Bonds, Broadband Bonds

February 4 was the deadline for written public input on the Infrastructure Investment and Jobs Act broadband programs that the National Telecommunications and Information Administration (NTIA) will administer. Much attention is rightly being paid to the many billions of dollars NTIA will distribute to states in the coming months to ensure broadband networks reach everyone in America. However, there's been less attention given to a provision in the new law creating a new vehicle for broadband deployment: private activity bonds. State and local governments issue debt for most large public capital projects such as new schools, public buildings, and roads. On occasion, state and local governments will issue debt for projects whose purpose is less public in nature, such as privately owned and operated multifamily residential housing. Nevertheless, these projects are often afforded the same tax privilege as debt issued for strictly government-owned and -operated projects. Congress limits the use of tax-exempt bonds for private activities because of concern about the overuse of tax-exempt, private activity bonds. The Infrastructure Investment and Jobs Act amends the Internal Revenue Code of 1986. (See, now I have your attention.)  Specifically, the Infrastructure Investment and Jobs Act amends Section 14(a) of the Internal Revenue Code of 1986, creating a new category of "exempt facility bond": "qualified broadband projects."

[Kevin Taglang is Executive Editor at the Benton Institute for Broadband & Society.]