New think tank advocates broadband incentives

The U.S. needs to pass new laws to help increase the numbers ofresidents subscribing to broadband, according to a report releasedthis week by a new technology policy think tank.

The U.S. government should pass new laws exempting broadbandservice from local and some federal taxes for about five years, andit should create tax incentives for companies to roll out newbroadband networks, said the report by the Information Technologyand Innovation Foundation (ITIF). The U.S. is currently ranked 12thamong member nations for broadband adoption, according to theOrganization for Economic Cooperation and Development, in a reportpublished Tuesday.

The nation is in danger of losing its economic edge and its ITleadership, said Rob Atkinson, president of ITIF and author of thereport.

“The speed and ubiquity of broadband in [South] Korea has madeit a test-bed for the next generation of Internet-based servicesand products, including online games, education and consumerelectronics,” the ITIF report says. “Countries at the broadbandleading edge are more likely to experience more of these kinds ofbenefits than laggards.”

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

In addition to other measures, the U.S. Congress shouldstreamline the cable television franchising requirements faced bybroadband providers looking to offer video over IP (InternetProtocol), and it should refrain from imposing so-called build-outrequirements that would force new video providers to serve entirecities, said Atkinson, formerly vice president of the ProgressivePolicy Institute.

The House of Representatives Energy and Commerce Committee ispushing forward legislation that would create a national franchisefor video providers, but among the debates is whether Congressshould require video providers to immediately offer services topoor or sparsely populated areas.

While some countries with high adoption rates created largeprograms to aid broadband rollout, the U.S. could take a few stepsthat would be more politically feasible to theRepublican-controlled Congress, Atkinson said. His paper calls forCongress to create a tax incentive for broadband providers byallowing faster depreciation of broadband equipment. The paper alsosays new broadband networks should also be exempt from federalUniversal Service Fund taxes, which help pay for telecom servicesin 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 severaltimes faster than U.S. broadband, often at a fraction of the priceto the consumer, Atkinson said. “The reality is, in many of theseother countries, the reason they’re getting 20-, 30- and100-megabit speed is because the government said, ‘This is anational priority,'” he added.

ITIF launched in late March. While other think tanks includetechnology policy as one of their missions, ITIF’s focus will be onaccelerating 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, a Washingtonstate Republican, and Calvin Dooley, a California Democrat, areco-chairmen of the think tank.

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