairs and Ranking Members of the relevant committees and subcommittees, and to the sponsoring Members. In the letter, Walter noted that “USTelecom members have been proud to assist IP-enabled voice service providers in their efforts to comply with existing 911 requirements, helping them attain nearly 100 percent coverage with 911 and Enhanced 911 (E-911) services” and expressed support for the legislation, which, in his words, “recognizes the need for a national IP enabled emergency network that can accommodate emerging network architectures, platforms, and devices and coordinate the sharing of information among a variety of response entities.”

House Passes Tax Extenders Bill May 23rd, 2008

On Wednesday, the House of Representatives approved the Renewable Energy and Job Creation Act of 2008 (H.R. 6049)—a package of tax extenders and incentives—by a vote of 263 to 160. According to the bill’s summary, it includes extenders for a number of expiring temporary tax provisions, including the research and development tax credit. The R&D credit, which expired at the end of last year, is extended for one year.

The White House issued a Statement of Administration Policy, noting that although the president supports elements of the bill—including the R&D credit, active financing provisions, and relief for individuals—he would veto it if it were sent to him as-is. The administration objects to the revenue-generating offsets included in the bill and to the lack of a patch for the alternative minimum tax. The Senate is scheduled to markup its tax extenders bill sometime in June.

USTelecom Vidcast: Bill Deere on the Farm Bill May 19th, 2008

Following last Wednesday’s passage in the House by a margin of 318-106, the full Senate voted on Thursday to approve the Farm Bill. The bill will reauthorize the Rural Utilities Service’s broadband loan program, and it contains language recommended by USTelecom to strengthen the program by better targeting unserved areas and opening up the program to more borrowers. USTelecom President and CEO Walter B. McCormick Jr. hailed the bill’s passage, noting that “broadband creates countless new opportunities in rural America through e-health programs, distance learning, and energy conservation and this bill will help ensure that all consumers enjoy the same benefits from high-speed Internet services, regardless of where they live. We strongly urge the Senate to pass the bill quickly to get it to the President’s desk.”

President Bush has pledged to veto the bill due to its $300 billion price tag over five years and the inclusion of multiple earmarks and agricultural subsidies–objections that are unrelated to the RUS and the broadband loan program. However, given the overwhelming margins by which the bill passed in both chambers, a Congressional override of the president’s veto seems imminent.

Just after the Senate vote, we talked with Bill Deere, USTelecom’s vice president for government affairs, about the legislation.

USTelecom Vidcast: Phantom Traffic May 9th, 2008

With a recent Senate hearing and a new bill released by Sen. Ted Stevens (R - Alaska), the FCC may have a new incentive to act on the issue of phantom traffic. To talk about the issue and what the recent Congressional action might mean at the FCC, we sat down recently with USTelecom’s Glenn Reynolds, VP for policy, and Bill Deere, VP for Government Affairs.

Walter McCormick before the House Telecom Subcommittee May 6th, 2008

In testimony before the House Telecom Subcommittee of the Committee on Energy and Commerce, USTelecom President and CEO Walter B. McCormick Jr. urged Congress to take the time to gather the facts on broadband deployment before enacting premature legislation that could impede investment and innovation in broadband that helps protect the environment and delivers better health care and education services to consumers. Hear the testimony; read the news release or listen to the testimony.

Muni Wi-Fi Bill Would Chill Private Investment February 27th, 2008

Yesterday, USTelecom’s Walter McCormick, along with the heads of several other associations, sent a letter to the leadership of the House Telecom & Internet Subcommittee about Chairman Markey’s (D - Mass.) “Wireless Consumer Protection and Community Broadband Empowerment Act of 2008” (PDF). Title II of the bill, “Community Broadband Empowerment,” would keep states and localities from passing laws preventing broadband service provision by public entities, including municipalities.

In opposing that provision, the letter states:

[F]ederal municipal broadband legislation would chill private investment in existing and future broadband networks. This ultimately leads to less, not more, broadband deployment as the investment risk for private entities is unnecessarily increased and private capital is displaced with public funds, needlessly burdening taxpayers. Additionally, federal municipal broadband legislation encourages cherry picking the easier to serve areas within town limits, diminishing the feasibility of broadband service in the more costly to serve outlying areas.

As the letter points out, municipal broadband projects around the country—San Francisco, Houston, New Orleans, Chicago, Philadelphia—are being abandoned, privatized, or substantially scaled back; that’s an expensive lesson for a municipality to learn. The letter also notes that 14 states already regulate the ability of municipalities to provide broadband with public funds.

The goal of wider availability of broadband is certainly a good one, but recent history has shown that municipal broadband projects just might not be the best way to go, especially as networking technologies continue to evolve. Congress should continue to work with broadband providers to improve deployment and availability through things like the RUS broadband loan program and public-private partnerships such as ConnectKentucky.

Markey Bill “Antithetical” to Congress’ Innovation Agenda February 14th, 2008

On Tuesday, Reps. Ed Markey (D – Mass.) and Chip Pickering (R – Miss.) introduced H.R. 5353, Chairman Markey’s latest attempt to codify the nebulous concept of network neutrality. Although the bill looks different than its 2006 predecessor, it still holds significant potential to erode innovation and investment in broadband networks, which will in turn hamper efforts to bring broadband’s benefits to more Americans. USTelecom’s Walter McCormick issued a statement on the bill, calling it “antithetical to the Congressional innovation agenda.”

The Markey bill is clearly written to the foregone conclusion that regulation of the Internet is necessary today—despite the absence of real-world “problems” for the government to “fix.” This approach would needlessly inject substantial uncertainty into our economy and dampen the investment climate for continued broadband deployment in our communities. With nearly 1,400 broadband service providers in the U.S. today, consumers should be driving broadband’s evolution, not Congress. If the national objective is bringing broadband’s promise to all Americans, then we have far better options than government regulation. From innovative, public-private partnerships like Connect Kentucky to progress in the Farm Bill to target rural broadband loans to unserved areas, we are finding constructive ways for the government, local communities and private companies to work together. A return to the policies of the past would be a real setback to the broadband future. It’s our hope that Congress will maintain its focus on encouraging continued progress in our efforts to bring broadband to all Americans.

President Signs Stimulus Package February 13th, 2008

Today, President Bush signed into law an economic stimulus package that includes tax rebate checks for individuals (including senior citizens and veterans), business tax benefits, and housing provisions. The bill, a compromise reached last week by the House and the Senate, includes two business tax provisions to assist business investment made in 2008. The first is a 50 percent bonus depreciation allowance for new equipment purchased and placed into service this year. (The deduction is allowable for regular and alternative minimum tax purposes.) Important for USTelecom members, whose outside plant and equipment tend to have longer asset lives, the one-year extension of the placed-in-service date (to January 1, 2010) is provided for certain property with a recovery period of 10 years or longer. The new law also increases the expensing limit for small businesses this year – by allowing them to immediately deduct up to $250,000 for both new and used tangible property purchased and placed in service in 2008, with an investment phase-out threshold of $800,000.

The importance of including measures in the stimulus package to encourage new investment can’t be stressed enough, especially when it comes to encouraging investment in information and communications networks. Robust, ubiquitous broadband is a key driving force in our economy, so policies that encourage investment and create incentives for infrastructure improvements in broadband spur growth in other industries, as well. Of course we’re glad that both Congress and the administration recognized that fact when considering these economic relief measures; hopefully they’ll continue to press for investment-friendly policies and consider some more lasting measures, such as updating the outdated depreciation schedule for telecom equipment!