Washington, DC -- Senator Hillary Rodham Clinton today announced that she has introduced “The Rural Broadband Initiative Act of 2006.” The legislation creates a policy and action framework to ensure that the federal government employs an effective and comprehensive strategy to deploy broadband service and access in the rural areas of the United States.

“Many rural areas of New York and other states across the country still don’t have access to broadband. It is critical that the 25 percent of Americans who live in the rural areas of the United States are not left behind in this increasingly information and technology driven economy,” Senator Clinton said. “We need to do more to increase access to broadband. The United States currently ranks 16th in the world in broadband deployment and rural communities simply can’t continue to wait until rural broadband development becomes as economically viable as it is in our cities and suburbs. The Rural Broadband Initiative Act recognizes the special economic needs of rural communities and ensures that the government plays a helpful role in furthering economic development by increasing broadband connectivity in rural areas.”

First outlined in a major speech given in Upstate New York that highlighted needed efforts for rural communities, Senator Clinton’s bill would establish an Office of Rural Broadband Initiatives at the Department of Agriculture and create an Undersecretary for Rural Broadband to be charged with coordinating several rural broadband grant and loan programs aimed at encouraging broadband infrastructure investment in underserved rural areas. Among the programs that would fall under the new Office’s jurisdiction is the Rural Broadband Access and Loan Guarantee program, which has been criticized for being too cumbersome and having qualification criteria too stringent to benefit the small, innovative telecommunications companies willing to invest in rural areas. This bill would require the Undersecretary to streamline and improve the program to ensure that loans and grants are being made to telecommunications companies with sound business plans. Moreover, the Undersecretary would be charged with developing a comprehensive rural broadband strategy to facilitate broadband access in rural areas as quickly as possible.

Also, the bill would establish a Rural Broadband Innovation Fund that would invest in experimental and cutting edge applications that can deliver broadband service to rural areas including satellite, fiber, WiFi, and broadband over power lines (BPL). Finally the bill would establish a Rural Broadband Advisory Panel that would include members of both the public and private sector to discuss issues relating to broadband deployment and offer advice and guidance to the Undersecretary in developing a comprehensive rural broadband strategy.

Broadband deployment has traditionally lagged in rural areas due to geography, population and lack of a viable market for large telecommunications companies. The Government Accountability Office has indicated that while about 30% of households in urban and suburban areas have access to broadband, only 17% of rural households have access.

The legislation builds on Senator Clinton’s longstanding commitment to fostering broadband access in rural areas. She, along with Congressman John McHugh (NY-23), has urged the Rural Utilities Service Administrator to make improvements to the Rural Broadband Access and Loan Guarantee Program that has been slow in processing loans to companies willing to invest in broadband infrastructure in rural areas. They also urged that the RUS address the program’s rigid qualification criteria which are too strict to allow small, upstart telecom companies from participating in the program.

In addition to urging greater private investment in rural broadband deployment, Senator Clinton has cosponsored legislation that would provide telecom companies that build and invest in broadband networks in rural, underserved areas tax incentives to encourage more investments. This Congress, she has cosponsored S. 1147, a bill to amend the Internal Revenue Code of 1986 to provide for the expensing of broadband Internet access expenditures, and for other purposes, sponsored by Senator John D. Rockefeller (D-WV), which allows companies that build broadband networks in rural areas to deduct the costs of their investment.

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