I 
108TH CONGRESS 
1ST SESSION 
H. R. 769
To amend the Internal Revenue Code of 1986 to allow the expensing of 
broadband Internet access expenditures, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 13, 2003
Mr. ENGLISH (for himself, Mr. MATSUI, Mr. HAYES, and Mr. BALLENGER) 
introduced the following bill; which was referred to the Committee on 
Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow the 
expensing of broadband Internet access expenditures, and 
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. EXPENSING OF BROADBAND INTERNET ACCESS 
EXPENDITURES. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 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. 
‘‘(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 ex-
penditure 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 the 
purchase or installation of qualified equipment (in-
cluding any upgrades thereto), together with any di-
rect or indirect costs incurred and properly taken 
into account with respect to the connection of such 
qualified equipment to any qualified subscriber, but 
only if such costs are incurred after December 31, 
2002, and before January 1, 2008. 
‘‘(2) CERTAIN SATELLITE EXPENDITURES EX-
CLUDED.—Such term shall not include any costs in-
curred with respect to the launching of any satellite 
equipment. 
‘‘(3) LEASED EQUIPMENT.—Such term shall in-
clude so much of the purchase price paid by the les-
sor of equipment subject to a lease described in sub-
section (c)(2)(B) as is attributable to expenditures 
incurred by the lessee which would otherwise be de-
scribed in paragraph (1). 
‘‘(4) LIMITATION WITH REGARD TO CURRENT 
GENERATION BROADBAND SERVICES.—Only 50 per-
cent of the amounts taken into account under para-
graph (1) with respect to qualified equipment 
through which current generation broadband serv-
ices are provided shall be treated as qualified 
broadband expenditures. 
‘‘(c) WHEN
EXPENDITURES
TAKEN
INTO
AC-
COUNT.—For purposes of this section—
‘‘(1) IN
GENERAL.—Qualified broadband ex-
penditures with respect to qualified equipment shall 
be taken into account with respect to the first tax-
able year in which—
‘‘(A) current generation broadband services 
are provided through such equipment to quali-
fied subscribers, or
‘‘(B) next generation broadband services 
are provided through such equipment to quali-
fied 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 com-
mences with the taxpayer, and 
‘‘(ii) which is placed in service, 
after December 31, 2002. 
‘‘(B) SALE-LEASEBACKS.—For purposes of 
subparagraph (A), if property—
‘‘(i) is originally placed in service 
after December 31, 2002, by any person, 
and 
‘‘(ii) sold and leased back by such per-
son 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.—