[Congressional Record Volume 152, Number 106 (Thursday, August 3, 2006)]
[Senate]
[Pages S8833-S8839]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN:
  s. 3820. A bill to expand broadband access for rural Americans; to 
the Committee on Commerce, Science, and Transportation.
  Mr. DURBIN. Mr. President, I rise to introduce a bill entitled 
Broadband for Rural America Act of 2006.
  There is no question that broadband is an essential component of our 
lives, both at work and at home. Broadband access is becoming a vital 
service, much like water, sewer, gas, and electricity are essential 
resources for our daily living. Our homes and businesses need 
affordable and easy access to an always-on, high speed and high 
capacity Internet connection, much like our homes and businesses need 
the traditional utility services.
  Additionally, people who work outside the confines of an office 
building need broadband access on the go. Often, it is not enough to 
have only a cell phone to remain in touch with your boss, coworker, 
client, or supplier. In today's global economy, we need easy methods to 
transfer a vast quantity of data, fast and reliably, even if we are not 
near a landline phone, fax, or computer terminal.
  Yet for so many Americans today, broadband access is still a foreign 
concept. The digital divide remains a reality. Rural broadband 
deployment

[[Page S8834]]

continues to lag behind urban deployment, and the differential 
continues to grow, even as broadband usage has grown significantly in 
our Nation.
  When I travel to small or rural towns in downstate Illinois and 
elsewhere, I meet people who tell me that they cannot wait to have 
broadband, but that there is no service available where they live. I am 
certain that all of my colleagues in the Senate can identify with 
situations like this, where they have met constituents who are eager to 
jump onto the Information Superhighway, yet there is no on-ramp.
  According to a 2004 report issued by the U.S. Department of Commerce, 
only about 25 percent of rural households that use the Internet have 
broadband access, compared to over 40 percent of the same households in 
urban areas. Similarly, the U.S. Department of Agriculture's 2005 
report found that farm households have home access to broadband at 
almost half the level of all U.S. households nationwide.
  The Pew Internet and American Life Project found similar results. In 
its 2006 report, Pew found that only 18 percent of rural adults 
reported a home broadband connection in the year 2005, compared to 31 
percent of urban adults.
  All these different studies issued by various authorities point to a 
consistent conclusion: Americans living in urban areas are almost twice 
as likely to have home broadband access as do their rural counterparts.
  Contrary to popular belief, however, rural households use computers 
and information technology in ways that are very similar to their urban 
counterparts. Thus, it appears that the main obstacle to improving 
rural broadband adoption is not differences in the users themselves, 
but in the availability and price of broadband service.
  It is clear that citizens in small towns and rural areas simply do 
not have the same options that people in cities and urban areas do. 
And, in some of the rural areas where broadband is available, these 
customers often pay more for inferior quality than customers in the 
more populated areas.
  As our rural residents are falling behind city dwellers, so too, is 
our Nation falling behind the rest of the developed world.
  The Organization for Economic Cooperation and Development found that, 
in 2004, America ranked 12th among developed nations in broadband 
access per 100 inhabitants. However, the same study had found that in 
2001, we ranked 4th in the developed world. So, this means that in just 
3 short years, we lost our competitive edge to 8 countries.
  Broadband is critical to community and economic development, as it 
encourages investment, creates jobs, improves productivity, fosters 
innovation, and increases consumer benefits in every corner of our 
Nation.
  A 2003 study by Criterion Economics found that adoption of current 
generation broadband would increase the gross domestic product by 
$179.7 billion, while sustaining an additional 61,000 jobs per year 
over the next 19 years. The study also projected 1.2 million jobs could 
be created if next generation broadband technology were rapidly 
deployed.
  In early 2004, President Bush called for universal and affordable 
access to broadband by the year 2007, because it will enhance our 
Nation's economic competitiveness and help improve education and health 
care for all Americans. Kevin Martin, the chairman of the Federal 
Communications Commission, has said he is committed to expanding the 
number of broadband users in our country so that we can improve our 
rank in the world.
  I agree with both President Bush and Chairman Martin. The 
administration, the FCC, Congress, and the States can all contribute to 
closing the digital divide, ensuring that rural Americans are not left 
behind in the 21st century's digital economy.
  We need to work together to address this critical shortfall in our 
Nation's infrastructure. We need a seamless national network of 
broadband providers that will serve everyone in America.
  Whether it is through telephone wire, cable, fiber, satellite, 
wireless, powerline, or any other medium, we need every existing and 
future broadband service provider to step up to the national challenge.
  That is why I am introducing a bill that will encourage rapid 
deployment of high quality and affordable high speed broadband service, 
especially in the rural areas that desperately need this technology.
  The Broadband for Rural America Act of 2006 includes five major 
provisions. Each provision is designed to eliminate obstacles that 
hinder broadband deployment in rural America today.
  First, my bill creates a new Federal program specifically targeted to 
assist people who are doing the necessary work at the earliest stages 
to bring broadband to their communities.
  These are future customers who are weary of waiting for 
telecommunications and cable companies to eventually reach their 
corners of the State. These are individuals, businesses, and co-ops who 
want to create a demand pool to entice new or existing carriers to 
quickly expand broadband service to areas where they work and live.
  We have several groups like this in my home State of Illinois. They 
cannot wait any longer, so they have taken the initiative to work for 
access to affordable high quality broadband service.
  Many of these groups and individuals work in collaboration with like-
minded community leaders, businesspeople, engineers, and other experts 
to learn all they can about their region. They are the local experts on 
the unique geographic, economic, and lifestyle needs of their market. 
They can conduct the mapping and surveying work, to find out where 
there are services and gaps in their neighborhoods, and what technology 
is best suited to serve their region.
  And, if they discover that no existing provider wants to expand 
service to where they are, based on the company's internal cost-benefit 
analysis, these groups are willing to start a communications service of 
their own, using technology they can afford, to provide broadband for 
and by themselves. These good people do not want to be left out of the 
new economy. They need our help.
  Yet, currently, there is no readily accessible source of funding from 
the Federal Government for these groups that are undertaking the 
critical early stage groundwork. If they were already communications 
service providers, they could look for funding through other programs, 
including the USDA's Rural Utilities Service Program, the universal 
service fund, or the Small Business Administration. They could also go 
to the financial markets to seek venture capital and operating funds 
from established private sector investors.
  But as startup groups trying hard to serve their local or rural 
community's needs, they have few places to turn to for financial 
assistance.
  My bill creates a new Office of Broadband Access within the FCC that 
would administer a trust fund from which Federal grants can be issued 
to these startup groups. Under my bill, eligible entities include 
nonprofits, academic institutions, local governments, and commercial 
companies that will work to identify broadband access needs in unserved 
areas of the country.
  The types of projects to be funded through this new program will 
include feasibility studies, mapping, economic analysis, and other 
activities undertaken to determine the reasons for the current lack of 
service and the scale, scope, and type of broadband services most 
suitable for the particular unserved area.
  To further assist with these startup projects, my bill requires the 
FCC to collect more useful information from current broadband service 
providers to ascertain where and how broadband service is available, 
and to report to Congress on the areas that are unserved.
  This reporting requirement is a bipartisan idea that Senator Bill 
Nelson and Senator Jim DeMint recently presented before the Senate 
Commerce Committee. I am happy to work with them to further encourage 
the FCC to collect more useful data on the state of broadband 
deployment.
  Finally, the revenues to fund this trust fund will be derived from 
direct appropriations of $10 million per year for 5 years, plus 1 
percent of proceeds from all auction sales of spectrum conducted by the 
FCC, which are to be set aside for this unique purpose. I believe this 
should generate enough revenues to sustain this trust fund for the next

[[Page S8835]]

5 years, which is the critical time for Federal assistance.
  When Congress created the Rural Utilities Service Broadband Loan and 
Loan Guarantee Program in the 2002 farm bill, we charged the U.S. 
Department of Agriculture with providing much needed funds to bring 
broadband to rural America. The bill authorized $100 million for fiscal 
years 2002 to 2007 to provide below market-rate loans and loan 
guarantees for the construction and improvement of facilities and 
equipment to provide broadband service.
  While this loan program has had some successes over the past 4 years, 
it has also faced serious internal and external criticism.
  For example, in September 2005, USDA's inspector general issued an 
internal audit report pointing out major problems with the program. 
Among other concerns, the report alleges that, in decisions that were 
inconsistent with provisions of authorizing statute, USDA has funded 
entities in suburban--not rural--areas, and in places that are already 
receiving broadband service.
  The internal report also accuses the agency of mismanaging the 
program, leading to irregularities and even fraud in the decisionmaking 
and approval processes for applications.
  To add more controversy to this program, in May of this year, USDA 
was sued by the cable industry for allegedly failing to follow the 
statutory mandates that created the broadband loan program.
  Striking a tone similar to the inspector general's internal audit 
report, the lawsuit alleges among other issues that USDA has diverted 
Federal funds to suburban areas and has failed to ensure that unserved 
communities receive first priority.
  I support the USDA's rural broadband loan program, and I want to see 
the program grow and continue to fund worthy projects. But I also 
believe that these recent internal and external developments merit 
serious consideration. So, in the spirit of working with the USDA to 
reform the problematic areas, my bill reforms and extends the life of 
the loan program for another 5 years, to expire in 2012, not 2007.
  The bill goes to the heart of the concerns raised by the critics of 
the program. It amends the definition of an eligible rural community to 
exclude any area located within 10 miles of any city with a population 
of over 25,000. This should prevent the program from funding urban or 
suburban areas that may be technically considered rural under some 
definitions, but are in reality, located adjacent to areas that already 
receive broadband service.
  Additionally, my bill prevents any rural area from being funded where 
a majority of its residential customers already have access to 
broadband service offered at a price per megabit of speed comparable to 
the nearest urban area. Under this definition, any area where rural 
residents are already enjoying affordable high speed broadband service 
should not be allowed to receive additional Federal funds.
  These funds should be saved for the truly needy communities.
  My bill also provides language to authorize in statute a rural 
broadband grant program to be administered by the USDA, together with 
its rural broadband loan and loan guarantee program.
  While the USDA has created its own grant programs to fund certain 
broadband providers, a formal grant program was never authorized by 
Congress. By authorizing it, Congress will have more oversight and 
impose accountability, while keeping the grant program funded at an 
operational level for many years to come.
  Finally, although USDA's inspector general has recommended several 
reform measures, I believe we should force the agency to implement 
these changes in order to improve the loan and grant programs. 
Therefore, my bill requires the USDA to undertake a comprehensive and 
transparent rulemaking process in response to the recent internal 
audit.
  The FCC has been looking to make more spectrum available for 
innovative unlicensed wireless uses, including wireless broadband. This 
new ``unlicensed'' spectrum holds tremendous potential for allowing 
wireless broadband to be deployed in rural areas. This would be 
especially helpful in large rural geographic regions where it would be 
cost prohibitive to build out a broadband infrastructure with wires, 
cable, or fiber.
  Some of this spectrum would come from space made newly available when 
traditional analog over-the-air TV broadcasters transition to digital 
transmission by 2009. Other spectrum may be found in narrow gaps 
between currently existing licensed users that could be utilized by 
smaller and localized products, such as garage openers, cordless 
phones, wireless baby monitors, and of course, broadband.
  While I support making more spectrum available to new users, I 
believe we need to do so with clear safeguards in place so that new 
wireless users will not cause undue interference problems with existing 
broadcasters, public safety officials, and others that use wireless 
products such as microphones.
  My bill requires the FCC to complete a rulemaking process to make new 
spectrum available for wireless broadband services in rural areas as 
soon as practicable. The bill specifically requires the FCC to ensure 
that new unlicensed wireless users provide engineering testing results 
to prevent harmful interference problems.
  The FCC also has been planning an auction sale of spectrum in the 700 
MHz band, which is ideal for wireless broadband use. I support this 
auction, and I encourage the FCC to conduct it as soon as possible, so 
that new service providers can enter the wireless broadband market to 
fill in the gaps in service that wireline providers cannot or will not 
meet.
  However, we have learned from previous FCC auctions that the true 
value of spectrum depends on who uses it and for what purposes. We also 
have learned that different carriers will bid in different auctions, 
depending on the size of the blocks of airwaves available for purchase. 
Large national wireless carriers will choose to bid on large geographic 
markets, while smaller or local carriers will bid on smaller market 
sizes.
  For the 700 MHz band, I agree with a bipartisan idea that Senator 
Olympia Snowe and Senator Byron Dorgan proposed in the Senate Commerce 
Committee. In our view, it makes the most sense to configure the plan 
for this band to designate up to 12 MHz of paired recovered analog 
spectrum to be auctioned for smaller geographic licenses.
  This will maximize the participation of small, regional, and rural 
service providers, because these are the most likely entities to 
provide wireless broadband service in rural areas.
  My bill therefore requires the FCC to evaluate its auction plans and 
to divide some of the frequency allocations into smaller area licenses 
so that regional and rural wireless companies can compete in the 
bidding process.
  I look forward to working with Senators Snowe and Dorgan to ensure 
that the FCC maximizes the value of these public airwaves for the 
benefit of all Americans, especially those living in rural areas.
  As with many States, my State of Illinois has struggled over the past 
few years with ways to bring universal and affordable broadband to 
every corner of our State. Many leaders in our State and local 
governments have studied various proposals, and have sought the 
guidance of experts in the private sector.
  Additionally, telecommunications and cable companies that provide the 
vast majority of broadband service in the nation today are generally 
regulated at the state and local levels. Therefore, in our effort to 
develop a national broadband policy, I think it makes sense for 
Congress to learn from the varied experiences gained in many states 
that have tried innovative solutions to encourage or mandate broadband 
services in their regions.
  My bill establishes a task force consisting of experts in Federal, 
State, and local governments, trade associations, public interest 
organizations, academic institutions, and other relevant areas, to 
study best practices for rapid deployment of broadband services in 
States, particularly those with large unserved rural areas.
  The bill requires the task force, within 6 months, to provide to 
Congress and to each governor a report detailing a comprehensive list 
of specific measures adopted by State or local governments that have 
helped provide incentives for

[[Page S8836]]

communications carriers to deploy broadband services in areas that 
lacked such services.
  For too long, we have been talking about the need to bring universal 
and affordable broadband to every corner of our Nation. Yet progress 
has been too slow. It is time to reengage our national, state, and 
local policy leaders to focus our attention, and work with the private 
sector toward achieving this goal.
  I urge my colleagues to join me in supporting Broadband for Rural 
America Act of 2006.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3820

       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 ``Broadband for Rural America 
     Act of 2006''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) High speed broadband communications is no longer a 
     luxury. It has become a vital service for all Americans, much 
     like water, sewer, gas, and electricity are essential 
     resources for our daily lives.
       (2) Broadband infrastructure is critical to community and 
     economic development, by encouraging investment, creating 
     jobs, improving productivity, fostering innovation, and 
     increasing consumer benefits.
       (3) Despite the ongoing efforts by traditional 
     communications carriers to expand broadband services, the 
     rate of deployment in America is still far from ideal. Recent 
     reports indicate that America continues to trail other 
     leading industrialized countries, per capita, in the 
     availability and use of broadband communications.
       (4) As our Nation falls behind the developed world in 
     broadband access, so, too, are rural residents falling behind 
     city and urban residents. In small towns and rural America, 
     broadband service remains largely non existent. In places 
     where it is available, rural broadband customers often pay 
     more for inferior quality than customers in cities and urban 
     areas.
       (5) A national policy is needed to accelerate the 
     deployment of broadband services so that, no matter where 
     they live, every American can have access to affordable and 
     high-quality broadband service as soon as possible.

     SEC. 3. PURPOSE.

       The purposes of this Act are to encourage the rapid 
     deployment of high quality and affordable high speed 
     broadband service to every corner of our Nation by--
       (1) establishing a new source of funding for entities that 
     work to identify unserved regions of the Nation and to 
     address the lack of broadband service in those areas;
       (2) reforming the rural broadband loan program to ensure 
     that Federal funds are provided only to qualified entities 
     that will serve truly rural and unserved regions of the 
     Nation, while providing statutory authority and Federal 
     funding for the rural broadband grant program;
       (3) making more unlicensed spectrum available for 
     innovative wireless broadband uses that will not cause 
     harmful interference and degradation of service to other 
     wireless services;
       (4) encouraging rural, regional, and smaller wireless 
     carriers to enter the wireless broadband market by 
     reconfiguring the size of spectrum auctions into smaller 
     market sizes; and
       (5) studying policies and programs adopted by State and 
     local governments that have worked to provide incentives for 
     rapid broadband deployment.

     SEC. 4. BROADBAND ACCESS TRUST FUND AND OFFICE OF BROADBAND 
                   ACCESS.

       (a) Establishment.--
       (1) Fund established.--There is established in the Treasury 
     of the United States the Broadband Access Trust Fund.
       (2) Office established.--
       (A) In general.--There is established within the Federal 
     Communications Commission the Office of Broadband Access.
       (B) Duties.--The Office of Broadband Access shall 
     coordinate the use of all resources within the Fund, as such 
     resources relate to the expansion of broadband technology 
     into rural or unserved areas.
       (3) Deposits.--The Fund shall consist of--
       (A) the amounts appropriated pursuant to subsection (f); 
     and
       (B) 1 percent of the proceeds of any auction for any bands 
     of frequencies conducted pursuant to section 309(j) of the 
     Communications Act of 1934 (47 U.S.C. 309(j)).
       (4) Fund availability.--
       (A) Appropriation.--There are appropriated from the Fund 
     such sums as are authorized by the board to be disbursed for 
     grants under this section.
       (B) Reversion of unused funds.--Any grant proceeds that 
     remain unexpended at the end of the grant period, as 
     determined under subsection (c)(3), shall revert to and be 
     deposited in the Fund.
       (b) Board of Directors.--
       (1) Establishment.--The Fund shall be administered by the 
     Office of Broadband Access, in consultation with a board of 
     directors comprised of 5 members, appointed by the Chairman 
     of the Federal Communications Commission, with experience in 
     1 or more of the following fields:
       (A) Grant and investment management.
       (B) Advanced communications technology.
       (C) Rural communications services.
       (D) Community-based economic development.
       (2) Functions.--The board shall--
       (A) establish reasonable and prudent criteria for the 
     selection of grant recipients under this section;
       (B) determine the amount of grants awarded to such 
     recipients; and
       (C) review the use of grant funds by such recipients.
       (3) Compensation prohibited; expenses provided.--The 
     members of the board shall serve without compensation, but 
     may, from appropriated funds available for the administrative 
     expenses of the Federal Communications Commission, receive 
     travel expenses, including per diem in lieu of subsistence, 
     in accordance with applicable provisions under subchapter I 
     of chapter 57 of title 5, United States Code.
       (c) Purpose and Activities of the Fund.--
       (1) Grant purposes.--In order to achieve the objectives and 
     carry out the purposes of this section, the Office of 
     Broadband Access is authorized to make grants, from amounts 
     deposited pursuant to subsection (a)(2) and from the interest 
     or other income derived from the Fund--
       (A) to study the lack of affordable broadband 
     communications services in particular unserved regions of the 
     nation, particularly in rural areas; and
       (B) to take steps toward providing such services to such 
     regions.
       (2) Grant preference.--In making grants from the Fund, the 
     Office of Broadband Access shall give preference to eligible 
     individuals or entities that are proposing rural or 
     community-based partnerships to encourage economic 
     development in unserved regions of the nation, particularly 
     in rural areas.
       (3) Grant availability.--Grants from the Fund shall be made 
     available on a single or multi-year basis to facilitate long 
     term planning.
       (d) Eligible Entities.--
       (1) In general.--The following organizations and entities 
     are eligible to apply for funds under this section:
       (A) An agency or instrumentality of a State or local unit 
     of government (including an agency or instrumentality of a 
     territory or possession of the United States).
       (B) A nonprofit agency or organization that is exempt from 
     taxes under section 501(c)(3) of the Internal Revenue Code of 
     1986 (26 U.S.C. 501(c)(3)).
       (C) An institution of higher education.
       (D) Any legally organized incorporated organization or 
     other legal entity, including a cooperative, a private 
     corporation, or a limited liability company.
       (2) Preference.--
       (A) Nonlicensed entities.--In determining which legally 
     organized incorporated organizations or other legal entities 
     shall receive grants from the Fund, the Office of Broadband 
     Access shall give preference to those organizations and 
     entities that are not already licensed by the Federal 
     Communications Commission to provide voice, data, video, or 
     other communications or information services.
       (B) Secondary priority for already licensed entities.--The 
     Office of Broadband Access shall only award grants from the 
     Fund to those organizations and entities that are already 
     licensed by the Federal Communications Commission to provide 
     voice, data, video, or other communications or information 
     services only after all applications by nonlicensed 
     organizations described in subparagraph (A) have been 
     considered.
       (e) Permissible Uses of Funds.--Amounts made available by 
     grants from the Fund under this section may be used by 
     eligible entities for conducting feasibility studies, 
     mapping, economic analysis, and other activities done to 
     determine--
       (1) the reasons for the lack of affordable broadband 
     communications services in particular unserved regions of the 
     nation, particularly in rural areas; and
       (2) the scale, scope, and type of broadband services most 
     suitable for each particular unserved area.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Fund $10,000,000 for fiscal year 
     2007 and each of the 5 succeeding fiscal years.
       (g) Reports.--
       (1) By grant recipients.--Each grant recipient shall submit 
     to the Federal Communications Commission and the board a 
     report on the use of the funds provided by the grant.
       (2) By fcc.--
       (A) In general.--The Federal Communications Commission 
     shall annually submit to Congress a report on the operations 
     of the Fund and the grants made by the Fund.
       (B) Required content.--The report required under 
     subparagraph (A) shall include--
       (i) an identification of the grants made, the recipients 
     thereof, and the planned uses of the amounts made available;
       (ii) a financial report on the operations and condition of 
     the Fund; and
       (iii) a description of the results of the use of funds 
     provided by grants under this section, including the status 
     of broadband availability in the regions covered by such 
     grants.

[[Page S8837]]

       (C) Information required.--
       (i) In general.--The Federal Communications Commission 
     shall revise FCC Form 477 reporting requirements not later 
     than 180 days after the date of enactment of this Act to 
     require broadband service providers to report the following 
     information:

       (I) Identification of location where the provider provides 
     broadband service to customers, identified by zip code plus 4 
     digit location (referred to in this subparagraph as ``service 
     area'').
       (II) Percentage of residential households and businesses in 
     each service area that are offered broadband service by the 
     provider, and the percentage of such residential households 
     and businesses that subscribe to each service plan offered.
       (III) The average price per megabit of download speed and 
     upload speed in each service area.
       (IV) Identification by service area of the provider's 
     broadband service's actual average throughput, and contention 
     ratio of the number of users sharing the same line.

       (ii) Exception.--The Federal Communications Commission may 
     exempt a broadband service provider from the requirements of 
     this subparagraph if the Federal Communications Commission 
     determines that a provider's compliance with the reporting 
     requirements is cost prohibitive, as defined by the Federal 
     Communications Commission.
       (D) Report.--The Federal Communications Commission shall 
     provide to Congress on an annual basis a report, using 
     available Census Bureau data, containing the following 
     information for each service area that is not served by any 
     broadband service provider;
       (i) Population.
       (ii) Population density.
       (iii) Average per capita income.
       (h) Regulations.--The Federal Communications Commission may 
     prescribe such regulations as may be necessary and 
     appropriate to carry out this section.
       (i) Definitions.--As used in this section--
       (1) the term ``the Fund'' means the Broadband Access Trust 
     Fund established pursuant to subsection (a); and
       (2) the term ``the board'' means the board of directors 
     established pursuant to subsection (b).

     SEC. 5. USDA BROADBAND PROGRAM REFORMS.

       (a) Reauthorization.--Section 601(k) of the Rural 
     Electrification Act of 1936 (7 U.S.C. 950bb(k)) is amended by 
     striking ``2007'' and inserting ``2012''.
       (b) Clarification of Eligible Rural Community.--Section 
     601(b)(2) of the Rural Electrification Act of 1936 (7 U.S.C. 
     950bb(b)(2)) is amended to read as follows:
       ``(2) Eligible rural community.--The term `eligible rural 
     community' means any area of the United States that is not--
       ``(A) included within the boundaries of any incorporated 
     city, village, borough, or town with a population in excess 
     of 25,000 inhabitants;
       ``(B) located within 10 miles of any such city, village, 
     borough, or town; and
       ``(C) an area where a majority of its residential customers 
     have access to broadband service offered at a price per 
     megabit of download speed and upload speed comparable to the 
     nearest urban area.''.
       (c) Additional Requirements for Eligible Entities.--Section 
     601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb) 
     is amended--
       (1) in subsection (c)--
       (A) in paragraph (1), by striking ``(1) In general.--''; 
     and
       (B) by striking paragraph (2); and
       (2) in subsection (d)(1)--
       (A) in subparagraph (A), by striking ``; and'' and 
     inserting a semicolon;
       (B) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (C) by adding at the end the following:
       ``(C) demonstrate that any loan or loan guarantee obtained 
     under this section will be used only to furnish, improve, or 
     extend broadband service to those eligible rural 
     communities.''.
       (d) Community Connect Grant Program.--Title VI of the Rural 
     Electrification Act of 1936 (7 U.S.C. 950bb et seq.) is 
     amended by adding at the end the following:

     ``SEC. 602. COMMUNITY CONNECT GRANT PROGRAM.

       ``(a) Purposes.--The purposes of this section are--
       ``(1) to provide financial assistance in the form of grants 
     to eligible applicants that will provide, on a community-
     oriented connectivity basis, broadband service that fosters 
     economic growth and delivers enhanced educational, health 
     care, and public safety services; and
       ``(2) to ensure the deployment of broadband service to 
     extremely rural, lower-income communities on a community-
     oriented connectivity basis.
       ``(b) Grants Authorized.--
       ``(1) In general.--The Secretary may award a grant to any 
     eligible applicant to provide broadband services in 
     accordance with the provisions of this section.
       ``(2) Award basis.--The Secretary shall award grants under 
     this section on a competitive basis.
       ``(c) Eligible Applicant.--To be eligible to obtain a grant 
     under this section, an applicant shall--
       ``(1) be--
       ``(A) legally organized as an incorporated organization;
       ``(B) an Indian tribe or tribal organization, as defined in 
     subsections (b) and (c) of section 4 of the Indian Self-
     Determination and Education Assistance Act (25 U.S.C. 450b(b) 
     and (c));
       ``(C) a State or local unit of government;
       ``(D) an institution of higher education; or
       ``(E) any other legal entity, including a cooperative, a 
     private corporation, or a limited liability company organized 
     on a for-profit or not-for-profit basis;
       ``(2) have the legal capacity and authority to--
       ``(A) own and operate the broadband facilities proposed in 
     its application;
       ``(B) enter into contracts; and
       ``(C) otherwise comply with applicable Federal statutes and 
     regulations; and
       ``(3) develop a project that--
       ``(A) serves an eligible rural community;
       ``(B) deploys basic broadband service, free of all charges 
     for at least 2 years, to all critical community facilities 
     located within a proposed service area;
       ``(C) offers basic broadband service to residential and 
     business customers within a proposed service area; and
       ``(D) provides--
       ``(i) a community center with at least 10 computer access 
     points within a proposed service area; and
       ``(ii) broadband service to such centers free of charge for 
     at least 2 years.
       ``(d) Application.--
       ``(1) Submission.--Each applicant seeking a grant under 
     this section shall submit an application containing--
       ``(A) any information or documentation required under 
     section 1739.15 of title 7, Code of Federal Regulations; and
       ``(B) such other information or documentation that the 
     Secretary may require.
       ``(2) Review and scoring of applications.--The Secretary 
     shall review and score any applications received under this 
     section using the same methods, and in the same manner, as 
     described in sections 1739.16 and 1739.17 of title 7, Code of 
     Federal Regulations.
       ``(e) Use of Funds.--A grant awarded to an eligible 
     applicant pursuant to this section may be used to--
       ``(1) construct, acquire, or lease facilities, including 
     spectrum, to deploy broadband service to all participating 
     critical community facilities and all required facilities 
     needed to offer such service to residential and business 
     customers located within a proposed service area;
       ``(2) improve, expand, construct, or acquire a community 
     center that furnishes free access to broadband service, 
     provided that such community center is open and accessible to 
     area residents before, during, and after normal working hours 
     and on Saturday or Sunday;
       ``(3) purchase any end user equipment needed to carry out 
     the project of the applicant described in subsection (c)(3);
       ``(4) pay the operating expenses incurred in providing--
       ``(A) broadband service to critical community facilities 
     for the first 2 years of operation; and
       ``(B) training and instruction on how to use such services; 
     and
       ``(5) purchase any land, building, or building construction 
     needed to carry out the project of the applicant described in 
     subsection (c)(3).
       ``(f) Matching Requirement.--
       ``(1) In general.--Each eligible applicant shall contribute 
     not less than 15 percent of the grant amount requested in any 
     application.
       ``(2) Form.--The matching contribution described in 
     paragraph (1) may be in the following form:
       ``(A) Cash for eligible grant purposes.
       ``(B) In-kind contributions for purposes that could have 
     been financed with grant funds under this section. In-kind 
     contributions shall be new or non-depreciated assets with 
     established monetary values. Manufacturers' or service 
     providers' discounts shall not be considered a matching 
     contribution.
       ``(C) The rental value of space provided within an existing 
     community center, provided that such space is provided free 
     of charge to such applicant, for the first 2 years of 
     operation.
       ``(D) Salary expenses incurred for any individual operating 
     the community center, for the first 2 years of operation.
       ``(E) Expenses incurred in operating a community center, 
     for the first 2 years of operation.
       ``(3) Prior costs.--Costs incurred by an applicant, or by 
     others on behalf of an applicant, for facilities, installed 
     equipment, or other services rendered prior to submission of 
     a completed application shall not be considered an acceptable 
     use of grant funds under subsection (e) or a matching 
     contribution.
       ``(4) Rental values.--Rental values of space provided, as 
     described in paragraph (1)(C), shall be substantiated by 
     rental agreements documenting the cost of space of a similar 
     size in a similar location.
       ``(5) Reasonableness review.--Rental values, salaries, and 
     other expenses incurred in operating a community center shall 
     be subject to review by the Secretary for reasonableness in 
     relation to the scope of the applicant's project described in 
     subsection (c)(3).
       ``(6) Other assistance.--Any financial assistance from any 
     other Federal source shall not be considered a matching 
     contribution under this section unless there is a Federal 
     statutory exception specifically authorizing the Federal 
     financial assistance to be considered as such.

[[Page S8838]]

       ``(g) Other Requirements.--Each applicant shall comply with 
     the reporting, oversight, and auditing requirements described 
     in sections 1739.19 and 1739.20 of title 7, Code of Federal 
     Regulations.
       ``(h) Definitions.--As used in this section:
       ``(1) Basic broadband service.--The term `basic broadband 
     service' means the broadband service level provided by an 
     applicant at the lowest rate or service package level for 
     residential or business customers, as appropriate, provided 
     that such service meets the requirements of this section.
       ``(2) Broadband service.--The term `broadband service' 
     means providing an information-rate equivalent to at least 
     200 kilobits/second in the consumer's connection to the 
     network, both from the provider to the consumer (downstream) 
     and from the consumer to the provider (upstream).
       ``(3) Community center.--The term `community center'--
       ``(A) means a public building, or a section of a public 
     building with at least 10 computer access points, that is 
     used for the purposes of providing free access to or 
     instruction in the use of broadband service, and is of the 
     appropriate size to accommodate this purpose; and
       ``(B) may include schools, libraries, or a city hall.
       ``(4) Computer access point.--The term `computer access 
     point' means a computer terminal with access to basic 
     broadband service.
       ``(5) Critical community facilities.--The term `critical 
     community facilities' means any public school or education 
     center, public library, public medical clinic, public 
     hospital, community college, public university, or any law 
     enforcement, fire, or ambulance station in a proposed service 
     area.
       ``(6) End user equipment.--The term `end user equipment' 
     means computer hardware and software, audio or video 
     equipment, computer network components, telecommunications 
     terminal equipment, inside wiring, interactive video 
     equipment, or other facilities required for the provision and 
     use of broadband service.
       ``(7) Rural area.--The term `rural area' means any area of 
     the United States that is not--
       ``(A) included within the boundaries of any incorporated or 
     unincorporated city, village, borough, or town with a 
     population in excess of 25,000 inhabitants; and
       ``(B) located within 10 miles of any such city, village, 
     borough, or town.
       ``(8) Secretary.--The term `Secretary' means the Secretary 
     of Agriculture.
       ``(9) Service area.--The term `service area' means a single 
     community, and may include the unincorporated areas or 
     locally recognized communities, not recognized in the most 
     recent decennial census performed by the Bureau of the 
     Census, located outside and contiguous to the boundaries of 
     such community, in which the applicant proposes to provide 
     broadband service.
       ``(10) Spectrum.--The term `spectrum' means a defined band 
     of frequencies that will accommodate broadband service.''.

     SEC. 6. USDA RULEMAKING.

       The Secretary of Agriculture shall initiate and complete a 
     rulemaking to--
       (1) consider and adopt, as necessary in the discretion of 
     the Secretary, the recommendations set forth in audit report 
     09601-4-Te, issued in September 2005, entitled ``Rural 
     Utilities Service Broadband Grant and Loan Programs'' by the 
     Inspector General of the United States Department of 
     Agriculture; and
       (2) review and propose recommendations as to how to best 
     coordinate the application process of the broadband loan and 
     loan guarantee program under section 601 of the Rural 
     Electrification Act of 1936 and the Community Connect Grant 
     program under section 602 of such Act, as added by section 2 
     of this Act.

     SEC. 7. UNLICENSED DEVICES FOR RURAL WIRELESS BROADBAND.

       (a) Completion of Order.--Not later than 18 months after 
     date of enactment of this Act, the Federal Communications 
     Commission shall issue a final order in the matter of 
     Unlicensed Operation in TV Broadcast Bands, ET Docket No. 04-
     186.
       (b) Conditions.--In completing the final order described in 
     subsection (a), the Federal Communications Commission shall--
       (1) permit certified unlicensed devices to use, in non-
     exclusive terms, unassigned, non-licensed television 
     broadcast channels between 54 MHz and 698 MHz in rural areas;
       (2) protect incumbent certified low power auxiliary 
     stations from harmful interference by requiring certification 
     of unlicensed devices prior to permitting such devices to 
     access or use unassigned, non-licensed television broadcast 
     channels between 54 MHz and 698 MHz in rural areas, and 
     including in the certification proof of successful completion 
     of laboratory and field testing by an independent laboratory 
     demonstrating that unlicensed devices do not cause harmful 
     interference to incumbent certified low power auxiliary 
     stations;
       (3) protect incumbent certified low power auxiliary 
     stations from harmful interference by prohibiting certified 
     unlicensed devices from operating on any television broadcast 
     channel between 54 MHz and 698 MHz in rural areas already in 
     use by an incumbent certified low power auxiliary station; 
     and
       (4) consider additional ways to protect incumbent certified 
     low power auxiliary stations from harmful interference, such 
     as reserving certain television broadcast channels for 
     exclusive use by incumbent certified low power auxiliary 
     stations.
       (c) Definitions.--As used in this section:
       (1) Certified unlicensed device.--The term ``certified 
     unlicensed device'' means any unlicensed device certified 
     under subsection (b)(2)(D) operating in a fixed location, 
     whose primary purpose is to provide broadband service to 
     rural areas.
       (2) Incumbent certified low power auxiliary station.--The 
     term ``incumbent certified low power auxiliary station'' 
     means any certified low power wireless microphone, personal 
     wireless monitor, or other audio auxiliary equipment 
     operating on television broadcast channels between 54 MHz and 
     698 MHz, used for entertainment, religious, news-gathering, 
     governmental, business, or personal consumer purposes to 
     provide real-time, high-quality audio transmissions over 
     distances of approximately 100 meters.
       (3) Rural area.--The term ``rural area'' means any rural 
     service area or rural statistical area, as defined by the 
     Federal Communications Commission.

     SEC. 8. SPECTRUM AUCTION FOR RURAL WIRELESS BROADBAND.

       Not later than February 1, 2007, the Federal Communications 
     Commission shall initiate a proceeding--
       (1) to reevaluate and reconfigure its band plans for the 
     upper 700 MHz band (currently designated Auction 31) and for 
     the unauctioned portions of the lower 700 MHz band (currently 
     designated as Channel Blocks A, B, and E) so as to designate 
     up to 12 MHz of paired recovered analog spectrum (as defined 
     in section 309(j)(15)(C)(vi) of the Communications Act of 
     1934 (47 U.S.C. 309(j)(15)(C)(vi))); and
       (2) to reconfigure its band plans to include spectrum to be 
     licensed for small geographic license areas, taking into 
     consideration the desire to promote infrastructure build-out 
     and service to rural and insular areas and the competitive 
     benefits, unique characteristics, and special needs of rural, 
     regional, and smaller wireless carriers.

     SEC. 9. PUBLIC-PRIVATE TASK FORCE ON BROADBAND INITIATIVES.

       (a) Establishment.--There is established a task force to be 
     known as the ``Rural Broadband Access Task Force'' (referred 
     to in this section as the ``Task Force'').
       (b) Membership.--
       (1) In general.--The Task Force established under this 
     section shall be composed of 11 members, of whom--
       (A) 3 shall be appointed by the President;
       (B) 2 shall be appointed by the Majority Leader of the 
     Senate;
       (C) 2 shall be appointed by the minority Leader of the 
     Senate;
       (D) 2 shall be appointed by the Speaker of the House of 
     Representatives; and
       (E) 2 shall be appointed by the minority Leader of the 
     House of Representatives.
       (2) Qualifications.--The membership of the Task Force 
     established under this section shall include--
       (A) at least 6 members of whom--
       (i) all shall be recognized experts in the field of 
     communications;
       (ii) 2 shall be employees of the Federal Government;
       (iii) 2 shall be employees of State governments; and
       (iv) 2 shall be employees of local governments;
       (B) at least 1 member who shall be a representative of a 
     consumer or public interest organization;
       (C) at least 1 member who shall be a representative of 
     interested trade associations;
       (D) at least 1 member who shall be a representative of 
     interested academic institutions; and
       (E) at least 2 members all of whom shall be especially 
     qualified to serve on the Task Force by virtue of their 
     education, training, or experience, particularly in the field 
     of rural communications access issues.
       (3) Chairperson.--Each year, the Task Force shall elect a 
     Chairperson from among its members.
       (4) Vice chair.--Each year, the Task Force shall elect a 
     Vice Chair from among its members.
       (c) Duties.--The Task Force shall--
       (1) conduct a comprehensive survey of legislative, 
     regulatory, or administrative policies or programs adopted by 
     States to encourage rapid deployment of broadband services;
       (2) study policies or programs that have been successful in 
     providing incentives for communications carriers to deploy or 
     expand services in areas that lacked such services before the 
     introduction of such incentives; and
       (3) study traditional incentives, such as tax credits or 
     financial subsidies, as well as innovative efforts, including 
     public and private partnership programs and best practices 
     that have worked well in encouraging communications carriers 
     to deploy or expand services in areas that lacked such 
     services, particularly in those States with large unserved 
     rural areas.
       (d) Report.--Not later than 6 months after all the members 
     of the Task Force have been appointed under subsection (b), 
     the Task Force shall submit a report to Congress and to the 
     governor of each State detailing a comprehensive list of 
     policies and programs adopted by States that have succeeded 
     in providing incentives for communications carriers to deploy 
     or expand services in areas that lacked such services before 
     the introduction of such incentives.
       (e) Working Groups.--

[[Page S8839]]

       (1) In general.--The Task Force may establish such working 
     groups as the Task Force determines necessary in order to 
     assist the Task Force in carrying out this subsection.
       (2) Membership.--Any working group established under 
     paragraph (1) may include such members as the Task Force 
     determines necessary, including individuals who were not 
     appointed as a member of the Task Force under subsection (b).
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     this section.
                                 ______