NCTA Hails Farm Bill's RUS Loan Reforms

5/15/2008 9:45 AM Eastern

Washington—The cable industry's main trade association hailed congressional passage Thursday of a massive farm bill that would reduce the flow of broadband subsidies into rural markets where the technology already exists.

"The 2008 Farm Bill represents a strong step in ensuring that government broadband deployment programs give the highest priority to areas that do not yet have access to broadband service," said Kyle McSlarrow, president of the National Cable & Telecommunications Association.

The $290 billion bill passed the House and Senate by comfortable margins, but President Bush has threatened to veto it, claiming it would unfairly reward wealthy farmers at a time of rising food prices.

In recent years, the cable industry has complained that the U.S. Department of Agriculture's Rural Utilities Service has been subsidizing broadband network construction in markets already served by cable incumbents, ignoring the intent of Congress to assist broadband deployment in unserved areas.

"This legislation sharpens the focus of the RUS's Broadband Loan Program by limiting loans in areas where competition already exists, and targeting loans to areas without widespread access to broadband service," McSlarrow said.

In general, the bill would tighten the definition of a rural area and tie loan eligibility to the percentage of homes with access to just a single broadband provider.

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