Moran: Reconciliation Likely 'Only Possibility' for Broadband Grant Tax Exemption
Senate Commerce Committee member Sen. Jerry Moran, R-Kan., said Tuesday that he is pushing for his Broadband Grant Tax Treatment Act (S-838) to be part of an upcoming GOP-led budget reconciliation package. He and other lawmakers at Incompas' Policy Summit were divided along party lines over a push within the Commerce Department and Congress to revamp NTIA’s $42.5 billion BEAD program. Meanwhile, Moran appeared to lean in favor of repurposing some federally controlled spectrum even as he emphasized that lawmakers must “straddle” the interests of the wireless industry and U.S. military as they negotiate the matter as part of reconciliation (see 2502190068).
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Moran said “reconciliation is probably the only possibility” for moving S-838, given that the forthcoming legislative package aims to extend tax cuts enacted during the first Trump administration. S-838 and House companion HR-1705 would amend the Internal Revenue Code to allow broadband grants enacted via the Infrastructure Investment and Jobs Act and American Rescue Plan Act to not count as gross income (see 2503050073). Incompas CEO Chip Pickering said he and other group members plan to lobby lawmakers in support of HR-1705/S-838.
HR-1705/S-838’s passage “needs to happen” as part of reconciliation, Moran said. “This one ought to be an easy one if you thought that members of Congress had any common sense." The exemption, which he estimated would cost a “few hundred million dollars,” represents “a modest amount of money” that will ensure broadband spending is “efficient and effective,” he said: Every “dime that we appropriate, every dime that's part of the grant program, ought to go to … make sure you all have the opportunity to fully provide broadband services to people across the country.” Congress’ Joint Committee on Taxation estimated last year that the tax exemption’s enactment would cost $578 million.
The position that Trump administration officials at DOD and other agencies take on repurposing federal spectrum “will be important” in shaping the outcome of spectrum legislative talks, said Moran, a member of the Senate Appropriations Defense Subcommittee. But “while we need to make certain that our defense agencies have access to the spectrum they need, our country's economic” and “national security posture is determined by the capability of using that spectrum in the economy generally and in technology in particular.” No spectrum issues “are easy,” he said.
House Communications Subcommittee ranking member Doris Matsui, D-Calif., repeated her concerns about Republicans turning in a highly partisan direction on spectrum legislation (see 2501230064). “I'm concerned about talk about including” spectrum language in a reconciliation package because Republicans want to use license sales proceeds to pay for “partisan priorities rather than investing in collaborative cross-party solutions” like the Spectrum Auction Reauthorization Act that the House Commerce Committee pursued in the last Congress (see 2305240069), she said: “I fear this approach will undermine the bipartisanship on spectrum policy that we’ve maintained as long as I've been in Congress.”
BEAD
Matsui likewise raised concerns about Republicans’ interest in a major BEAD revamp, including Commerce Secretary Howard Lutnick’s planned review of the program (see 2503050067). “I’m alarmed that is motivated by Republican desires to water down or outright eliminate protections for affordability, good-paying jobs and weather-resistant networks,” she said. Republicans have criticized multiple BEAD requirements that NTIA included in its notice of funding opportunity as contrary to legislative language in the 2021 Infrastructure Investment and Jobs Act. “These changes can result in years of delay, and that's absolutely unacceptable,” Matsui said.
House Commerce Committee Vice Chairman John Joyce, R-Pa., emphasized that he doesn’t have an “appetite” to claw back BEAD funding “at this point.” He and other Republicans instead want to “roll back the overregulation” of the funding’s rollout that happened during the Biden administration via legislation like the Streamlining Program Efficiency and Expanding Deployment (Speed) for BEAD Act (HR-1870), which House Communications Chairman Richard Hudson of North Carolina and other GOP lawmakers bowed last week. HR-1870 would eliminate many of the rules in the notice of funding opportunity that Republicans objected to, including “diversity, equity, and inclusion,” labor, climate change and data cap ban requirements.
Moran, who chairs the Senate Appropriations Commerce, Justice, Science and Related Agencies Subcommittee, noted that he will continue to press Lutnick to reverse what he called NTIA’s “failure” to expeditiously distribute BEAD money. “I think we're in a different environment than the last administration” with Lutnick running Commerce, Moran said.
House Commerce member Marc Veasey, D-Texas, emphasized that lawmakers must “look for different ways that we can speed up [BEAD’s rollout], and then to continue to make it more efficient.” He noted that Texas stands to receive $3.3 billion in BEAD funding, the largest pot of any state or other jurisdiction. Texas Comptroller Glenn Hegar recently wrote Senate Commerce Chairman Ted Cruz, R-Texas, that the state may return nearly $1 billion of its BEAD funding.