How tax reform can support rural broadband

[Commentary] As the House GOP released the first draft of the tax plan the week of Oct 30, rural broadband deployment, an issue that continues to receive bipartisan congressional attention, may find some helpful incentives. For telecommunications companies that are highly capital-intensive, the draft that the Senate eventually adopts could impact investments in new rural broadband facilities or the upkeep of existing network infrastructure in rural and urban areas.

Given the uncertainty of private sector investments going forward, the final tax plan must also include incentives such as corporate interest deductions that will contribute to broadband growth, especially those incentives that lower the cost of borrowing and secure financial risks. Since President Donald Trump has stated his goal of bringing high-speed broadband networks to rural communities, the pending tax reform plan should be evaluated against this and other national infrastructure projects. More industry-specific analysis should also be conducted to ensure positive business development and job growth for capital-intensive industries. Two proposals that are mentioned in the draft tax plan are corporate interest deductions and full expensing, both of which should remain of high interest to lawmakers seeking to close the rural divide. And, one should not be considered a substitute for the other, given the high capital investment needs of rural deployment.