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Cable Fears Ease as Senators Aim Broadband Subsidies to Unserved

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(Bloomberg) -- Negotiators of the Senate infrastructure bill have agreed to focus its broadband subsidies on areas lacking basic internet, easing concerns of cable providers such as Comcast Corp. and Charter Communications Inc. that they’d face widespread taxpayer-funded competition by faster services.

The agreement was reached by senators working on the $579 billion tax-and-spending package, said a congressional aide who spoke on condition of anonymity because there hasn’t been a formal announcement.

“There were a lot of white knuckles and sleepless nights by cable CEOs worrying about federal funds being used for overbuilding,” or building new networks where service already exists, said Craig Moffett, an analyst at MoffettNathanson LLC. “This looks to put that to rest.”

Republicans this week blocked debate on the bipartisan infrastructure plan, rejecting Majority Leader Chuck Schumer’s drive to forge ahead while negotiators from both parties struggle to complete details of the package. Another vote is possible next week as talks on the details continue.

The White House initially sought $100 billion to spread broadband to all U.S. households, a figure that was later pared to $65 billion. Earlier proposals called for subsidies flowing to areas lacking the fastest speeds --- a cohort that includes an estimated two-thirds of U.S. households. They include many with cable service that relies on copper lines rather than faster fiber optic.

The group of about a dozen senators decided that funding should go first to areas that lack service of 25 megabits per second for downloads, and 3 megabits per second for uploads, said the congressional aide. Those speeds meet the current U.S. benchmark for broadband.

Under the draft Senate agreement, subsidies could go to areas where service exceeds the 25/3 benchmark after unserved areas are funded, said the official.

NCTA - The Internet & Television Association, in a statement Thursday called on Congress “to keep laser focused on building networks in communities that currently do not have broadband” or won’t get service under existing rural funding initiatives.

“Any infrastructure funding that is siphoned away from the effort to bring broadband to communities that do not have it will stall our efforts to reach the goal of 100% broadband connectivity in America,” said Brian Dietz, a spokesman for NCTA. The group’s members include leading U.S. provider Comcast and No. 2 Charter.

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