Over the summer, Congress seriously considered some questionable bills that ACT |The App Association members opposed, prompting us to ask our members, “What should Congress be doing instead with the precious few legislative days remaining in 2022?” Just before members of the House and Senate reconvened for the remainder of the 117th Congress, 27 of our member companies sent a letter outlining their top priorities for the remainder of the year. In our “Member Priorities” blog series, we’ll expand on the seven issue areas they outlined and shed some light on how Congress can best take advantage of these opportunities.

You might think Congress’ broadband work is done for a while after passing the landmark Investment in Infrastructure and Jobs Act (IIJA), which allocated a whopping $65 billion toward deployment of new infrastructure and access programs. Not so fast. Here’s what lawmakers can do before the end of the year:

  • Extend Bonus Depreciation. Bonus what? Sounds like an arcane tax provision. Yes. But it also has major implications for investment in broadband infrastructure. The tax treatment of physical capital heavily impacts any industry that invests huge amounts in it every year—and broadband is one of the leaders in that department, having invested $86 billion in capital expenditures in 2021 alone. Under current federal tax law, companies can deduct 100 percent of the cost of physical capital like broadband infrastructure the first year they invest in it. In other words, they pay taxes on a wide range of other activities, but the amount they spend on infrastructure is not treated as taxable the year the investment is made. This treatment of physical capital is consistent with the IIJA’s purpose of supporting and encouraging the expeditious deployment of physical broadband infrastructure to reach the millions of Americans who currently lack access to affordable connectivity. It makes little sense to drive billions of taxpayer dollars into the deployment of broadband networks, only to increase those deployment costs with punitive tax treatment. Unfortunately, the bonus depreciation provision is set to expire at the end of this year, so we urge Congress to take the opportunity this fall to extend the bonus depreciation treatment of capital expenditures in order to optimize broadband deployment so our member companies can reach their clients and customers.
  • Extend the Affordable Connectivity Program (ACP). Since 1985, the federal government has subsidized low-income adoption of phone service—and later, broadband services—through the Lifeline program. Lifeline supports low-income broadband adoption by providing a discount for qualifying consumers’ monthly broadband bills. Line items (charges) on landline telephone subscribers’ phone bills—instead of federal taxes—fund both Lifeline and the High-Cost Fund, which supports rural and other high-cost deployment efforts. With IIJA, Congress introduced ACP and allocated $14.2 billion in taxpayer dollars for it to eclipse the Lifeline program with a legal framework that fits modern needs and is a better complement to IIJA’s other programs. Internet service providers (ISPs) handle much of the administrative aspects of Lifeline, so subscribers are often reluctant to switch ISPs while benefiting from the up-to-$9.25-per-month discount under the program. ACP, on the other hand, is essentially a $30 monthly voucher that qualifying consumers control and can apply to the ISP of their choice. On top of the monthly benefit, ACP also provides $100 toward a device, which addresses an aspect of access that Lifeline—and other federal programs—have been unable to reach. App Association members are problem solvers that just so happen to use internet connectivity and digital platforms to make their contributions. Expanding connectivity to those who need the help expands the app economy and our members’ potential. We urge Congress to extend the successful ACP in a manner that is sustainable and continues to ensure all Americans have the opportunity to connect.

The App Association’s members are strong advocates for public policy that enables and supports faster, more reliable broadband. They make the software and devices that leverage connectivity to enable any of the expanding set of digital capabilities from remote work and educational opportunities to digital health and smart agriculture. This fall, Congress has a role to play in supporting our member companies and businesses like them by maintaining or adjusting policies that encourage broadband infrastructure deployment and efforts to bring connectivity and connected devices to all Americans.