House Democrats poised to include $8B in stimulus for broadband in rural areas

House appropriators are poised to unveil legislative language for President-elect Obama's economic stimulus package that would provide roughly $8 billion in grants to spur the provision of high-speed Internet access to rural areas lacking service.

The package is expected to contain billions of dollars more for grants to upgrade classrooms with cutting-edge technology and connect underprivileged schools with broadband service.

Sources within the telecommunications industry and on Capitol Hill said the proposal to extend rural broadband availability could be released as early as today. Many remote areas have been bypassed by providers of high-speed Internet access because their sparse populations and rugged locations make them too costly to serve.

Rep. Anna Eshoo, D-Calif., a member of the House Energy and Commerce Communications and the Internet Subcommittee, has been a major proponent of spending more federal dollars to expand the reach of the Internet. The money, to be reconciled with a Senate version still being negotiated, represents a partial victory for the telecom industry, which has sought federal funding ranging from $5 billion to $44 billion to spur greater broadband access.

By focusing on areas without any broadband connectivity, the House proposal is narrower in scope than some industry players had wanted. It apparently would not provide grants for companies to build out their networks to areas served by competitors, a Capitol Hill source said, though some industry sources disputed that assertion.

On Wednesday, Blair Levin, a key technology adviser on the Obama transition team, sought to downplay expectations about the scope of broadband funding in the stimulus package during a speech at a telecom industry conference.

The investment firm Stifel Nicolaus, from which Levin has taken a leave of absence, said in an advisory Wednesday that a comparatively modest sum would "limit the impact" on companies such as AT&T, Cisco, eBay, Google, Microsoft, Qwest, Yahoo and Verizon that were hoping for a major economic jolt.

In addition to the grant money, likely to be doled out by the FCC or the Rural Utilities Service loan program run by the Agriculture Department, the House proposal also contains general tax incentives, such as accelerated depreciation of assets, that telecom companies and other industries could take advantage of.

At presstime, sources said it appeared that the House Ways and Means Committee had not agreed to the inclusion of tax incentives aimed only at boosting broadband deployment. Despite the panel's reluctance, telecom industry officials were making a last-minute push to secure those breaks.

On a related technology initiative, education industry sources told CongressDaily they have received assurances that the economic stimulus package would contain money to add computers and other gear to classrooms and increase broadband connections for schools under state block grant efforts.

Don Knezek, CEO of the International Society for Technology in Education, said he expects the incoming Obama administration to provide about $2 billion for classroom technology, though he and other sources cautioned that the precise amount House lawmakers would propose is unclear. "We have indications that it's going to be significant," he said.

His education group and others are pushing for much more -- nearly $10 billion to reach the most economically disadvantaged schools nationwide. And they want the money to go to grade schools, community colleges and public universities.

The funding would be doled out through the Enhancing Education Through Technology grant program administered by the Education Department and would pay for equipment such as computers, video recorders, cell phones and interactive whiteboards, which are large displays that connect to computers and projectors.