Washington -- The Senate Banking Committee improved
cable's access to funding in a bill that would provide $1.25 billion in loan
guarantees to entities providing local TV signals in underserved areas.
The bill -- adopted last Wednesday by a 19-0 vote, despite
some remaining differences among lawmakers -- includes new wording designed to make it
easier for rural cable operators to apply for loan guarantees.
Under old wording, the bill all but guaranteed that the
loan backing would go to satellite carriers, despite assurances from lawmakers that the
bill would be neutral in terms of technology.
Committee chairman Sen. Phil Gramm (R-Texas) obtained a
unanimous vote despite reservations by some committee Democrats.
Sen. Tim Johnson (R-S.D.) said he was disappointed that the
bill would only guarantee loans made by federally insured institutions.
"This would effectively eliminate rural electric
co-ops from participation in the program," Johnson said, adding that he hoped
to address the issue on the Senate floor.
Two weeks ago, Johnson strongly criticized the bill (S.
2097) as too favorable to the cable industry.
"I believe this bill will primarily serve cable
companies and other established entities. I have concern that it won't bring service
to rural America, but rather, that it will help to expand the monopoly of the
nation's cable companies," Johnson said in a Feb. 25 statement.
The bill is scheduled to reach the Senate floor before
April 1 under an agreement reached in November by Senate leaders. The House is working
under a similar deadline.
Various amendments could emerge on the Senate floor. A
spokesman for Sen. Max Baucus (R-Mont.) said the lawmaker supports loan guarantees for
satellite carriers, but not for cable operators. He also wants the total amount of a loan
to be guaranteed.
In an important change, Gramm agreed to raise the loan
amount that the federal government would back from 70 percent to 80 percent.
"To get a bipartisan consensus, we had to go to 80
[percent]. I knew when we started that we were going to end up at 80. I was just deciding
when to give it," Gramm said after the vote.
The 80 percent decision will likely increase taxpayer
exposure to loan defaults. In testimony last month, the Congressional Budget Office said a
House bill last year that provided 100 percent coverage would cost $350 million.
Gramm said he was hopeful that the CBO would produce a much
lower cost estimate than $350 million.
"If we don't have a system that protects the
taxpayer in the end, we don't achieve our goal," Gramm said. "I hope [the
CBO] will score the bill as substantially reducing the cost as compared to the original