Telcos look to benefit from broadband funding

Cable and phone companies are pushing for different broadband high-speed standards as Congress considers funding a national broadband infrastructure.

Stephanie Condon Staff writer, CBSNews.com
Stephanie Condon is a political reporter for CBSNews.com.
Stephanie Condon
2 min read

As Congress and the next administration consider potential investments in a national broadband infrastructure, cable companies and phone companies are at odds over what should be considered high-speed broadband and how the investment should be made, The Wall Street Journal reported Tuesday.

Members of Congress are drawing up plans for broadband investment that may include corporate tax credits to build new wireless or landline infrastructure in regions with little or no service, the Journal reports. Cable companies would like to see the Federal Communications Commission define broadband download speed at 5 megabits per second, according to the newspaper, so that they would receive tax credits for increasing their infrastructure in regions of the country where that service of speed isn't yet available. The companies are also pushing for incentives to build out next-generation services, at 40 Mbps to 50 Mbps, in areas with only one broadband provider.

Meanwhile, the Journal reports, the Independent Telephone and Telecommunications Alliance, which represents midsize phone companies, is advocating for broadband download speed to be defined within a range of 1.5 Mbps to 3 Mbps. The slower standard would benefit phone companies with services slower than cable modems.

Certain wireless providers also stand to gain from a redefining of broadband. Clearwire in particular could benefit if wireless broadband download speed is designated as above 2 Mbps, since its WiMax network will qualify as broadband. Other wireless carriers have not planned major upgrades to their networks for before 2010, the Journal reports.

Along with tax credits, lawmakers are also considering government-backed grants for companies or local governments to build out broadband networks, according to the Journal.

The Telecommunications Industry Association, which represents equipment makers, is pushing for a $25 billion grant program for Internet service providers, the paper reports. Telecommunications companies would be unlikely to support proposals in which the money would instead go to state or local authorities, which would build broadband networks and open them up to competing service providers.

Some telecommunications firms earlier this month signaled their intent to be involved in shaping a national broadband strategy when they joined with public interest groups and other organizations to draw up goals for such a plan.