Tax committee gives initial nod to rural broadband bill
BOISE — The House tax committee on Friday gave introductory approval to a cable telecommunications industry-backed measure that would provide state income tax credits to individuals and small businesses to help build broadband services.
Backers of the bill said it was designed to help bring cable infrastructure and wireless technologies to rural, un-served broadband areas in Idaho.
Co-sponsored by Rep. George Eskridge, R-Dover, the legislation would extend a maximum $10,000 income tax credit to individuals over a five-year span and a $50,000 credit at the most — also spread out over five years — to small businesses. The income tax credit would be retroactive to Jan. 1.
If the bill becomes law, it means that an estimated $7.1 million over five years wouldn’t go to state coffers, but instead into broadband service construction for things such as computers and cable television.
The legislation defines “Un-served areas,” as those places where at least 90 percent, “of qualified broadband consumer-taxpayers lack access to wireline-based or terrestrial wire-less-based broadband service.”
Although Bonner County isn’t listed as an “un-served county,” Eskridge said he has heard from some District 1 constituents that broadband service is lacking in some places.
As an example, Eskridge mentioned a friend who has satellite service only.
“And, that’s not enough capacity to get him what he needs,” Eskridge said during an interview. “He can’t download a movie or a instruction manual, or anything, because he doesn’t have the speed. He’s six miles away from Dover, where we’ve got cable service.” Also, broadband service is non-existent in some areas outside Bonners Ferry.
Eskridge during Friday morning testimony in the House Revenue and Taxation Committee compared the current situation to the early days of rural electrification efforts — when the U.S. government in the 1930s created the Rural Electrification Administration.
“And, as a result of that expanding electric service into the rural areas, the economy of our rural areas, the agriculture industry and others was just enhanced immeasurably,” Eskridge said. “It increased the economic vitality of our state. And, I see the same thing, kind of a correlation with broadband.”
“The more we can expand broadband, the better we are,” he said.
Broadband service in the legislation is defined as: “Wireline or wireless terrestrial internet access service with transmission speeds that are equal to or greater than combined advertised download speeds of at least four megabits per second (mbps) and upload speeds of at least one mbps over the broadband provider’s network.”
Ron Williams, a lobbyist for the Idaho Cable Telecommunications Association, listed 13 counties “unserved,” by broadband computer technology services. Those counties: Nez Perce, Clearwater, Idaho, Valley, Adams, Clark, Boise, Elmore, Owyhee, Lemhi, Jefferson, Butte, Bear Lake.
Eskridge reported a $500 contribution from the Idaho Cable Telecommunications Association in a required 2012 campaign finance disclosure to the Idaho secretary of state.
Williams said construction costs for cable companies are roughly $25,000 to $35,000 per mile. “And, consequently, they historically look to needing to be able to reach, not to have, but be able to touch, about 35 customers per mile of construction. The broadband company would make 100 percent of the investment, the customers would make none of it.”
“On the other hand, if you go two miles, and only have 35 customers . . . and the construction cost was $25,000 a mile, you have $50,000 in construction costs, the 35 customers would come together to do that and pay half of that. And the broadband provider is going to pay half of that.”