Introduced by Senator Shelley Moore Capito (R–W.Va.) yesterday, the Gigabit Opportunity Act, also known as the GO Act, aims to spur gigabit broadband deployment by using a range of tax breaks. In a statement, Capito said the GO Act “gives states flexibility, streamlines existing regulations and eliminates barriers to investment so we can better connect our low-income and rural communities.”
The act calls for state governors to establish Gigabit Opportunity Zones that would be eligible for tax breaks including enabling companies to immediately expense the cost of gigabit-capable equipment and temporarily deferring capital gains for broadband investments and upgrades. It also directs the FCC to release a framework that encourages states, counties and cities to voluntarily adopt streamlined broadband laws, with which Gigabit Opportunity Zones would have to comply.
If this sounds familiar, that’s because the Gigabit Opportunity Act is based, in part, on a Gigabit Opportunity Zone proposal made by FCC Chairman Ajit Pai last year prior to his chairmanship. Not surprisingly, Pai issued a statement yesterday in support of the proposed legislation.
The Gigabit Opportunity Act, he said, is “an important step toward closing the digital divide.” He added that “[w]ith targeted tax incentives and regulatory streamlining, the GO Act aims to remove the major barriers holding back internet access in economically challenged areas.”
Some stakeholders argue, however, that while removing regulatory barriers and providing tax incentives can help spur broadband deployment, they are not a complete solution. The concern is that some areas are so costly to serve that tax breaks and fewer regulatory barriers are not sufficient incentives to spur innovation. And while the Universal Service Fund high-cost program provides subsidies for high-cost areas, supporters of that program have expressed concern that funding levels are insufficient to achieve the deployment of nationwide broadband service at reasonable prices.
Gigabit Opportunity Act
The Gigabit Opportunity Act also calls for:
- State governors would nominate census tracts for designation as qualified gigabit opportunity zones.
- Governors should strive to designate zones that are geographically concentrated and contiguous, that face obstacles to economic deployment, are currently the focus of economic development initiatives, and are poised for economic growth requiring access to high-speed broadband.
- The number of population census tracts in a state that may be designated may not exceed 25 or 25% of the number of low-income communities in the state, whichever is higher.
- Gigabit opportunity zones would have to adopt laws which are in conformance with the Uniform Model Broadband Deployment Act, which the FCC would be required to publish within one year after enactment of the Gigabit Opportunity Act.