I
106TH CONGRESS
2D SESSION
H. R. 4728
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 HOUSE OF REPRESENTATIVES
JUNE 22, 2000
Mr. ENGLISH (for himself Mr. MATSUI, Mr. HAYES, Mr. NEAL of Massachu-
setts, Mr. BALLENGER, Mr. BURR of North Carolina, Mrs. EMERSON,
Mr. FLETCHER, Mr. MCINTYRE, Mr. NUSSLE, Mr. POMEROY, Mr. SHER-
WOOD, Mr. THUNE, and Mrs. JONES of Ohio) 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 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 Representa-
tives 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 2000’’.
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 ac-
cess the Internet is necessary to ensure the contin-
ued expansion.
(3) Today, most residential Internet users, es-
pecially 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’’ commu-
nications 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 in-
come 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 sec-
ond will not be as ubiquitously available as is tele-
phone service until sometime between the years 2030
and 2040.
(8) Experts also believe that, under current fi-
nancial 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 the on-going economic expansion.
(10) It is, therefore, appropriate for Congress
to take action to narrow the current and future dis-
parity in the level of broadband access to the Inter-
net, and to accelerate deployment of next generation
broadband capability.
(b) PURPOSE.—The purpose of this Act is to accel-
erate 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 genera-
tion 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 quali-
fied 
equipment 
offering 
current 
generation
broadband services to rural subscribers or under-
served subscribers and taken into account with re-
spect to such taxable year.
‘‘(2) NEXT
GENERATION
BROADBAND
CRED-
IT.—The next generation broadband credit for any
taxable year is equal to 20 percent of the qualified
expenditures incurred with respect to qualified
equipment offering next generation broadband serv-
ices to all rural subscribers, all underserved sub-
scribers, or any other residential subscribers and
taken into account with respect to such taxable year.
‘‘(c) WHEN
EXPENDITURES
TAKEN
INTO
AC-
COUNT.—For purposes of this section—
‘‘(1) IN GENERAL.—Qualified expenditures with
respect to qualified equipment shall be taken into ac-
count with respect to the first taxable year in which
current generation broadband services or next gen-
eration broadband services are offered by the tax-
payer through such equipment to subscribers.
‘‘(2) OFFER
OF
SERVICES.—For purposes of
paragraph (1), the offer 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 taxpayer.
‘‘(d) SPECIAL ALLOCATION RULES.—
‘‘(1) CURRENT GENERATION BROADBAND SERV-
ICES.—For purposes of determining the current gen-
eration broadband credit under subsection (a)(1), 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, and
‘‘(B) the denominator of which is the total
potential subscriber population of the area
which the equipment is capable of serving.
‘‘(2) NEXT
GENERATION
BROADBAND
SERV-
ICES.—For purposes of determining the next genera-
tion broadband credit under subsection (a)(2), 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 pop-
ulations within the rural areas and under-
served 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, and
‘‘(B) the denominator of which is the total
potential subscriber population of the area
which the equipment is capable of serving.
‘‘(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 sat-
ellite equipment.
‘‘(2) CABLE OPERATOR.—The term ‘cable oper-
ator’ 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
CAR-
RIER.—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 SERV-
ICE.—The term ‘current generation broadband serv-
ice’ 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 sub-
scriber.
‘‘(5) NEXT
GENERATION
BROADBAND
SERV-
ICE.—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 10,000,000 bits per second from the
subscriber.
‘‘(6) 
NONRESIDENTIAL
SUBSCRIBER.—The
term ‘nonresidential subscriber’ means a person or
entity who purchases broadband services which are
delivered to the permanent place of business of such
person or entity.
‘‘(7) 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).
‘‘(8) 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 op-
erator, or satellite carrier) providing current genera-
tion 
broadband 
services 
or 
next 
generation
broadband service to subscribers through the radio
transmission of energy.
‘‘(9) PACKET
SWITCHING.—The term ‘packet
switching’ means controlling or routing the path of
a digitized transmission signal which is assembled
into packets or cells.
‘‘(10) QUALIFIED EQUIPMENT.—
‘‘(A) IN
GENERAL.—The term ‘qualified
equipment’ means equipment capable of pro-
viding 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 sub-
paragraph (C), equipment shall be taken into
account under subparagraph (A) only to the ex-
tent it—