[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1479 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 1479
To expand rural access to broadband services.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 5, 2005
Mr. Udall of Colorado (for himself and Mr. Salazar) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committees on Science and Energy and Commerce,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To expand rural access to broadband services.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rural Access to Broadband Service
Act''.
SEC. 2. RURAL BROADBAND OFFICE.
(a) Establishment.--There is established within the Department of
Commerce, the Rural Broadband Office.
(b) Duties.--The Office shall coordinate all Federal Government
resources as they relate to the expansion of broadband technology into
rural areas.
(c) Report.--Not later than 1 year after the date of the enactment
of this Act, and annually thereafter, the Rural Broadband Office shall
submit a report to the Congress that--
(1) assesses the availability of, and access to, broadband
technology in rural areas;
(2) estimates the number of individuals using broadband
technology in rural areas;
(3) estimates the unmet demand for broadband technology in
rural areas; and
(4) sets forth a strategic plan to meet the demand
described in paragraph (3).
SEC. 3. RESEARCH ON ENHANCEMENT OF BROADBAND TELECOMMUNICATIONS
SERVICES.
(a) In General.--The Director of the National Science Foundation
(in this section, referred to as the ``Director'') shall carry out
research on the following:
(1) Means of enhancing or facilitating the availability of
broadband telecommunications services in rural areas and other
remote areas.
(2) Means of facilitating or enhancing access to the
Internet through broadband telecommunications services.
(b) Scope of Authority.--The Director may carry out research under
subsection (a) within the National Science Foundation or pursuant to
such grants, agreements, or other arrangements as the Director
considers appropriate.
(c) Results of Research.--The Director shall make available to the
public, in such manner as the Director considers appropriate, the
results of any research carried out under this section.
(d) Authorization of Appropriations.--There is authorized to be
appropriated for the National Science Foundation for purposes of
activities under this section $25,000,000 for fiscal year 2006, and
such sums as are necessary for each fiscal year thereafter.
SEC. 4. FULL FUNDING FOR RURAL BROADBAND SERVICES.
It is the sense of Congress that the loan program established in
section 4 of the Rural Electrification Act of 1936 (7 U.S.C. 901 et
seq.), which is essential to the economic well-being of small
telecommunications providers and to the quality of life for all rural
residents, be funded fully.
SEC. 5. EXPENSING OF BROADBAND INTERNET ACCESS EXPENDITURES FOR RURAL
COMMUNITIES.
(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to itemized deductions for
individuals and corporations) is amended by inserting after section 190
the following new section:
``SEC. 191. BROADBAND EXPENDITURES FOR RURAL COMMUNITIES.
``(a) Treatment of Expenditures.--
``(1) In general.--A taxpayer may elect to treat any
qualified broadband expenditure which is paid or incurred by
the taxpayer as an expense which is not chargeable to capital
account. Any expenditure which is so treated shall be allowed
as a deduction.
``(2) Election.--An election under paragraph (1) shall be
made at such time and in such manner as the Secretary may
prescribe by regulation.
``(b) Qualified Broadband Expenditures.--For purposes of this
section--
``(1) In general.--The term `qualified broadband
expenditure' means, with respect to any taxable year, any
direct or indirect costs incurred and properly taken into
account with respect to--
``(A) the purchase or installation of qualified
equipment (including any upgrades thereto), and
``(B) the connection of such qualified equipment to
any qualified subscriber.
``(2) Certain satellite expenditures excluded.--Such term
shall not include any costs incurred with respect to the
launching of any satellite equipment.
``(3) Leased equipment.--Such term shall include so much of
the purchase price paid by the lessor of qualified equipment
subject to a lease described in subsection (c)(2)(B) as is
attributable to expenditures incurred by the lessee which would
otherwise be described in paragraph (1).
``(c) When Expenditures Taken Into Account.--For purposes of this
section--
``(1) In general.--Qualified broadband expenditures with
respect to qualified equipment shall be taken into account with
respect to the first taxable year in which--
``(A) current generation broadband services are
provided through such equipment to qualified
subscribers, or
``(B) next generation broadband services are
provided through such equipment to qualified
subscribers.
``(2) Limitation.--
``(A) In general.--Qualified expenditures shall be
taken into account under paragraph (1) only with
respect to qualified equipment--
``(i) the original use of which commences
with the taxpayer, and
``(ii) which is placed in service, after
the date of the enactment of this section.
``(B) Sale-leasebacks.--For purposes of
subparagraph (A), if property--
``(i) is originally placed in service after
the date of the enactment of this section by
any person, and
``(ii) sold and leased back by such person
within 3 months after the date such property
was originally placed in service, such property
shall be treated as originally placed in
service not earlier than the date on which such
property is used under the leaseback referred
to in clause (ii).
``(d) Special Allocation Rules.--
``(1) Current generation broadband services.--For purposes
of determining the amount of qualified broadband expenditures
under subsection (a)(1) with respect to qualified equipment
through which current generation broadband services are
provided, if the qualified equipment is capable of serving both
qualified subscribers and other subscribers, the qualified
broadband expenditures shall be multiplied by a fraction--
``(A) the numerator of which is the sum of the
number of potential qualified subscribers within the
rural areas which the equipment is capable of serving
with current generation broadband services, and
``(B) the denominator of which is the total
potential subscriber population of the area which the
equipment is capable of serving with current generation
broadband services.
``(2) Next generation broadband services.--For purposes of
determining the amount of qualified broadband expenditures
under subsection (a)(1) with respect to qualified equipment
through which next generation broadband services are provided,
if the qualified equipment is capable of serving both qualified
subscribers and other subscribers, the qualified expenditures
shall be multiplied by a fraction--
``(A) the numerator of which is the sum of--
``(i) the number of potential qualified
subscribers within the rural areas, plus
``(ii) the number of potential qualified
subscribers within the area consisting only of
residential subscribers not described in clause
(i), which the equipment is capable of serving
with next generation broadband services, and
``(B) the denominator of which is the total
potential subscriber population of the area which the
equipment is capable of serving with next generation
broadband services.
``(e) Definitions.--For purposes of this section--
``(1) Antenna.--The term `antenna' means any device used to
transmit or receive signals through the electromagnetic
spectrum, including satellite equipment.
``(2) Cable operator.--The term `cable operator' has the
meaning given such term by section 602(5) of the Communications
Act of 1934 (47 U.S.C. 522(5)).
``(3) Commercial mobile service carrier.--The term
`commercial mobile service carrier' means any person authorized
to provide commercial mobile radio service as defined in
section 20.3 of title 47, Code of Federal Regulations.
``(4) Current generation broadband service.--The term
`current generation broadband service' means the transmission
of signals at a rate of at least 1,000,000 bits per second to
the subscriber and at least 128,000 bits per second from the
subscriber.
``(5) Multiplexing or demultiplexing.--The term
`multiplexing' means the transmission of 2 or more signals over
a single channel, and the term `demultiplexing' means the
separation of 2 or more signals previously combined by
compatible multiplexing equipment.
``(6) Next generation broadband service.--The term `next
generation broadband service' means the transmission of signals
at a rate of at least 22,000,000 bits per second to the
subscriber and at least 5,000,000 bits per second from the
subscriber.
``(7) Nonresidential subscriber.--The term `nonresidential
subscriber' means any person who purchases broadband services
which are delivered to the permanent place of business of such
person.
``(8) Open video system operator.--The term `open video
system operator' means any person authorized to provide service
under section 653 of the Communications Act of 1934 (47 U.S.C.
573).
``(9) Other wireless carrier.--The term `other wireless
carrier' means any person (other than a telecommunications
carrier, commercial mobile service carrier, cable operator,
open video system operator, or satellite carrier) providing
current generation broadband services or next generation
broadband service to subscribers through the radio transmission
of energy.
``(10) Packet switching.--The term `packet switching' means
controlling or routing the path of any digitized transmission
signal which is assembled into packets or cells.
``(11) Provider.--The term `provider' means, with respect
to any qualified equipment--
``(A) a cable operator,
``(B) a commercial mobile service carrier,
``(C) an open video system operator,
``(D) a satellite carrier,
``(E) a telecommunications carrier,
``(F) any other wireless carrier, providing current
generation broadband services or next generation
broadband services to subscribers through such
qualified equipment; or
``(G) any carrier or operator using any other
technology.
``(12) Provision of services.--A provider shall be treated
as providing services to 1 or more subscribers if--
``(A) such a subscriber has been passed by the
provider's equipment and can be connected to such
equipment for a standard connection fee,
``(B) the provider is physically able to deliver
current generation broadband services or next
generation broadband services, as applicable, to such a
subscriber without making more than an insignificant
investment with respect to such subscriber,
``(C) the provider has made reasonable efforts to
make such subscribers aware of the availability of such
services,
``(D) such services have been purchased by 1 or
more such subscribers, and
``(E) such services are made available to such
subscribers at average prices comparable to those at
which the provider makes available similar services in
any areas in which the provider makes available such
services.
``(13) Qualified equipment.--
``(A) In general.--The term `qualified equipment'
means equipment which provides current generation
broadband services or next generation broadband
services--
``(i) at least a majority of the time
during periods of maximum demand to each
subscriber who is utilizing such services, and
``(ii) in a manner substantially the same
as such services are provided by the provider
to subscribers through equipment with respect
to which no deduction is allowed under
subsection (a)(1).
``(B) Only certain investment taken into account.--
Except as provided in subparagraph (C) or (D),
equipment shall be taken into account under
subparagraph (A) only to the extent it--
``(i) extends from the last point of
switching to the outside of the unit, building,
dwelling, or office owned or leased by a
subscriber in the case of a telecommunications
carrier,
``(ii) extends from the customer side of
the mobile telephone switching office to a
transmission/receive antenna (including such
antenna) owned or leased by a subscriber in the
case of a commercial mobile service carrier,
``(iii) extends from the customer side of
the headend to the outside of the unit,
building, dwelling, or office owned or leased
by a subscriber in the case of a cable operator
or open video system operator, or
``(iv) extends from a transmission/receive
antenna (including such antenna) which
transmits and receives signals to or from
multiple subscribers, to a transmission/receive
antenna (including such antenna) on the outside
of the unit, building, dwelling, or office
owned or leased by a subscriber in the case of
a satellite carrier or other wireless carrier,
unless such other wireless carrier is also a
telecommunications carrier.
``(C) Packet switching equipment.--Packet switching
equipment, regardless of location, shall be taken into
account under subparagraph (A) only if it is deployed
in connection with equipment described in subparagraph
(B) and is uniquely designed to perform the function of
packet switching for current generation broadband
services or next generation broadband services, but
only if such packet switching is the last in a series
of such functions performed in the transmission of a
signal to a subscriber or the first in a series of such
functions performed in the transmission of a signal
from a subscriber.
``(D) Multiplexing and demultiplexing equipment.--
Multiplexing and demultiplexing equipment shall be
taken into account under subparagraph (A) only to the
extent it is deployed in connection with equipment
described in subparagraph (B) and is uniquely designed
to perform the function of multiplexing and
demultiplexing packets or cells of data and making
associated application adaptions, but only if such
multiplexing or demultiplexing equipment is located
between packet switching equipment described in
subparagraph (C) and the subscriber's premises.
``(14) Qualified subscriber.--The term `qualified
subscriber' means--
``(A) with respect to the provision of current
generation broadband services--
``(i) any nonresidential subscriber
maintaining a permanent place of business in a
rural area, or
``(ii) any residential subscriber residing
in a dwelling located in a rural area which is
not a saturated market, and
``(B) with respect to the provision of next
generation broadband services--
``(i) any nonresidential subscriber
maintaining a permanent place of business in a
rural area, or
``(ii) any residential subscriber.
``(15) Residential subscriber.--The term `residential
subscriber' means any individual who purchases broadband
services which are delivered to such individual's dwelling.
``(16) Rural area.--The term `rural area' means any census
tract which--
``(A) is not within 5 miles of any incorporated or
census designated place containing more than 25,000
people, and
``(B) is not within a county or county equivalent
which has an overall population density of more than
500 people per square mile of land.
``(17) Rural subscriber.--The term `rural subscriber' means
any residential subscriber residing in a dwelling located in a
rural area or nonresidential subscriber maintaining a permanent
place of business located in a rural area.
``(18) Satellite carrier.--The term `satellite carrier'
means any person using the facilities of a satellite or
satellite service licensed by the Federal Communications
Commission and operating in the Fixed-Satellite Service under
part 25 of title 47 of the Code of Federal Regulations or the
Direct Broadcast Satellite Service under part 100 of title 47
of such Code to establish and operate a channel of
communications for distribution of signals, and owning or
leasing a capacity or service on a satellite in order to
provide such point-to-multipoint distribution.
``(19) Saturated market.--The term `saturated market' means
any census tract in which, as of the date of the enactment of
this section--
``(A) current generation broadband services have
been provided by a single provider to 85 percent or
more of the total number of potential residential
subscribers residing in dwellings located within such
census tract, and
``(B) such services can be utilized--
``(i) at least a majority of the time
during periods of maximum demand by each such
subscriber who is utilizing such services, and
``(ii) in a manner substantially the same
as such services are provided by the provider
to subscribers through equipment with respect
to which no deduction is allowed under
subsection (a)(1).
``(20) Subscriber.--The term `subscriber' means any person
who purchases current generation broadband services or next
generation broadband services.
``(21) Telecommunications carrier.--The term
`telecommunications carrier' has the meaning given such term by
section 3(44) of the Communications Act of 1934 (47 U.S.C.
153(44)), but--
``(A) includes all members of an affiliated group
of which a telecommunications carrier is a member, and
``(B) does not include a commercial mobile service
carrier.
``(22) Total potential subscriber population.--The term
`total potential subscriber population' means, with respect to
any area and based on the most recent census data, the total
number of potential residential subscribers residing in
dwellings located in such area and potential nonresidential
subscribers maintaining permanent places of business located in
such area.
``(f) Special Rules.--
``(1) Property used outside the united states, etc., not
qualified.--No expenditures shall be taken into account under
subsection (a)(1) with respect to the portion of the cost of
any property referred to in section 50(b) or with respect to
the portion of the cost of any property specified in an
election under section 179.
``(2) Basis reduction.--
``(A) In general.--For purposes of this title, the
basis of any property shall be reduced by the portion
of the cost of such property taken into account under
subsection (a)(1).
``(B) Ordinary income recapture.--For purposes of
section 1245, the amount of the deduction allowable
under subsection (a)(1) with respect to any property
which is of a character subject to the allowance for
depreciation shall be treated as a deduction allowed
for depreciation under section 167.
``(3) Coordination with section 38.--No credit shall be
allowed under section 38 with respect to any amount for which a
deduction is allowed under subsection (a)(1).''.
(b) Special Rule for Mutual or Cooperative Telephone Companies.--
Section 512(b) of the Internal Revenue Code of 1986 (relating to
modifications) is amended by adding at the end the following new
paragraph:
``(21) Special rule for mutual or cooperative telephone
companies.--A mutual or cooperative telephone company which for
the taxable year satisfies the requirements of section
501(c)(12)(A) may elect to reduce its unrelated business
taxable income for such year, if any, by an amount that does
not exceed the qualified broadband expenditures which would be
taken into account under section 191 for such year by such
company if such company was not exempt from taxation. Any
amount which is allowed as a deduction under this paragraph
shall not be allowed as a deduction under section 191 and the
basis of any property to which this paragraph applies shall be
reduced under section 1016(a)(32).''.
(c) Conforming Amendments.--
(1) Section 263(a)(1) of the Internal Revenue Code of 1986
(relating to capital expenditures) is amended by striking
``or'' at the end of subparagraph (H), by striking the period
at the end of subparagraph (I) and inserting ``, or'', and by
adding at the end the following new subparagraph:
``(J) expenditures for which a deduction is allowed
under section 191.''.
(2) Section 1016(a) of such Code is amended by striking
``and'' at the end of paragraph (30), by striking the period at
the end of paragraph (31) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(32) to the extent provided in section 191(f)(2).''.
(3) The table of sections for part VI of subchapter A of
chapter 1 of such Code is amended by inserting after the item
relating to section 190 the following new item:
``Sec. 191. Broadband expenditures for rural communities.''.
(d) Designation of Census Tracts.--
(1) In general.--The Secretary of the Treasury shall, not
later than 90 days after the date of the enactment of this Act,
designate and publish those census tracts meeting the criteria
described in paragraphs (16) and (22) of section 191(e) of the
Internal Revenue Code of 1986 (as added by this section). In
making such designations, the Secretary of the Treasury shall
consult with such other departments and agencies as the
Secretary determines appropriate.
(2) Saturated market.--
(A) In general.--For purposes of designating and
publishing those census tracts meeting the criteria
described in subsection (e)(19) of such section 191--
(i) the Secretary of the Treasury shall
prescribe not later than 30 days after the date
of the enactment of this Act the form upon
which any provider which takes the position
that it meets such criteria with respect to any
census tract shall submit a list of such census
tracts (and any other information required by
the Secretary) not later than 60 days after the
date of the publication of such form, and
(ii) the Secretary of the Treasury shall
publish an aggregate list of such census tracts
and the applicable providers not later than 30
days after the last date such submissions are
allowed under clause (i).
(B) No subsequent lists required.--The Secretary of
the Treasury shall not be required to publish any list
of census tracts meeting such criteria subsequent to
the list described in subparagraph (A)(ii).
(e) Other Regulatory Matters.--
(1) Prohibition.--No Federal or State agency or
instrumentality shall adopt regulations or ratemaking
procedures that would have the effect of eliminating or
reducing any deduction or portion thereof allowed under section
191 of the Internal Revenue Code of 1986 (as added by this
section) or otherwise subverting the purpose of this section.
(2) Treasury regulatory authority.--It is the intent of
Congress in providing the election to deduct qualified
broadband expenditures under section 191 of the Internal
Revenue Code of 1986 (as added by this section) to provide
incentives for the purchase, installation, and connection of
equipment and facilities offering expanded broadband access to
the Internet for users in certain rural areas of the United
States, as well as to residential users nationwide, in a manner
that maintains competitive neutrality among the various classes
of providers of broadband services. Accordingly, the Secretary
of the Treasury shall prescribe such regulations as may be
necessary or appropriate to carry out the purposes of section
191 of such Code, including--
(A) regulations to determine how and when a
taxpayer that incurs qualified broadband expenditures
satisfies the requirements of section 191 of such Code
to provide broadband services, and
(B) regulations describing the information,
records, and data taxpayers are required to provide the
Secretary to substantiate compliance with the
requirements of section 191 of such Code.
(f) No Implication Regarding the Need for Next Generation Incentive
in Urban Areas.--Nothing in this section shall be construed to imply
that an incentive for next generation broadband is not needed in urban
areas.
(g) Effective Date.--The amendments made by this section shall
apply to expenditures incurred after the date of the enactment of this
Act and before the date which is 12 months after the date of the
enactment of this Act.
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