[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 88 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 88
To amend the Internal Revenue Code of 1986 to provide an incentive to
ensure that all Americans gain timely and equitable access to the
Internet over current and future generations of broadband capability.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 22, 2001
Mr. Rockefeller (for himself, Ms. Snowe, Mr. Kerry, Mr. Hatch, Mr.
Baucus, Mr. Burns, Mr. Hollings, Mr. Bayh, Mrs. Boxer, Mr. Brownback,
Mr. Cleland, Mrs. Clinton, Mr. Craig, Mr. Daschle, Mr. DeWine, Mr.
Dodd, Mr. Edwards, Mr. Enzi, Mr. Johnson, Mr. Kennedy, Ms. Landrieu,
Mrs. Lincoln, Mr. Miller, Mrs. Murray, Mr. Roberts, Mr. Schumer, Mr.
Thomas, Mr. Wyden, Mr. Helms, Mr. Leahy, Mr. Conrad, Mr. Reid, and Mr.
Harkin) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide an incentive to
ensure that all Americans gain timely and equitable access to the
Internet over current and future generations of broadband capability.
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 Internet Access Act of
2001''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds the following:
(1) The Internet has been the single greatest contributor
to the unprecedented economic expansion experienced by the
United States over the last 8 years.
(2) Increasing the speed that Americans can access the
Internet is necessary to ensure the continued expansion.
(3) Today, most residential Internet users, especially
those located in low income and rural areas, are extremely
limited in the type of information they can send and receive
over the Internet because their means of access is limited to
``narrowband'' communications media, typically conventional
phone lines at a maximum speed of 56,000 bits per second.
(4) Similarly, small businesses in low income and rural
areas are also deprived of full information access because of
their dependence on narrowband facilities.
(5) By contrast, many residential users located in higher
income urban and suburban areas and urban business users can
access the Internet from a variety of carriers at current
generation broadband speeds in excess of 1,500,000 bits per
second, giving them a choice among carriers and high-speed
access to a wide array of audio and data applications.
(6) The result is a growing disparity in the speed of
access to the Internet and the opportunities it creates between
subscribers located in low income and rural areas and
subscribers located in higher income urban and suburban areas.
(7) At the same time, experts project that, under current
financial and regulatory conditions, the facilities needed to
transmit next generation broadband services over the Internet
to residential users at speeds in excess of 10,000,000 bits per
second will not be as ubiquitously available as is telephone
service until sometime between the years 2030 and 2040.
(8) Experts also believe that, under current financial and
regulatory conditions, the disparity in access will be
exacerbated with the deployment of next generation broadband
capability.
(9) The disparity in current broadband access to the
Internet, the slow pace of deployment of next generation
broadband capability, and the projected disparity in access to
such capability will likely prove detrimental to economic
expansion.
(10) It is, therefore, appropriate for Congress to take
action to narrow the current and future disparity in the level
of broadband access to the Internet, and to accelerate
deployment of next generation broadband capability.
(b) Purpose.--The purpose of this Act is to accelerate deployment
of current generation broadband access to the Internet for users
located in certain low income and rural areas and to accelerate
deployment of next generation broadband access for all Americans.
SEC. 3. BROADBAND CREDIT.
(a) In General.--Subpart E of part IV of chapter 1 of the Internal
Revenue Code of 1986 (relating to rules for computing investment
credit) is amended by inserting after section 48 the following new
section:
``SEC. 48A. BROADBAND CREDIT.
``(a) General Rule.--For purposes of section 46, the broadband
credit for any taxable year is the sum of--
``(1) the current generation broadband credit, plus
``(2) the next generation broadband credit.
``(b) Current Generation Broadband Credit; Next Generation
Broadband Credit.--For purposes of this section--
``(1) Current generation broadband credit.--The current
generation broadband credit for any taxable year is equal to 10
percent of the qualified expenditures incurred with respect to
qualified equipment delivering current generation broadband
services to rural subscribers or underserved subscribers and
taken into account with respect to such taxable year.
``(2) Next generation broadband credit.--The next
generation broadband credit for any taxable year is equal to 20
percent of the qualified expenditures incurred with respect to
qualified equipment delivering next generation broadband
services to all rural subscribers, all underserved subscribers,
or any other residential subscribers and taken into account
with respect to such taxable year.
``(c) When Expenditures Taken Into Account.--For purposes of this
section--
``(1) In general.--Qualified 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
delivered through such equipment to rural subscribers
or underserved subscribers, or
``(B) next generation broadband services are
delivered through such equipment to rural subscribers,
underserved subscribers, or any other residential
subscribers.
``(2) Delivery of services.--For purposes of paragraph (1),
the delivery of current generation broadband services or next
generation broadband services through qualified equipment
occurs when such class of service is purchased by and provided
to at least 10 percent of the subscribers described in
subsection (b) which such equipment is capable of serving
through the legal or contractual area access rights or
obligations of the provider.
``(d) Special Allocation Rules.--
``(1) Current generation broadband services.--For purposes
of determining the current generation broadband credit under
subsection (a)(1) with respect to qualified equipment through
which current generation broadband services are delivered, if
the qualified equipment is capable of serving both the
subscribers described under subsection (b)(1) and other
subscribers, the qualified expenditures shall be multiplied by
a fraction--
``(A) the numerator of which is the sum of the
total potential subscriber populations within the rural
areas and the underserved 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 next generation broadband credit under
subsection (a)(2) with respect to qualified equipment through
which next generation broadband services are delivered, if the
qualified equipment is capable of serving both the subscribers
described under subsection (b)(2) and other subscribers, the
qualified expenditures shall be multiplied by a fraction--
``(A) the numerator of which is the sum of--
``(i) the total potential subscriber
populations within the rural areas and
underserved areas, plus
``(ii) the total potential subscriber
population of 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 1,500,000 bits per second to
the subscriber and at least 200,000 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 a 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 a 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, or
``(D) a satellite carrier, telecommunications
carrier, or other wireless carrier,
providing current generation broadband services or next
generation broadband services to subscribers through such
qualified equipment.
``(12) Qualified equipment.--
``(A) In general.--The term `qualified equipment'
means equipment capable of providing current generation
broadband services or next generation broadband
services at any time to each subscriber who is
utilizing such services.
``(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.
``(13) Qualified expenditure.--
``(A) In general.--The term `qualified expenditure'
means any amount--
``(i) chargeable to capital account with
respect to the purchase and installation of
qualified equipment (including any upgrades
thereto) for which depreciation is allowable
under section 168, and
``(ii) incurred after December 31, 2001,
and before January 1, 2006.
``(B) Certain satellite expenditures excluded.--
Such term shall not include any expenditure with
respect to the launching of any satellite equipment.
``(14) Residential subscriber.--The term `residential
subscriber' means an individual who purchases broadband
services which are delivered to such individual's dwelling.
``(15) Rural area.--The term `rural area' means any census
tract which--
``(A) is not within 10 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.
``(16) Rural subscriber.--The term `rural subscriber' means
a 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.
``(17) 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 point-to-multipoint distribution of signals,
and owning or leasing a capacity or service on a satellite in
order to provide such point-to-multipoint distribution.
``(18) Subscriber.--The term `subscriber' means a person
who purchases current generation broadband services or next
generation broadband services.
``(19) 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.
``(20) 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.
``(21) Underserved area.--The term `underserved area' means
any census tract which is located in--
``(A) an empowerment zone or enterprise community
designated under section 1391,
``(B) the District of Columbia Enterprise Zone
established under section 1400,
``(C) a renewal community designated under section
1400E, or
``(D) a low-income community designated under
section 45D.
``(22) Underserved subscriber.--The term `underserved
subscriber' means a residential subscriber residing in a
dwelling located in an underserved area or nonresidential
subscriber maintaining a permanent place of business located in
an underserved area.
``(f) Designation of Census Tracts.--The Secretary shall, not later
than 90 days after the date of the enactment of this section, designate
and publish those census tracts meeting the criteria described in
paragraphs (15) and (21) of subsection (e).''.
(b) Credit To Be Part of Investment Credit.--Section 46 of the
Internal Revenue Code of 1986 (relating to the amount of investment
credit) is amended by striking ``and'' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(4) the broadband credit.''
(c) Special Rule for Mutual or Cooperative Telephone Companies.--
Section 501(c)(12)(B) of the Internal Revenue Code of 1986 (relating to
list of exempt organizations) is amended by striking ``or'' at the end
of clause (iii), by striking the period at the end of clause (iv) and
inserting ``, or'', and by adding at the end the following new clause:
``(v) from sources not described in
subparagraph (A), but only to the extent such
income does not in any year exceed an amount
equal to the credit for qualified expenditures
which would be determined under section 48A for
such year if the mutual or cooperative
telephone company was not exempt from
taxation.''
(d) Conforming Amendment.--The table of sections for subpart E of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 48 the
following new item:
``Sec. 48A. Broadband credit.''
(e) Regulatory Matters.--
(1) Prohibition.--No Federal or State agency or
instrumentality shall adopt regulations or ratemaking
procedures that would have the effect of confiscating any
credit or portion thereof allowed under section 48A 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 broadband credit under section 48A 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 low
income and 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 48A of such
Code, including--
(A) regulations to determine how and when a
taxpayer that incurs qualified expenditures satisfies
the requirements of section 48A 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 48A of such Code.
Until the Secretary prescribes such regulations, taxpayers may
base such determinations on any reasonable method that is
consistent with the purposes of section 48A of such Code.
(f) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to expenditures
incurred after December 31, 2001.
(2) Special rule.--The amendments made by subsection (c)
shall apply to amounts received after December 31, 2001.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S345-346)
Read twice and referred to the Committee on Finance.
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