Pai Calls on Congress to Create Gigabit Opportunity Zones

Takes page from Jack Kemp 'enterprise zones'
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FCC commissioner Ajit Pai says Congress should provide financial incentives for ISPs to deploy gigabit broadband service in low income neighborhoods, or what he tabs Gigabit Opportunity Zones, and the FCC should do more to promote broadband buildouts.

He said his proposal for the zones—outlined in a speech to start-up accelerator The Brandery in Cincinnati—would be along the lines of the late Rep. Jack Kemp's blueprint for enterprise zones, where federal and local governments worked together to improve low-income neighborhoods.

Pai said that "given how hard and expensive it is to build a network, it isn’t surprising that ISPs have an incentive to concentrate their investments in communities where they assume they’ll see the most business," but that given that fact, lower income areas, including communities of color, "get left behind."

Pai said areas with average incomes below $40,243, or 75% of the median, would qualify but only where state and local governments encouraged deployment. ISPs would get tax incentives for building out gigabit services in those zones, including being able to immediately expense all capital spending and carry over losses for up to seven years, incentivizing new players.

The federal government would also incentive start-ups by offering tax credits to offset payroll takes for any employee working in a zone.

"Gigabit Opportunity Zones would be a powerful tool for closing the digital divide that too often separates the haves from the have-nots. They would promote the spirit of entrepreneurship where it is needed the most. And they would be a major step towards empowering every American community to take control of its own destiny in the digital age," said Pai.

He also called for promoting mobile broadband by coupling buildout obligations with longer license terms and creating a new "rural dividend" by taking 10% of the proceeds from spectrum auctions and using it to support rural deployments.

Pai also put in a plug for deregulation, including streamlining state and local reviews of buildouts, lowering pole attachment costs, adopting what he called a "model broadband deployment code" for municipalities (to speed deployments by ISPs), and promoting "dig once" policies.

Pai has been highly critical of the FCC's approach to promoting broadband deployment, even agreeing with the commission's most recent Sec. 706 report finding that advanced telecom was not being deployed in a reasonable and timely manner, but putting the blame on the government, rather than private industry.

"Gigabit Opportunity Zones have considerable promise as part of the toolkit that could ensure that all Americans--­especially those who need broadband the most to lift them out of poverty-­are afforded access," said David Honig, senior advisor and president emeritus, of the Multicultural Media, Telecom and Internet Council.

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