‘‘(i) extends from the last point of
switching to the outside of the unit, build-
ing, dwelling, or office owned or leased by
a subscriber in the case of a telecommuni-
cations carrier,
‘‘(ii) extends from the customer side
of the mobile telephone switching office 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
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 oper-
ator, or
‘‘(iv) extends from a transmission/re-
ceive antenna (including such antenna)
which transmits and receives signals to or
from multiple subscribers to a trans-
mission/receive antenna (including such
antenna) on the outside of the unit, build-
ing, dwelling, or office owned or leased by
a subscriber in the case of a satellite car-
rier or other wireless carrier, unless such
other wireless carrier is also a tele-
communications carrier.
‘‘(C) PACKET
SWITCHING
EQUIPMENT.—
Packet switching equipment, regardless of loca-
tion, shall be taken into account under subpara-
graph (A) only if it is deployed in connection
with equipment described in subparagraph (B)
and it is uniquely designed to perform the func-
tion 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 func-
tions 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.
‘‘(11) QUALIFIED EXPENDITURE.—
‘‘(A) IN
GENERAL.—The term ‘qualified
expenditure’ means any amount chargeable to
capital account with respect to the purchase
and installation of qualified equipment (includ-
ing any upgrades thereto) for which deprecia-
tion is allowable under section 168.
‘‘(B) CERTAIN SATELLITE EXPENDITURES
EXCLUDED.—Such term shall not include any
expenditure with respect to the launching of
any satellite equipment.
‘‘(12) RESIDENTIAL
SUBSCRIBER.—The term
‘residential subscriber’ means an individual who pur-
chases broadband services which are delivered to
such individual’s dwelling.
‘‘(13) RURAL SUBSCRIBER.—
‘‘(A) IN GENERAL.—The term ‘rural sub-
scriber’ means a residential subscriber residing
in a dwelling located in a rural area or nonresi-
dential subscriber maintaining a permanent
place of business located in a rural area.
‘‘(B) RURAL AREA.—The term ‘rural area’
means any census tract which—
‘‘(i) is not within 10 miles of any in-
corporated or census designated place con-
taining more than 25,000 people, and
‘‘(ii) is not within a county or county
equivalent which has an overall population
density of more than 500 people per
square mile of land.
‘‘(14) SATELLITE
CARRIER.—The term ‘sat-
ellite carrier’ means any person using the facilities
of a satellite or satellite service licensed by the Fed-
eral 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 distribu-
tion of signals, and owning or leasing a capacity or
service on a satellite in order to provide such point-
to-multipoint distribution.
‘‘(15) SUBSCRIBER.—The term ‘subscriber’
means a person who purchases current generation
broadband services or next generation broadband
services.
‘‘(16) TELECOMMUNICATIONS
CARRIER.—The
term ‘telecommunications carrier’ has the meaning
given such term by section 3(44) of the Communica-
tions 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.
‘‘(17) TOTAL
POTENTIAL
SUBSCRIBER
POPU-
LATION.—The term ‘total potential subscriber popu-
lation’ means, with respect to any area and based on
the most recent census data, the total number of po-
tential residential subscribers residing in dwellings
located in such area and potential nonresidential
subscribers maintaining permanent places of busi-
ness located in such area.
‘‘(18) UNDERSERVED SUBSCRIBER.—
‘‘(A) IN
GENERAL.—The term ‘under-
served subscriber’ means a residential sub-
scriber residing in a dwelling located in an un-
derserved area or nonresidential subscriber
maintaining a permanent place of business lo-
cated in an underserved area.
‘‘(B) UNDERSERVED
AREA.—The term
‘underserved area’ means any census tract—
‘‘(i) the poverty level of which is at
least 30 percent (based on the most recent
census data),
‘‘(ii) the median family income of
which does not exceed—
‘‘(I) in the case of a census tract
located in a metropolitan statistical
area, 70 percent of the greater of the
metropolitan area median family in-
come or the statewide median family
income, and
‘‘(II) in the case of a census tract
located in a nonmetropolitan statis-
tical area, 70 percent of the non-
metropolitan statewide median family
income, or
‘‘(iii) which is located in an empower-
ment zone or enterprise community des-
ignated under section 1391.
‘‘(f) DESIGNATION OF CENSUS TRACTS.—The Sec-
retary shall, not later than 90 days after the date of the
enactment of this section, designate and publish those cen-
sus tracts meeting the criteria described in paragraphs
(13)(B) and (18)(B) of subsection (e), and such tracts
shall remain so designated for the period ending with the
termination date described in subsection (g).
‘‘(g) TERMINATION.—This section shall not apply to
expenditures incurred after December 31, 2005.’’
(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 fol-
lowing 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 mu-
tual or cooperative telephone company was
not exempt from taxation.’’
(d) CONFORMING AMENDMENT.—The table of sec-
tions 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) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to expenditures incurred after December
31, 2000.
(2) SPECIAL RULE.—The amendments made by
subsection (c) shall apply to amounts received after
December 31, 2000.
SEC. 4. REGULATORY MATTERS.
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 section 3) or otherwise subverting
the purpose of this Act.
SEC. 5. STUDY AND REPORT.
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that in order to maintain competitive neutrality, the
credit allowed under section 48A of the Internal Revenue
Code of 1986 (as added by section 3) should be adminis-
tered in such a manner so as to ensure that each class
of carrier receives the same level of financial incentive to
deploy current generation broadband services and next
generation broadband services.
(b) STUDY
AND REPORT.—The Secretary of the
Treasury shall, within 180 days after the effective date
of section 3, study the impact of the credit allowed under
section 48A of the Internal Revenue Code of 1986 (as
added by section 3) on the relative competitiveness of po-
tential classes of carriers of current generation broadband
services and next generation broadband services, and shall
report to Congress the findings of such study, together
with any legislative or regulatory proposals determined to
be necessary to ensure that the purposes of such credit
can be furthered without impacting competitive neutrality
among such classes of carriers.
Æ