Senate bill: Billion-dollar Verizon tax break still possible

Language in the latest draft of the Senate economic stimulus currently provides Verizon with a crack at a billion dollars (or more) of tax credits if the company spends $6 billion on FiOS over the next two years. However, the language is expected to be modified in a joint conference committee to hammer out differences between the House and Senate bills.

Under the current language in the Senate bill, a credit will be given equal to 20 percent of the cost of constructing a broadband network capable of delivering at least 100 Mbps to any home in the country. While Verizon currently markets its service at speeds up to 50 Mbps, company officials have indicated the underlying hardware on newer builds is capable of supporting speeds of 100 Mbps and higher.

Sen. Jay Rockfeller (D-W.V.) proposed an amendment to the bill to limit tax credits for rural and unserved areas with no broadband speeds at all, offering credits of 30 percent for DSL-esque speeds and 40 percent for 100 Mbps.  However, the amendment didn't make it in the economic stimulus bill expected to pass the Senate Tuesday.

Congressional leaders hope to reconcile the provisions of the House and Senate bills by the end of the week to present a bill for President Obama to sign on Monday, but the House had no tax breaks for deploying broadband services.

Time pressure and heavy duty lobbying could cause any number of scenarios. The Communications Workers of America have been heavily behind the broadband spending provisions in the stimulus bill. Meanwhile, AT&T and the cable companies have been making the rounds to lower the speed requirements for the different subsidies; the cable companies would like to see the bar dropped to 50 Mbps for "advanced" services, not 100 Mbps.

For more:
- House and Senate broadband bills jockey for clarity. Post.

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