Broadband Internet Access and the Digital
Divide: Federal Assistance Programs
Lennard G. Kruger
Specialist in Science and Technology Policy
Angele A. Gilroy
Specialist in Telecommunications Policy
September 23, 2010
Congressional Research Service
7-5700
www.crs.gov
RL30719
CRS Report for Congress
P
repared for Members and Committees of Congress
Broadband Internet Access and the Digital Divide: Federal Assistance Programs
Summary
The “digital divide” is a term that has been used to characterize a gap between “information haves
and have-nots,” or in other words, between those Americans who use or have access to
telecommunications and information technologies and those who do not. One important subset of
the digital divide debate concerns high-speed Internet access and advanced telecommunications
services, also known as broadband. Broadband is provided by a series of technologies (e.g.,
cable, telephone wire, fiber, satellite, wireless) that give users the ability to send and receive data
at volumes and speeds far greater than traditional “dial-up” Internet access over telephone lines.
Broadband technologies are currently being deployed primarily by the private sector throughout
the United States. While the numbers of new broadband subscribers continue to grow, studies and
data suggest that the rate of broadband deployment in urban/suburban and high income areas are
outpacing deployment in rural and low-income areas. Some policymakers, believing that
disparities in broadband access across American society could have adverse economic and social
consequences on those left behind, assert that the federal government should play a more active
role to avoid a “digital divide” in broadband access. One approach is for the federal government
to provide financial assistance to support broadband deployment in unserved and underserved
areas.
Economic stimulus legislation enacted by the 111th Congress included provisions that provided
federal financial assistance for broadband deployment. On February 17, 2009, President Obama
signed P.L. 111-5, the American Recovery and Reinvestment Act (ARRA). The ARRA provided a
total of $7.2 billion for broadband, consisting of $4.7 billion to NTIA/DOC for a newly
established Broadband Technology Opportunities Program and $2.5 billion to RUS/USDA
broadband programs.
The ARRA also directed the FCC to develop a National Broadband Plan, which was released on
March 16, 2010. The National Broadband Plan will likely spur considerable debate over what
actions, if any, the federal government should take in order to close the digital divide in
broadband access. As Congress considers various options for encouraging broadband deployment
and adoption, a key issue is how to strike a balance between providing federal assistance for
unserved and underserved areas where the private sector may not be providing acceptable levels
of broadband service, while at the same time minimizing any deleterious effects that government
intervention in the marketplace may have on competition and private sector investment.
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Broadband Internet Access and the Digital Divide: Federal Assistance Programs
Contents
Introduction ................................................................................................................................ 1
Status of Broadband Deployment in the United States ................................................................. 1
Broadband in Rural Areas ........................................................................................................... 3
Is Broadband Deployment Data Adequate?.................................................................................. 5
Broadband and the Federal Role.................................................................................................. 6
The National Broadband Plan................................................................................................ 8
Current Federal Broadband Programs.......................................................................................... 9
Rural Utilities Service Programs ......................................................................................... 10
The Universal Service Concept and the FCC ....................................................................... 10
Universal Service and the Telecommunications Act of 1996 .......................................... 11
Universal Service and Broadband.................................................................................. 13
Legislation in the 110th Congress............................................................................................... 14
Legislation in the 111th Congress ............................................................................................... 14
P.L. 111-5: The American Recovery and Reinvestment Act of 2009..................................... 15
Other Broadband Legislation in the 111th Congress.............................................................. 15
Concluding Observations .......................................................................................................... 18
Tables
Table 1. Selected Federal Domestic Assistance Programs Related to Broadband and
Telecommunications Development ......................................................................................... 19
Contacts
Author Contact Information ...................................................................................................... 23
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Broadband Internet Access and the Digital Divide: Federal Assistance Programs
Introduction
The “digital divide” is a term used to describe a perceived gap between “information haves and
have-nots,” or in other words, between those Americans who use or have access to
telecommunications and information technologies and those who do not.1 Whether or not
individuals or communities fall into the “information haves” category depends on a number of
factors, ranging from the presence of computers in the home, to training and education, to the
availability of affordable Internet access.
Broadband technologies are currently being deployed primarily by the private sector throughout
the United States. While the numbers of new broadband subscribers continue to grow, studies and
data suggest that the rate of broadband deployment in urban/suburban and high income areas are
outpacing deployment in rural and low-income areas. Some policymakers, believing that
disparities in broadband access across American society could have adverse economic and social
consequences on those left behind, assert that the federal government should play a more active
role to avoid a “digital divide” in broadband access. One approach—adopted in the American
Recovery and Reinvestment Act of 2009 (P.L. 111-5)—is for the federal government to provide
financial assistance, in the form of grants, loans, and grant/loan combinations, to support
broadband deployment in unserved and underserved areas.
Status of Broadband Deployment in the United
States
Prior to the late 1990s, American homes accessed the Internet at maximum speeds of 56 kilobits
per second by dialing up an Internet Service Provider (such as AOL) over the same copper
telephone line used for traditional voice service. A relatively small number of businesses and
institutions used broadband or high speed connections through the installation of special
“dedicated lines” typically provided by their local telephone company. Starting in the late 1990s,
cable television companies began offering cable modem broadband service to homes and
businesses. This was accompanied by telephone companies beginning to offer DSL service
(broadband over existing copper telephone wireline). Growth has been steep, rising from 2.8
million high speed lines reported as of December 1999, to 113 million lines as of June 30, 2009.2
Of the 113 million high speed lines reported by the FCC, 93.9 million serve residential users.3
Since the deployment of residential broadband in the United States, the primary residential
broadband technologies deployed continue to be cable modem and DSL.4 A distinction is often
made between “current generation” and “next generation” broadband (commonly referred to as
next generation networks or NGN). “Current generation” typically refers to currently deployed
cable, DSL, and many wireless systems, while “next generation” refers to dramatically faster
download and upload speeds offered by fiber technologies and also potentially by future
1 The term “digital divide” can also refer to international disparities in access to information technology. This report
focuses on domestic issues only.
2 FCC, Internet Access Services: Status as of June 30, 2009, released September 2010, p. 6. Available at
http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db0902/DOC-301294A1.pdf.
3 Ibid, p. 8.
4 Ibid.
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generations of cable, DSL, and wireless technologies.5 In general, the greater the download and
upload speeds offered by a broadband connection, the more sophisticated (and potentially
valuable) the application that is enabled.
The U.S. Department of Commerce report, Digital Nation: 21st Century America’s Progress
Towards Universal Broadband Internet Access (based on October 2009 U.S. Census Bureau
survey data) found that 64% of U.S. households have adopted broadband.6 According to the
FCC’s National Broadband Plan, 290 million Americans—95% of the U.S. population—currently
live in housing units with access to terrestrial, fixed broadband infrastructure capable of
supporting actual download speeds of at least 4 Mbps. This leaves a “gap” of 14 million people in
the United States living in 7 million housing units that do not have access to terrestrial broadband
infrastructure capable of this speed.7 Thus, while the broadband adoption or penetration rate
stands at about 64% of U.S. households, broadband availability is much higher, at 95% or more
of households, which means that approximately 30% of households have access to some type of
terrestrial (non-satellite) broadband service, but do not choose to subscribe.
An FCC consumer survey, conducted in October and November 2009, found that 35% or 80
million American adults do not use broadband at home, falling into three categories: those who do
not use the Internet at all (22%); those who use the Internet but do not have Internet access at
home (6%); and those who use dial-up to access the Internet (6%). The survey identified three
primary reasons why non-adopting Americans do not have broadband: cost, lack of digital
literacy, and the perceived insufficient relevance of broadband.8 Similarly, according to the
Department of Commerce report, the two most common reasons cited for not having broadband
at home are that it is perceived as not needed or too expensive. Lack of a home computer can also
be a major factor.9 The Department of Commerce report, the FCC’s National Broadband Plan, and
a survey conducted by the Pew Internet and American Life Project10 also found disparities in
broadband adoption among demographic groups. Populations continuing to lag behind in
broadband adoption include people with low incomes, seniors, minorities, the less-educated, non-
family households, and the non-employed.
Meanwhile, the FCC’s Sixth Broadband Deployment Report, released on July 20, 2010, identified
1,024 counties in the United States (out of a total of 3,230 counties) as “underserved areas.” For
these data, the FCC defines underserved areas as those with no or minimal numbers of
5 Initially, and for many years following, the FCC defined broadband (or more specifically “high-speed lines”) as over
200 kilobits per second (kbps) in at least one direction, which was roughly four times the speed of conventional dialup
Internet access. In recent years, the 200 kbps threshold was considered too low, and on March 19, 2008, the FCC
adopted a report and order (FCC 08-89) establishing new categories of broadband speed tiers for data collection
purposes. Specifically, 200 kbps to 768 kbps will be considered “first generation,” 768 kbps to 1.5 Mbps as “basic
broadband tier 1,” and increasingly higher speed tiers as broadband tiers 2 through 7 (tier seven is greater than or equal
to 100 Mbps in any one direction). Tiers can change as technology advances.
6 U.S. Department of Commerce, National Telecommunications and Information Administration, Digital Nation: 21st
Century America’s Progress Toward Universal Broadband Internet Access, February 2010, p. 4, available at
http://www.ntia.doc.gov/reports/2010/NTIA_internet_use_report_Feb2010.pdf.
7 Federal Communications Commission, Connecting America: The National Broadband Plan, March 17, 2010, p. 20.
8 Horrigan, John, Federal Communications Commission, Broadband Adoption and Use in America, OBI Working
Paper Series No. 1, February 2010, p. 5, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-
296442A1.pdf.
9 Digital Nation, p. 12.
10 Rainie, Lee, Pew Internet & American Life Project, Internet, broadband, and cell phone statistics, January 5, 2010,
available at http://www.pewinternet.org/~/media//Files/Reports/2010/PIP_December09_update.pdf.
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subscribers to broadband service with a minimum speed of 4 Mbps (download)/1 Mbps (upload).
These unserved areas are home to 24 million Americans living in 8.9 million households.11
Broadband in Rural Areas12
While the number of new broadband subscribers continues to grow, the rate of broadband
deployment in urban areas appears to be outpacing deployment in rural areas. While there are
many examples of rural communities with state of the art telecommunications facilities,13 recent
surveys and studies have indicated that, in general, rural areas tend to lag behind urban and
suburban areas in broadband deployment.
• Data from the Pew Internet & American Life Project indicate that while
broadband adoption is growing in urban, suburban, and rural areas, broadband
users make up larger percentages of urban and suburban users than rural users.
Pew found that the percentage of all U.S. adults with broadband at home is 61%
for urban areas, 64% for suburban areas, and 47% for rural areas.14
• The Department of Commerce report, Digital Nation, found that while the digital
divide between urban and rural areas has lessened since 2007, it still persists with
66% of urban households accessing broadband service in 2009, compared to 54%
of rural households.15
• The FCC’s Sixth Broadband Deployment Report, which identified 1,024 counties
as “underserved areas,” found that such areas appear to be more rural and have
lower income levels than the United States as a whole.16
The comparatively lower population density of rural areas is likely the major reason why
broadband is less deployed than in more highly populated suburban and urban areas. Particularly
for wireline broadband technologies—such as cable modem and DSL—the greater the
geographical distances among customers, the larger the cost to serve those customers. Thus, there
is often less incentive for companies to invest in broadband in rural areas than, for example, in an
urban area where there is more demand (more customers with perhaps higher incomes) and less
cost to wire the market area.17
Some policymakers believe that disparities in broadband access across American society could
have adverse consequences on those left behind, and that advanced telecommunications
11 Federal Communications Commission, Sixth Broadband Deployment Report, FCC 10-129, released July 20, 2010, p.
15, available at http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db0720/FCC-10-129A1.pdf.
12 For more information on rural broadband and broadband programs at the Rural Utilities Service, see CRS Report
RL33816, Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service, by Lennard G. Kruger.
13 See for example: National Exchange Carrier Association (NECA), Trends 2006: Making Progress With Broadband,
2006, 26 p. Available at http://www.neca.org/media/trends_brochure_website.pdf.
14 Internet, broadband, and cell phone statistics, p. 4.
15 Digital Nation, p. 11.
16 Sixth Broadband Deployment Report, p. 16.
17 The terrain of rural areas can also be a hindrance to broadband deployment because it is more expensive to deploy
broadband technologies in a mountainous or heavily forested area. An additional added cost factor for remote areas can
be the expense of “backhaul” (e.g., the “middle mile”) which refers to the installation of a dedicated line which
transmits a signal to and from an Internet backbone which is typically located in or near an urban area.
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applications critical for businesses and consumers to engage in e-commerce are increasingly
dependent on high speed broadband connections to the Internet. Thus, some say, communities and
individuals without access to broadband could be at risk to the extent that connectivity becomes a
critical factor in determining future economic development and prosperity. A February 2006 study
done by the Massachusetts Institute of Technology for the Economic Development
Administration of the Department of Commerce marked the first attempt to quantitatively
measure the impact of broadband on economic growth. The study found that “between 1998 and
2002, communities in which mass-market broadband was available by December 1999
experienced more rapid growth in employment, the number of businesses overall, and businesses
in IT-intensive sectors, relative to comparable communities without broadband at that time.”18
A June 2007 report from the Brookings Institution found that for every one percentage point
increase in broadband penetration in a state, employment is projected to increase by 0.2 to 0.3%
per year. For the entire U.S. private non-farm economy, the study projected an increase of about
300,000 jobs.19
Subsequently, a July 2009 study commissioned by the Internet Innovation Alliance found net
consumer benefits of home broadband on the order of $32 billion per year, up from an estimated
$20 billion in consumer benefits from home broadband in 2005.20
Some also argue that broadband is an important contributor to U.S. future economic strength with
respect to the rest of the world. Data from the Organization for Economic Cooperation and
Development (OECD) found the U.S. ranking 15th among OECD nations in broadband access per
100 inhabitants as of December 2009.21 By contrast, in 2001 an OECD study found the U.S.
ranking fourth in broadband subscribership per 100 inhabitants (after Korea, Sweden, and
Canada).22 While many argue that declining U.S. performance in international broadband
rankings is a cause for concern,23 others maintain that the OECD data undercount U.S. broadband
deployment,24 and that cross-country broadband deployment comparisons are not necessarily
meaningful and are inherently problematic.25 Finally, an issue related to international broadband
18 Gillett, Sharon E., Massachusetts Institute of Technology, Measuring Broadband’s Economic Impact, report
prepared for the Economic Development Administration, U.S. Department of Commerce, February 28, 2006 p. 4.
19 Crandall, Robert, William Lehr, and Robert Litan, The Effects of Broadband Deployment on Output and
Employment: A Cross-sectional Analysis of U.S. Data, June 2007, 20 pp. Available at http://www3.brookings.edu/
views/papers/crandall/200706litan.pdf.
20 Mark Dutz, Jonathan Orszag, and Robert Willig, The Substantial Consumer Benefits of Broadband Connectivity for
U.S. Households, Internet Innovation Alliance, July 2009, p. 4, http://internetinnovation.org/files/special-reports/
CONSUMER_BENEFITS_OF_BROADBAND.pdf.
21 OECD, OECD Broadband Portal. Available at http://www.oecd.org/sti/ict/broadband.
22 OECD, Directorate for Science, Technology and Industry, The Development of Broadband Access in OECD
Countries, October 29, 2001, 63 pp. For a comparison of government broadband policies, also see OECD, Directorate
for Science, Technology and Industry, Broadband Infrastructure Deployment: The Role of Government Assistance,
May 22, 2002, 42 pp.
23 See Turner, Derek S., Free Press, Broadband Reality Check II: The Truth Behind America’s Digital Divide, August
2006, pp 8-11. Available at http://www.freepress.net/files/bbrc2-final.pdf; and Turner, Derek S., Free Press, ‘Shooting
the Messenger’ Myth vs. Reality: U.S. Broadband Policy and International Broadband Rankings, July 2007, 25 pp.,
available at http://www.freepress.net/files/shooting_the_messenger.pdf.
24 National Telecommunications and Information Administration, Fact Sheet: United States Maintains Information and
Communication Technology (ICT) Leadership and Economic Strength, at http://www.ntia.doc.gov/ntiahome/press/
2007/ICTleader_042407.html.
25 See Wallsten, Scott, Progress and Freedom Foundation, Towards Effective U.S. Broadband Policies, May 2007, 19
(continued...)
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rankings is the extent to which broadband speeds and prices differ between the U.S. and the rest
of the world.26
Is Broadband Deployment Data Adequate?
Obtaining an accurate snapshot of the status of broadband deployment is problematic. Anecdotes
abound of rural and low-income areas which do not have adequate Internet access, as well as
those which are receiving access to high-speed, state-of-the-art connections. Rapidly evolving
technologies, the constant flux of the telecommunications industry, the uncertainty of consumer
wants and needs, and the sheer diversity and size of the nation’s economy and geography make
the status of broadband deployment very difficult to characterize. The FCC periodically collects
broadband deployment data from the private sector via “FCC Form 477”—a standardized
information gathering survey. Statistics derived from the Form 477 survey are published every six
months. Additionally, data from Form 477 are used as the basis of the FCC’s (to date) five
broadband deployment reports.
The FCC is working to refine the data used in future Reports in order to provide an increasingly
accurate portrayal. In its March 17, 2004 Notice of Inquiry for the Fourth Report, the FCC sought
comments on specific proposals to improve the FCC Form 477 data gathering program.27 On
November 9, 2004, the FCC voted to expand its data collection program by requiring reports
from all facilities based carriers regardless of size in order to better track rural and underserved
markets, by requiring broadband providers to provide more information on the speed and nature
of their service, and by establishing broadband-over-power line as a separate category in order to
track its development and deployment. The FCC Form 477 data gathering program was extended
for five years beyond its March 2005 expiration date.28
On April 16, 2007, the FCC announced a Notice of Proposed Rulemaking which sought comment
on a number of broadband data collection issues, including how to develop a more accurate
picture of broadband deployment; gathering information on price, other factors determining
consumer uptake of broadband, and international comparisons; how to improve data on wireless
(...continued)
pp. Available at http://www.pff.org/issues-pubs/pops/pop14.7usbroadbandpolicy.pdf. Also see Ford, George, Phoenix
Center, The Broadband Performance Index: What Really Drives Broadband Adoption Across the OECD?, Phoenix
Center Policy Paper Number 33, May 2008, 27 pp; available at http://www.phoenix-center.org/pcpp/PCPP33Final.pdf.
26 See price and services and speed data on OECD Broadband Portal, available at http://www.oecd.org/sti/ict/
broadband; Turner, Derek S., Free Press, Broadband Reality Check II: The Truth Behind America’s Digital Divide,
August 2006, pp 5-9; Kende, Michael, Analysis Consulting Limited, Survey of International Broadband Offerings,
October 4, 2006, 12 p, available at http://www.analysys.com/pdfs/BroadbandPerformanceSurvey.pdf; and Atkinson,
Robert D., The International Technology and Innovation Foundation, Explaining International Broadband Leadership,
May 2008, 108 p, available at http://www.itif.org/files/ExplainingBBLeadership.pdf.
27 Federal Communications Commission, Notice of Inquiry, “Concerning the Deployment of Advanced
Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and possible Steps to
Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996,” FCC 04-55, March 17,
2004, p. 6.
28 FCC News Release, FCC Improves Data Collection to Monitor Nationwide Broadband Rollout, November 9, 2004.
Available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-254115A1.pdf.
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broadband; how to collect information on subscribership to voice over Internet Protocol service
(VoIP); and whether to modify collection of speed tier information.29
On March 19, 2008, the FCC adopted an order that substantially expands its broadband data
collection capability. Specifically, the order expands the number of broadband reporting speed
tiers to capture more information about upload and download speeds offered in the marketplace,
requires broadband providers to report numbers of broadband subscribers by census tract, and
improves the accuracy of information collected on mobile wireless broadband deployment.
Additionally, in a Further Notice of Proposed Rulemaking, the FCC sought comment on
broadband service pricing and availability.30 The July 2009 data release (providing data as of June
30, 2008) was the final data set gathered under the old FCC Form 477. The February 2010 data
report (December 31, 2008 data) reflected the new Form 477 data collection requirements.
Meanwhile, during the 110th Congress, state initiatives to collect broadband deployment data in
order to promote broadband in underserved areas were viewed as a possible model for
governmental efforts to encourage broadband. The Broadband Data Improvement Act was
enacted by the 110th Congress and became P.L. 110-385 on October 10, 2008. The law requires
the FCC to collect demographic information on unserved areas, data comparing broadband
service with 75 communities in at least 25 nations abroad, and data on consumer use of
broadband. The act also directs the Census Bureau to collect broadband data, the Government
Accountability Office to study broadband data metrics and standards, and the Department of
Commerce to provide grants supporting state broadband initiatives.
P.L. 111-5, the American Recovery and Reinvestment Act, provided NTIA with an appropriation
of $350 million to implement the Broadband Data Improvement Act and to develop and maintain
a national broadband inventory map, which shall be made accessible to the public no later than
two years after enactment.31
Finally, the FCC’s National Broadband Plan addressed the broadband data issue, recommending
that the FCC and the U.S. Bureau of Labor Statistics (BLS) should collect more detailed and
accurate data on actual availability, penetration, prices, churn, and bundles offered by broadband
service providers to consumers and businesses, and should publish analyses of these data.
Broadband and the Federal Role
The Telecommunications Act of 1996 (P.L. 104-104) addressed the issue of whether the federal
government should intervene to prevent a “digital divide” in broadband access. Section 706
requires the FCC to determine whether “advanced telecommunications capability [i.e., broadband
or high-speed access] is being deployed to all Americans in a reasonable and timely fashion.”
29 Federal Communications Commission, Notice Proposed Rulemaking, “Development of Nationwide Broadband Data
to Evaluate Reasonable and Timely Deployment of Advanced Services to All Americans, Improvement of Wireless
Broadband Subscribership Data, and Development of Data on Interconnected Voice Over Internet Protocol (VoIP)
Subscribership,” WC Docket No. 07-38, FCC 07-17, released April 16, 2007, 56 pp.
30 FCC, News Release, “FCC Expands, Improves Broadband Data Collection,” March 19, 2008. Available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-280909A1.pdf.
31 For more information on the national broadband mapping program and the State Broadband Data and Development
Program, see http://www.ntia.doc.gov/broadbandgrants/broadbandmapping.html.
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Since 1999, the FCC has adopted and released six reports pursuant to Section 706. The first five
reports formally concluded that the deployment of advanced telecommunications capability to all
Americans is reasonable and timely. The sixth 706 report was adopted on July 16, 2010, and
released on July 20, 2010.32 Unlike the first five 706 reports, the Sixth Broadband Deployment
Report concluded that “broadband is not being deployed to all Americans in a reasonable and
timely fashion.” According to the sixth 706 report:
Our analysis shows that roughly 80 million American adults do not subscribe to broadband at
home, and approximately 14 to 24 million Americans do not have access to broadband today.
The latter group appears to be disproportionately lower-income Americans and Americans
who live in rural areas. The goal of the statute, and the standard against which we measure
our progress, is universal broadband availability. We have not achieved this goal today, nor
does it appear that we will achieve success without changes to present policies. The evidence
further indicates that market forces alone are unlikely to ensure that the unserved minority of
Americans will be able to obtain the benefits of broadband anytime in the near future.
Therefore, if we remain on our current course, a large number of Americans likely will
remain excluded from the significant benefits of broadband that most other Americans can
access today. Given the ever-growing importance of broadband to our society, we are unable
to conclude that broadband is being reasonably and timely deployed to all Americans in this
situation.33
FCC Commissioners Robert McDowell and Meredith Baker issued dissenting statements,
maintaining that there is insufficient justification for the 706 report conclusion that broadband is
not being deployed in a reasonable and timely fashion. The dissenting commissioners argued that
the report’s conclusions are inappropriately based on subscribership data (as opposed to
deployment data); that since the late 1990s, broadband deployment by the private sector has been
and continues to be robust; and that it is inappropriate and misleading to set a rigid broadband
speed standard of 4Mbps (download)/1 Mbps (upload) in order to determine whether or not
broadband is being deployed.34
Section 706 of the Telecommunications Act of 1996 states that if the FCC formally determines
that broadband is not being deployed in a reasonable and timely fashion, the FCC is directed
“take immediate action to accelerate deployment of such capability by removing barriers to
infrastructure investment and by promoting competition in the telecommunications market.”
According to the Sixth Broadband Deployment Report, the FCC has already begun this action by
initiating various proceedings to implement the National Broadband Plan. According to the sixth
706 report, “through these proceedings, and others still to be commenced, we will work to ensure
that broadband is being deployed to all Americans in a reasonable and timely fashion.”35
32 Federal Communications Commission, Sixth Broadband Deployment Report, “In the Matter of Inquiry Concerning
the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion,
and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, as
Amended by the Broadband Data Improvement Act,” GN Docket No. 09-137, FCC 10-129, Adopted July 16, 2010,
Released July 20, 2010, 79 pp., available at http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db0720/FCC-10-
129A1.pdf.
33 Ibid., p. 19.
34 Ibid., p. 74, 77.
35 Ibid., p. 20.
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The National Broadband Plan
As mandated by the ARRA, on March 16, 2010, the FCC publically released its report,
Connecting America: The National Broadband Plan.36 The National Broadband Plan (NBP) seeks
to “create a high-performance America” which the FCC defines as “a more productive, creative,
efficient America in which affordable broadband is available everywhere and everyone has the
means and skills to use valuable broadband applications.”37 In order to achieve this mission, the
NBP recommends that the country set six goals for 2020:
• Goal No. 1: At least 100 million U.S. homes should have affordable access to
actual download speeds of at least 100 megabits per second and actual upload
speeds of at least 50 megabits per second.
• Goal No. 2: The United States should lead the world in mobile innovation, with
the fastest and most extensive wireless networks of any nation.
• Goal No. 3: Every American should have affordable access to robust broadband
service, and the means and skills to subscribe if they so choose.
• Goal No. 4: Every American community should have affordable access to at least
1 gigabit per second broadband service to anchor institutions such as schools,
hospitals and government buildings.
• Goal No. 5: To ensure the safety of the American people, every first responder
should have access to a nationwide, wireless, interoperable broadband public
safety network.
• Goal No. 6: To ensure that America leads in the clean energy economy, every
American should be able to use broadband to track and manage their real-time
energy consumption.
The National Broadband Plan is categorized into three parts:
• Part I (Innovation and Investment) which “discusses recommendations to
maximize innovation, investment and consumer welfare, primarily through
competition. It then recommends more efficient allocation and management of
assets government controls or influences.”38 The recommendations address a
number of issues, including spectrum policy, improved broadband data
collection, broadband performance standards and disclosure, special access rates,
interconnection, privacy and cybersecurity, child online safety, poles and rights-
of-way, research and experimentation (R&E) tax credits, R&D funding.
• Part II (Inclusion) which “makes recommendations to promote inclusion—to
ensure that all Americans have access to the opportunities broadband can
provide.”39 Issues include reforming the Universal Service Fund, intercarrier
compensation, federal assistance for broadband in Tribal lands, expanding
36 Available at http://www.broadband.gov/plan/. For more information on the National Broadband Plan, see CRS
Report R41324, The National Broadband Plan, by Lennard G. Kruger et al.
37 Federal Communications Commission, Connecting America: The National Broadband Plan, March 17, 2010, p.9.
38 Ibid., p. 11.
39 Ibid.
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existing broadband grant and loan programs at the Rural Utilities Service, enable
greater broadband connectivity in anchor institutions, and improved broadband
adoption and utilization especially among disadvantaged and vulnerable
populations.
• Part III (National Purposes) which “makes recommendations to maximize the
use of broadband to address national priorities. This includes reforming laws,
policies and incentives to maximize the benefits of broadband in areas where
government plays a significant role.”40 National purposes include health care,
education, energy and the environment, government performance, civic
engagement, and public safety. Issues include telehealth and health IT, online
learning and modernizing educational broadband infrastructure, digital literacy
and job training, smart grid and smart buildings, federal support for broadband in
small businesses, telework within the federal government, cybersecurity and
protection of critical broadband infrastructure, copyright of public digital media,
interoperable public safety communications, next generation 911 networks and
emergency alert systems.
The release of the National Broadband Plan is seen by many as a precursor towards the
development of a national broadband policy—whether comprehensive or piecemeal—that will
likely be shaped and developed by Congress, the FCC, and the Administration. Upon release of
the NBP, President Obama issued the following statement:
My Administration will build upon our efforts over the past year to make America’s
nationwide broadband infrastructure the world’s most powerful platform for economic
growth and prosperity, including improving access to mobile broadband, maximizing
technology innovation, and supporting a nationwide, interoperable public safety wireless
broadband network.41
Meanwhile, Congress will play a major role in implementing the National Broadband Plan, both
by considering legislation to implement NBP recommendations, and by overseeing (and possibly
funding) broadband activities conducted by the FCC and executive branch agencies.
Current Federal Broadband Programs
Aside from the broadband programs newly established by the American Recovery and
Reinvestment Act of 2009 (P.L. 111-5),42 the Rural Broadband Access Loan and Loan Guarantee
Program and the Community Connect Broadband Grants, both at the Rural Utilities Service of the
U.S. Department of Agriculture, are currently the only federal funding programs exclusively
dedicated to deploying broadband infrastructure. However, there exist other federal programs that
provide financial assistance for various aspects of telecommunications development. The major
vehicle for funding telecommunications development, particularly in rural and low-income areas,
is the Universal Service Fund (USF). While the USF’s High Cost Program does not explicitly
40 Ibid.
41 The White House, Office of the Press Secretary, “Statement from the President on the National Broadband Plan,”
March 16, 2010, available at http://www.whitehouse.gov/the-press-office/statement-president-national-broadband-plan.
42 See CRS Report R40436, Broadband Infrastructure Programs in the American Recovery and Reinvestment Act, by
Lennard G. Kruger.
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Broadband Internet Access and the Digital Divide: Federal Assistance Programs
fund broadband infrastructure, subsidies are used, in many cases, to upgrade existing telephone
networks so that they are capable of delivering high-speed services. Additionally, subsidies
provided by USF’s Schools and Libraries Program and Rural Health Care Program are used for a
variety of telecommunications services, including broadband access.
Table 1 (at the end of this report) shows selected federal domestic assistance programs
throughout the federal government that currently can be associated with broadband and
telecommunications development. The table categorizes the programs in three ways: programs
exclusively devoted to the deployment of broadband infrastructure; programs which focus on or
include deployment of telecommunications infrastructure generally (which typically can and does
include broadband); and applications-specific programs which fund some aspect of broadband
access or adoption as a means towards supporting a particular application, such as distance
learning or telemedicine.
Rural Utilities Service Programs
The Rural Electrification Administration (REA), subsequently renamed the Rural Utilities Service
(RUS), was established by the Roosevelt Administration in 1935. Initially, it was established to
provide credit assistance for the development of rural electric systems. In 1949, the mission of
REA was expanded to include rural telephone providers. Congress further amended the Rural
Electrification Act in 1971 to establish within REA a Rural Telephone Account and the Rural
Telephone Bank (RTB). Rural Telephone Loans and Loan Guarantees provide long-term direct
and guaranteed loans for telephone lines, facilities, or systems to furnish and improve
telecommunications service in rural areas. The RTB—liquidated in FY2006—was a public-
private partnership intended to provide additional sources of capital that would supplement loans
made directly by RUS. Another program, the Distance Learning and Telemedicine Program,
specifically addresses health care and education needs of rural America.
RUS implements two programs specifically targeted at providing assistance for broadband
deployment in rural areas: the Rural Broadband Access Loan and Loan Guarantee Program and
Community Connect Broadband Grants. The 110th Congress reauthorized and reformed the Rural
Broadband Access Loan and Loan Guarantee program as part of the 2008 farm bill (P.L. 110-
234). For further information on rural broadband and the RUS broadband programs, see CRS
Report RL33816, Broadband Loan and Grant Programs in the USDA’s Rural Utilities Service, by
Lennard G. Kruger.
The Universal Service Concept and the FCC43
Since its creation in 1934 the Federal Communications Commission (FCC) has been tasked with
“mak[ing] available, so far as possible, to all the people of the United States ... a rapid, efficient,
Nation-wide, and world-wide wire and radio communications service with adequate facilities at
reasonable charges.”44 This mandate led to the development of what has come to be known as the
universal service concept.
43 The section on universal service was prepared by Angele Gilroy, Specialist in Telecommunications, Resources,
Science and Industry Division. For more information on universal service, see CRS Report RL33979, Universal
Service Fund: Background and Options for Reform, by Angele A. Gilroy.
44 Communications Act of 1934, As Amended, Title I sec.1 [47 U.S.C. 151].
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The universal service concept, as originally designed, called for the establishment of policies to
ensure that telecommunications services are available to all Americans, including those in rural,
insular and high cost areas, by ensuring that rates remain affordable. Over the years this concept
fostered the development of various FCC policies and programs to meet this goal. The FCC offers
universal service support through a number of direct mechanisms that target both providers of and
subscribers to telecommunications services.45
The development of the federal universal service high cost fund is an example of provider-
targeted support. Under the high cost fund, eligible telecommunications carriers, usually those
serving rural, insular and high cost areas, are able to obtain funds to help offset the higher than
average costs of providing telephone service.46 This mechanism has been particularly important to
rural America where the lack of subscriber density leads to significant costs. FCC universal
service policies have also been expanded to target individual users. Such federal programs
include two income-based programs, Link Up and Lifeline, established in the mid-1980s to assist
economically needy individuals. The Link Up program assists low-income subscribers with
paying the costs associated with the initiation of telephone service and the Lifeline program
assists low-income subscribers with paying the recurring monthly service charges. Funding to
assist carriers providing service to individuals with speech and/or hearing disabilities is also
provided through the Telecommunications Relay Service Fund. Effective January 1, 1998,
schools, libraries, and rural health care providers also qualified for universal service support.
Universal Service and the Telecommunications Act of 1996
Passage of the Telecommunications Act of 1996 (P.L. 104-104) codified the long-standing
commitment by U.S. policymakers to ensure universal service in the provision of
telecommunications services.
The Schools and Libraries, and Rural Health Care Programs
Congress, through the 1996 act, not only codified, but also expanded the concept of universal
service to include, among other principles, that elementary and secondary schools and
classrooms, libraries, and rural health care providers have access to telecommunications services
for specific purposes at discounted rates. (See Sections 254(b)(6) and 254(h)of the 1996
Telecommunications Act, 47 U.S.C. 254.)
1. The Schools and Libraries Program. Under universal service provisions
contained in the 1996 act, elementary and secondary schools and classrooms and
libraries are designated as beneficiaries of universal service discounts. Universal
service principles detailed in Section 254(b)(6) state that “Elementary and
secondary schools and classrooms ... and libraries should have access to
advanced telecommunications services.” The act further requires in Section
254(h)(1)(B) that services within the definition of universal service be provided
to elementary and secondary schools and libraries for education purposes at
45 Many states participate in or have programs that mirror FCC universal service mechanisms to help promote universal
service goals within their states.
46 Additional FCC policies such as rate averaging and pooling have also been implemented to assist high cost carriers.
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discounts, that is at “rates less than the amounts charged for similar services to
other parties.”
The FCC established the Schools and Libraries Division within the Universal
Service Administrative Company (USAC) to administer the schools and libraries
or “E (education)-rate” program to comply with these provisions. Under this
program, eligible schools and libraries receive discounts ranging from 20 to 90
percent for telecommunications services depending on the poverty level of the
school’s (or school district’s) population and its location in a high cost
telecommunications area. Three categories of services are eligible for discounts:
internal connections (e.g., wiring, routers and servers); Internet access; and
telecommunications and dedicated services, with the third category receiving
funding priority. According to data released by program administrators,
approximately $26 billion in funding has been committed over the first twelve
years of the program with funding released to all states, the District of Columbia
and all territories. Funding commitments for funding Year 2010 (July 1, 2010-
June 30, 2011), the 13th and current year of the program, totaled almost $1.0
billion as of August 3, 2010.47
2. The Rural Health Care Program. Section 254(h) of the 1996 act requires that
public and non-profit rural health care providers have access to
telecommunications services necessary for the provision of health care services at
rates comparable to those paid for similar services in urban areas. Subsection
254(h)(1) further specifies that “to the extent technically feasible and
economically reasonable” health care providers should have access to advanced
telecommunications and information services. The FCC established the Rural
Health Care Division (RHCD) within the USAC to administer the universal
support program to comply with these provisions. Under FCC established rules
only public or non-profit health care providers are eligible to receive funding.
Eligible health care providers, with the exception of those requesting only access
to the Internet, must also be located in a rural area. The funding ceiling, or cap,
for this support was established at $400 million annually. The funding level for
Year One of the program (January 1998-June 30, 1999) was set at $100 million.
Due to less than anticipated demand, the FCC established a $12 million funding
level for the second year (July 1, 1999 to June 30, 2000) of the program but has
since returned to a $400 million yearly cap. As of July 31, 2010, covering the
first 12 years of the program, a total of $394.3 million has been committed to
4,788 rural health care providers. The primary use of the funding is to provide
reduced rates for telecommunications and information services necessary for the
provision of health care.48 In addition, in 2007 the FCC established the “Rural
Health Care Pilot Program” to help public and non-profit health care providers
build state and region-wide broadband networks dedicated to the provision of
health care services. As of July 31, 2010, a total of $68.8 million of the $417.8
million authorized for the Pilot program has been committed to 32 of the 62
projects designated by the FCC to receive support under the program.
47 For additional information on this program, including funding commitments, see the E-rate website:
http://www.universalservice.org/sl/.
48 For additional information on this program, including funding commitments, see the RHCD website:
http://www.universalservice.org/rhc/.
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The Telecommunications Development Fund
Section 714 of the 1996 act created the Telecommunications Development Fund (TDF). The TDF
is a private, non-governmental, venture capital corporation currently overseen by a five-member
board of directors and fund management. The TDF focuses on seed, early stage, and select later
stage investments in communications and has $80 million under management in two funds. Fund
I is no longer making new investments. Fund II remains active and currently has 13 companies in
its investment portfolio. Funding is largely derived from the interest earned from the upfront
payments bidders submit to participate in FCC auctions. The TDF also provides entrepreneur
education, training, management and technical assistance in underserved rural and urban
communities through the TDF Foundation.49
Universal Service and Broadband
One of the policy debates surrounding universal service is whether access to advanced
telecommunications services (i.e., broadband) should be incorporated into universal service
objectives. The term universal service, when applied to telecommunications, refers to the ability
to make available a basket of telecommunications services to the public, across the nation, at a
reasonable price. As directed in the 1996 Telecommunications Act [Section 254(c)] a federal-state
Joint Board was tasked with defining the services which should be included in the basket of
services to be eligible for federal universal service support; in effect using and defining the term
“universal service” for the first time. The Joint Board’s recommendation, which was subsequently
adopted by the FCC in May 1997, included the following in its universal service package: voice
grade access to and some usage of the public switched network; single line service; dual tone
signaling; access to directory assistance; emergency service such as 911; operator services; and
access and interexchange (long distance) service.
Some policy makers expressed concern that the FCC-adopted definition is too limited and does
not take into consideration the importance and growing acceptance of advanced services such as
broadband and Internet access. They point to a number of provisions contained in the Universal
Service section of the 1996 Act to support their claim. Universal service principles contained in
Section 254(b)(2) state that “Access to advanced telecommunications services should be provided
to all regions of the Nation.” The subsequent principle (b)(3) calls for consumers in all regions of
the nation including “low-income” and those in “rural, insular, and high cost areas” to have
access to telecommunications and information services including “advanced services” at a
comparable level and a comparable rate charged for similar services in urban areas. Such
provisions, they state, dictate that the FCC expand its universal service definition.
The 1996 act does take into consideration the changing nature of the telecommunications sector
and allows for the universal service definition to be modified if future conditions warrant. Section
254(c)of the act states that “universal service is an evolving level of telecommunications
services” and the FCC is tasked with “periodically” reevaluating this definition “taking into
account advances in telecommunications and information technologies and services.”
Furthermore, the Joint Board is given specific authority to recommend “from time to time” to the
FCC modification in the definition of the services to be included for federal universal service
support. The Joint Board, on November 19, 2007, concluded such an inquiry and recommended
that the FCC change the mix of services eligible for universal service support. The Joint Board
49 For additional information on the TDF fund and TDF Foundation see the TDF website at http://www.tdfund.com.
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recommended, among other things, that “the universal availability of broadband Internet
services” be included in the nation’s communications goals and hence be supported by federal
universal service funds.50 The FCC in its national broadband plan, Connecting America: the
National Broadband Plan, recommended that access to and adoption of broadband be a national
goal and had proposed that the Universal Service Fund be restructured to become a vehicle to
help reach this goal.51 Others caution that a more modest approach is appropriate given the
“universal mandate” associated with this definition and the uncertainty and costs associated with
mandating nationwide deployment of such advanced services as a universal service policy goal.
Legislation in the 110th Congress
In the 110th Congress, legislation was enacted to provide financial assistance for broadband
deployment. Of particular note is the reauthorization of the Rural Utilities Service (RUS)
broadband loan program, which was enacted as part of the 2008 farm bill (P.L. 110-234). In
addition to reauthorizing and reforming the RUS broadband loan program, P.L. 110-234 contains
provisions establishing a National Center for Rural Telecommunications Assessment and
requiring the FCC and RUS to formulate a comprehensive rural broadband strategy.
The Broadband Data Improvement Act (P.L. 110-385) was enacted by the 110th Congress and
required the FCC to collect demographic information on unserved areas, data comparing
broadband service with 75 communities in at least 25 nations abroad, and data on consumer use
of broadband. The act also directed the Census Bureau to collect broadband data, the Government
Accountability Office to study broadband data metrics and standards, and the Department of
Commerce to provide grants supporting state broadband initiatives.
Meanwhile, the America COMPETES Act (H.R. 2272) was enacted (P.L. 110-69) and contained a
provision authorizing the National Science Foundation (NSF) to provide grants for basic research
in advanced information and communications technologies. Areas of research included affordable
broadband access, including wireless technologies. P.L. 110-69 also directs NSF to develop a plan
that describes the current status of broadband access for scientific research purposes.
Legislation in the 111th Congress
In the 111th Congress, legislation has been introduced that would provide financial assistance for
broadband deployment. Of particular note, provisions in the American Recovery and
Reinvestment Act of 2009 (P.L. 111-5) provided grants and loans to support broadband access and
adoption in unserved and underserved areas.
50 The Joint Board recommended that the definition of those services that qualify for universal service support be
expanded and that the nation’s communications goals include the universal availability of: mobility services (i.e.,
wireless voice); broadband Internet services; and voice services at affordable and comparable rates for all rural and
non-rural areas. For a copy of this recommendation see http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-07J-
4A1.pdf.
51 For a further discussion of the role of the Universal Service Fund in the national broadband plan see CRS Report
RL33979, Universal Service Fund: Background and Options for Reform, by Angele A. Gilroy.
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P.L. 111-5: The American Recovery and Reinvestment Act of 2009
On February 17, 2009, President Obama signed P.L. 111-5, the American Recovery and
Reinvestment Act (ARRA). Broadband provisions of the ARRA provided a total of $7.2 billion,
for broadband grants, loans, and loan/grant combinations. The total consisted of $4.7 billion to
NTIA/DOC for a newly established Broadband Technology Opportunities Program (grants) and
$2.5 billion to the RUS/USDA Broadband Initiatives Program (grants, loans, and grant/loan
combinations).52
Regarding the $2.5 billion to RUS/USDA broadband programs, the ARRA specified that at least
75% of the area to be served by a project receiving funds shall be in a rural area without sufficient
access to high speed broadband service to facilitate economic development, as determined by the
Secretary of Agriculture. Priority was given to projects that provide service to the most rural
residents that do not have access to broadband services. Priority was also given to borrowers and
former borrowers of rural telephone loans.
Of the $4.7 billion appropriated to NTIA:
• $4.35 billion was directed to a competitive broadband grant program, of which
not less than $200 million shall be available for competitive grants for expanding
public computer center capacity (including at community colleges and public
libraries); not less than $250 million to encourage sustainable adoption of
broadband service; and $10 million transferred to the Department of Commerce
Office of Inspector General for audits and oversight; and
• $350 million was directed for funding the Broadband Data Improvement Act
(P.L. 110-385) and for the purpose of developing and maintaining a broadband
inventory map, which shall be made accessible to the public no later than two
years after enactment. Funds deemed necessary and appropriate by the Secretary
of Commerce may be transferred to the FCC for the purposes of developing a
national broadband plan, which shall be completed one year after enactment.
For more information on implementation of the broadband provisions of the ARRA, see CRS
Report R40436, Broadband Infrastructure Programs in the American Recovery and Reinvestment
Act, by Lennard G. Kruger. For information on the distribution of ARRA broadband grants and
loans, see CRS Report R41164, Distribution of Broadband Stimulus Grants and Loans:
Applications and Awards, by Lennard G. Kruger.
Other Broadband Legislation in the 111th Congress
P.L. 111-8 (H.R. 1105). Omnibus Appropriations Act, 2009. Appropriates to RUS/USDA $15.619
million to support a loan level of $400.487 million for the Rural Broadband Access Loan and
Loan Guarantee Program, and $13.406 million for the Community Connect Grant Program. To
the FCC, designates not less than $3 million to establish and administer a State Broadband Data
and Development matching grants program for State-level broadband demand aggregation
activities and creation of geographic inventory maps of broadband service to identify gaps in
52 For information on existing broadband programs at RUS, see CRS Report RL33816, Broadband Loan and Grant
Programs in the USDA’s Rural Utilities Service, by Lennard G. Kruger.
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service and provide a baseline assessment of statewide broadband deployment. Passed House
February 25, 2009. Passed Senate March 10, 2009. Signed by President, March 12, 2009.
P.L. 111-32 (H.R. 2346). Supplemental Appropriations Act, 2009. Provides not less than $3
million to the FCC to develop a national broadband plan pursuant to the American Recovery and
Reinvestment Act of 2009. Introduced May 12, 2009; referred to Committee on Appropriations.
Passed House May 14, 2009; passed Senate May 21, 2009. Signed by President, June 24, 2009.
P.L. 111-80 (H.R. 2997). Agriculture, Rural Development, Food and Drug Administration, and
Related Agencies Appropriations Act, 2010. For Rural Utilities Service, U.S. Department of
Agriculture, provides $28.96 million to support a loan level of $400 million for the broadband
loan program, and $17.97 million for broadband community connect grants. Introduced June 23,
2009; referred to Committee on Appropriations. Reported by Committee on Appropriations June
23, 2009. Passed House July 9, 2009. Passed Senate August 4, 2009. Conference Report (H.Rept.
111-279) printed September 30, 2009. Signed by President October 21, 2009.
H.R. 691 (Meeks). Broadband Access Equality Act of 2009. Amends the Internal Revenue Code
of 1986 to provide credit against income tax for businesses furnishing broadband services to
underserved and rural areas. Introduced January 26, 2009; referred to Committee on Ways and
Means.
H.R. 760 (Eshoo). Advanced Broadband Infrastructure Bond Initiative of 2009. Amends the
Internal Revenue Code of 1986 to provide an income tax credit to holders of bonds financing new
advanced broadband infrastructure. Introduced January 28, 2009; referred to Committee on Ways
and Means and in addition to Committee on Energy and Commerce.
H.R. 2428 (Eshoo). Broadband Conduit Deployment Act of 2009. Directs the Secretary of
Transportation to require that broadband conduit be installed as part of certain highway
construction projects. Introduced May 14, 2009; referred to Committee on Transportation and
Infrastructure.
H.R. 2521 (DeLauro). National Infrastructure Development Bank Act of 2009. Establishes a
National Infrastructure Development Bank to finance infrastructure projects, including broadband
and telecommunications projects. Introduced May 20, 2009; referred to Committee on Energy
and Commerce and in addition to the Committees on Transportation and Infrastructure, and on
Financial Services.
H.R. 3101 (Markey). Twenty-first Century Communications and Video Accessibility Act of
2009. Ensures that individuals with disabilities have access to emerging Internet Protocol-based
communication and video program technologies in the 21st Century. Introduced June 26, 2009;
referred to Committee on Energy and Commerce.
H.R. 3413 (Capito). Rural Information Technology Investment Act. Authorizes the National
Telecommunications and Information Administration of the Department of Commerce to make
grants for the establishment of information technology centers in rural areas. Introduced July 30,
2009; referred to Committee on Energy and Commerce.
H.R. 3646 (Matsui). Broadband Affordability Act of 2009. Amends the Communications Act of
1934 to establish a Lifeline Assistance Program for universal broadband adoption. Introduced
September 24, 2009; referred to Committee on Energy and Commerce.
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H.R. 4545 (Murphy). Rural Broadband Initiative Act of 2010. Establishes an Office of Rural
Broadband Initiatives in the Department of Agriculture which would administer the RUS
broadband loan and grant programs, and would develop a comprehensive rural broadband
strategy. Establishes a National Rural Broadband Innovation Fund, authorized at $20 million for
each of fiscal years 2008 through 2012, that would fund experimental and pilot rural broadband
projects. Introduced January 27, 2010; referred to Committee on Agriculture and in addition to
the Committee on Energy and Commerce.
H.R. 4619 (Markey). E-Rate 2.0 Act of 2010. Amends the Communications Act of 1934 to create
a pilot program to bridge the digital divide by providing vouchers for broadband service to
eligible students, to increase access to advanced telecommunications and information services for
community colleges and head start programs, and to establish a pilot program for discounted
electronic books. Introduced February 9, 2010; referred to Committee on Energy and Commerce.
H.R. 5828 (Boucher). Universal Service Reform Act of 2010. Reforms the universal service
provisions of the Communications Act of 1934 and other purposes. Introduced July 22, 2010;
referred to the Committee on Energy and Commerce.
S. 1266 (Klobuchar). Broadband Conduit Deployment Act of 2009. Directs the Secretary of
Transportation to require that broadband conduit be installed as part of certain highway
construction projects. Introduced June 15, 2009; referred to Committee on Environment and
Public Works.
S. 1447 (Hutchison). Connecting America Act of 2009. Provides broadband Internet investment
tax credits and credits to holders of broadband bonds. Also establishes an Office of National
Broadband Strategy in the National Telecommunications and Information Administration and
provides broadband adoption incentives in telehealth and distance learning programs. Introduced
July 14, 2009; referred to Committee on Finance.
S. 2879 (Rockefeller). Broadband Opportunity and Affordability Act. Directs the FCC to conduct
a pilot program expanding the Lifeline Program to include broadband service. Also directs the
FCC to prepare a report exploring whether the Link Up program should be expanded to include
computer ownership in order to reduce the cost of initiating broadband service. Introduced
December 11, 2009; referred to Committee on Commerce, Science, and Transportation.
S. 2880 (Gillibrand). Rural Broadband Initiative Act of 2009. Establishes an Office of Rural
Broadband Initiatives in the Department of Agriculture which would administer the RUS
broadband loan and grant programs, and would develop a comprehensive rural broadband
strategy. Establishes a National Rural Broadband Innovation Fund, authorized at $20 million for
each of fiscal years 2008 through 2012, that would fund experimental and pilot rural broadband
projects. Introduced December 14, 2009; referred to Committee on Agriculture, Nutrition, and
Forestry.
S. 3110 (Klobuchar). Broadband Service Consumer Protection Act. Seeks to improve consumer
protection for purchasers of broadband services by requiring consistent use of broadband service
terminology by providers, and requiring clear and conspicuous disclosure to consumers about the
actual broadband speed that may reasonably be expected. Introduced March 15, 2010; referred to
Committee on Commerce, Science, and Transportation.
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S. 3506 (Landrieu). Small Business Broadband and Emerging Information Technology
Enhancement Act of 2010. Seeks to improve certain programs of the Small Business
Administration to better assist small business customers in accessing broadband technology.
Introduced June 17, 2010; referred to Committee on Small Business and Entrepreneurship.
S. 3606 (Kohl). Agriculture, Rural Development, Food and Drug Administration, and Related
Agencies Appropriations Act, 2011. For Rural Utilities Service, U.S. Department of Agriculture,
provides $22.3 million to support a loan level of $400 million for the broadband loan program,
and $17.97 million for broadband community connect grants. Introduced July 15, 2010; referred
to Committee on Appropriations. Reported by Committee on Appropriations July 15, 2010
(S.Rept. 111-221) and placed on Senate Legislative Calendar.
S. 3636 (Mikulski). Commerce, Justice, Science, and Related Agencies Appropriations Act,
2011. For FY2011, provides $16 million to NTIA for the administration of BTOP grants and for
the development and maintenance of the national broadband map. Introduced July 22, 2010.
Reported (S.Rept. 111-229) by Committee on Appropriations July 22, 2010, and placed on Senate
Legislative Calendar.
S. 3710 (Murray). Broadband Program Reauthorization Act of 2010. Extends authorization for
broadband stimulus programs (BTOP and BIP) at $2 billion each for FY2011 and at such sums as
may be necessary for each fiscal year thereafter. Introduced August 5, 2010; referred to
Committee on Finance.
S. 3787 (Gillibrand). Upstate Works Act. Provides tax credits to expand broadband service in
rural areas. Introduced September 15, 2010; referred to Committee on Finance.
Concluding Observations
The release of the National Broadband Plan by the FCC will likely spur considerable debate over
what actions, if any, the federal government should take in order to close the digital divide in
broadband access. As Congress considers various options for encouraging broadband deployment
and adoption, a key issue is how to strike a balance between providing federal assistance for
unserved and underserved areas where the private sector may not be providing acceptable levels
of broadband service, while at the same time minimizing any deleterious effects that government
intervention in the marketplace may have on competition and private sector investment. In
addition to loans, loan guarantees, and grants for broadband infrastructure deployment, a wide
array of policy instruments are available to policymakers, including universal service reform, tax
incentives to encourage private sector deployment, broadband bonds, demand-side incentives
(such as assistance to low income families for purchasing computers), regulatory and
deregulatory measures, and spectrum policy to spur roll-out of wireless broadband services. In
assessing federal incentives for broadband deployment, Congress will likely consider the
appropriate mix of broadband deployment incentives to create jobs in the short and long term, the
extent to which incentives should target next-generation broadband technologies, the extent to
which “underserved” areas with existing broadband providers should receive federal assistance,
and how broadband stimulus measures of the ARRA might fit into the context of overall goals for
a national broadband policy.
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Table 1. Selected Federal Domestic Assistance Programs Related to Broadband and Telecommunications Development
Funding Amount
(FY2009 unless
Program Agency
Description
otherwise noted) Web Links
Broadband Infrastructure Deployment Programs
Broadband Technology
National Telecommunications
Provides competitive grants to public and
$4.35 billion
http://www.ntia.doc.gov/
Opportunities Program
and Information
private sector entities in order to: provide
(ARRA, P.L. 111-5)
broadbandgrants/
(BTOP)
Administration, Dept. of
broadband access in unserved and
Commerce
underserved areas; provide broadband
support and services to strategic institutions;
improve broadband access by public safety
agencies; and stimulate broadband demand,
economic growth, and job creation.
Broadband Initiatives
Rural Utilities Service, U.S.
Provides competitive grants, loans, and
$2.5 billion for the
http://www.usda.gov/rus/telecom/arra-
Program (BIP)
Dept. of Agriculture
loan/grant combinations to public and private cost of loans,
broadband.htm
sector entities in order to provide broadband grants, and
access in unserved and underserved rural
loan/grant
areas.
combinations
(ARRA, P.L. 111-5)
Rural Broadband Access
Rural Utilities Service, U.S.
Provides loan and loan guarantees for
$400 million for
http://www.usda.gov/rus/telecom/
Loan and Loan Guarantee
Dept. of Agriculture
facilities and equipment providing broadband
cost of money
broadband.htm
Program
service in rural communities
loans
Community Connect
Rural Utilities Service, U.S.
Provides grants to applicants proposing to
$13.4 million
http://www.usda.gov/rus/telecom/
Broadband Grants
Dept. of Agriculture
provide broadband service on a “community-
index.htm
oriented connectivity” basis to rural
communities of under 20,000 inhabitants.
Telecommunications Infrastructure Deployment Programs
Rural Telephone Loans and Rural Utilities Service, U.S.
Provides long-term direct and guaranteed
$145 million for
http://www.usda.gov/rus/telecom/
Loan Guarantees
Dept. of Agriculture
loans to qualified organizations for the
hardship loans;
index.htm
purpose of financing the improvement,
$250 million for
CRS-19
Funding Amount
(FY2009 unless
Program Agency
Description
otherwise noted) Web Links
expansion, construction, acquisition, and
cost of money
operation of telephone lines, facilities, or
loans; and $295
systems to furnish and improve
million for FFB
telecommunications service in rural areas
Treasury loans
Distance Learning and
Rural Utilities Service, U.S.
Provides seed money to rural community
$34.7 million
http://www.usda.gov/rus/telecom/dlt/
Telemedicine Loans and
Dept. of Agriculture
facilities (e.g., schools, libraries, hospitals) for
dlt.htm
Grants
advanced telecommunications systems that
can provide health care and educational
benefits to rural areas
Universal Service High
Federal Communications
Provides funding to eligible
$4.5 billion
http://www.usac.org/hc/
Cost Program
Commission
telecommunications carriers to help pay for
(Calendar Year
telecommunications services in high-cost,
2008)
rural, and insular areas so that prices charged
to customers are reasonably comparable
across all regions of the nation.
Universal Service Schools
Federal Communications
Provides discounts for affordable
$1.8 billion
http://www.universalservice.org/sl/
and Libraries Program (i.e., Commission
telecommunications and Internet access
(Calendar Year
E-rate)
services to ensure that schools and libraries
2008)
have access to affordable telecommunications
and information services.
Universal Service Rural
Federal Communications
Provides funds to cover 85% of the cost of
$13.05 million
http://www.usac.org/rhc-pilot-program/
Health Care Pilot Program
Commission
constructing statewide or regional broadband committed for
telehealth networks and of connecting those
funding year 2008
projects to dedicated nationwide broadband
(July 1 to June 30)
telehealth networks and the public Internet.
Appalachian Area
Appalachian Regional
Project grants to support self-sustaining
$66 million
http://www.arc.gov/index.do?nodeId=21
Development Program
Commission
economic development in the region’s most
distressed counties and areas. Includes funds
for a Telecommunications Initiative involving
projects that enable communities to
capitalize on broadband access.
Delta Area Economic
Delta Regional Authority
Grants for self-sustaining economic
$9 million
http://www.dra.gov/state-grant-funding/
Development
development projects of eight states in
Mississippi Delta region.
CRS-20
Funding Amount
(FY2009 unless
Program Agency
Description
otherwise noted) Web Links
Investments for Public
Economic Development
Provides funding for construction of
$129 million
http://www.eda.gov/PDF/FY09-EDAP-
Works and Economic
Administration, Dept. of
infrastructure in areas that are not attractive
FFO-FINAL.pdf
Development Facilities
Commerce
to private investment; most funding is for
water and sewer infrastructure but some has
been designated for telecommunications and
broadband projects.
Library Services and
Institute of Museum and
Provides funds for a wide range of library
$171 million
http://www.imls.gov/programs/
Technology Act Grants to
Library Services, National
services including installation of fiber and
programs.shtm
States
Foundation on the Arts and the wireless networks that provide access to
Humanities
library resources and services.
Native American and
Institute of Museum and
Grants to support library services including
$3.7 million
http://www.imls.gov/applicants/grants/
Native Hawaiian Library
Library Services, National
electronically linking libraries to networks.
nativeAmerican.shtm
Services
Foundation on the Arts and the
Humanities
Programs Related to Applications of Broadband or Telecommunications Technology
Education Technology
Office of Elementary and
Grants to State Education Agencies for
$269 million
http://www.ed.gov/about/contacts/state/
State Grants
Secondary Education, Dept. of
development of information technology to
technology.html
Education
improve teaching and learning in schools.
Ready to Teach
Office of Assistant Secretary
Grants for a national telecommunication-
$10.7 million
http://www.ed.gov/programs/
for Educational Research and
based program to improve the teaching in
readyteach/index.html
Improvement, Dept. of
core curriculum areas.
Education
Special Education—
Office of Special Education and
Supports development and application of
$31 million
http://www.ed.gov/about/offices/list/
Technology and Media
Rehabilitative Services, Dept. of technology and education media activities for
osers/index.html?src=mr/
Services for Individuals
Education
disabled children and adults
with Disabilities
Telehealth Network
Health Resources and Services
Grants to develop sustainable telehealth
$4 million
http://www.hrsa.gov/telehealth/
Grants
Administration, Department of
programs and networks in rural and frontier
Health and Human Services
areas, and in medically unserved areas and
populations.
Telehealth Resource
Health Resources and Services
Provides grants that support establishment
$1.8 million
http://www.hrsa.gov/telehealth/
Center Grant Program
Administration, Department of
and development of telehealth resource
Health and Human Services
centers to assist health care providers in the
development of telehealth services, including
CRS-21
Funding Amount
(FY2009 unless
Program Agency
Description
otherwise noted) Web Links
decisions regarding the purchase of advanced
telecommunications services.
Licensure Portability Grant Health Resources and Services
Provides support for state professional
$0.7 million plus an
http://www.hrsa.gov/telehealth/
Program
Administration, Department of
licensing boards to develop and implement
estimated $1.5
Health and Human Services
state policies that will reduce statutory and
million under
regulatory barriers to telemedicine.
ARRA (P.L. 111-5)
Medical Library Assistance
National Library of Medicine,
Provides funds to train professional
$66 million
http://www.nlm.nih.gov/ep/
National Institutes of Health,
personnel; strengthen library and information
extramural.html
Department of Health and
services; facilitate access to and delivery of
Human Services
health science information; plan and develop
advanced information networks; support
certain kinds of biomedical publications; and
conduct research in medical informatics and
related sciences.
Smart Grid Investment
Department of Energy
Provides support for modernizing the electric $3.9 billion (ARRA,
http://www.energy.gov/news2009/
Grant Program and Smart
grid, which likely includes some broadband
P.L. 111-5)
7503.htm
Grid Demonstration
for Smart Grid.
Program
National Environmental
Environmental Protection
Provides funding to states, territories, and
$12 million
http://epa.gov/exchangenetwork/grants/
Information Exchange
Agency
federally recognized Indian Tribes to support
Network Grant Program
the development of an Environmental
Information Exchange Network, including
broadband infrastructure.
Source: Compiled by CRS based on GAO Report, Broadband Deployment Plan Should Include Performance Goals and Measures To Guide Federal Investment, May 2009, Tables 2
and 3; FCC Report, Bringing Broadband to Rural America, May 22, 2009, Appendix B; and the Catalog of Federal Domestic Assistance.
CRS-22
Broadband Internet Access and the Digital Divide: Federal Assistance Programs
Author Contact Information
Lennard G. Kruger
Specialist in Science and Technology Policy
lkruger@crs.loc.gov, 7-7070
Angele A. Gilroy
Specialist in Telecommunications Policy
agilroy@crs.loc.gov, 7-7778
Congressional Research Service
23