Congress Should Include Broadband in Economic Stimulus

As talk of a possible recession grows, so too does consider­ation of a second economic fiscal stimulus package. Rather than craft a conventional spending-oriented stimulus pack­age focused solely on tax cuts for individuals and spending increases, Congress should craft a stimulus package of which at least a portion not only gives a quick shot in the arm to the economy but at the same time also boosts investments that spur productivity growth and in­novation, especially in information and communication technology, which has been the engine of U.S. economic growth for the past de­cade.

The Information Technology and Innovation Foundation recently called on Congress to include a program to help low income families purchase a computer and afford broadband in 2009. There is increasing evidence that having an Internet-connected computer at home increases education per­formance. Yet, as of 2007 approximately one quarter of American households with children under the age of 18 did not have an Internet-connected computer at home. And for children living in households with incomes less than $30,000, 49 percent did not own a computer in their homes. Moreover, not having a computer at home is one of the major factors limiting broadband take up in the United States and is a reason why the United States ranks just 15th in broadband adoption of the 30 OECD nations.

To spur broadband deployment and computer adop­tion among families with children, ITIF proposed that Congress should allocate $735 million to help 1.5 million low income households afford to purchase a computer and get subsidized broadband service for one year. This pro­gram could be administered by the Universal Service Administrative Company (USAC), which currently is charged with administrating the subsidy program to help low income individuals and families afford the price of telephone installation and monthly charges. Currently, it provides a subsidy of 50 percent of the cost of installing a phone and about the same rate of subsidy for basic monthly telephone service. To qualify for the broadband program, individuals would have to qualify for the Lifeline/Linkup program and have at least one child under the age of 18 living at home. As with the Lifeline/Linkup program, broadband service provid­ers would be the ones to directly relate to consumers, and would submit reimbursements to the USAC for half the costs of the computers they sell to customers and monthly broadband services for one year. In this case, the money would be first-come, first-serve. In addition, groups such as ConnectedNation and One Economy that work to bring digital opportunity to dis­advantaged communities and individuals could market the program to individuals that they work with.

Posted by:
Robert D. Atkinson
President, Information Technology and Innovation Foundation
Chair, APT Public Policy Committee