House Panel Okays Rural Satellite Bill

February 17, 2000

The House Agriculture Committee has approved legislation to extend loan guarantees to companies willing to provide rural communities with access to local television via satellite. The National Rural Telecommunications Cooperative calls it a "major step toward bridging the `digital divide’ looming in rural America."

"Even more than urban areas, rural communities depend on local televison," said Chairman Larry Combest (R-TX). "In addition to local news, sports and entertainment, it is often their primary lifeline for emergency information regarding weather and natural disasters. For people who work the land, this information is vital to their livelihoods. This legislation will go a long way to ensuring those communities have equal access to local television."

The bill would authorize USDA to guarantee up to $1.25 billion in loans providing local broadcast signals to rural areas. Providers also could offer other services, such as Internet access if they have excess capacity.

NRTC President and CEO Bob Phillips praised the House action but said Sen. Phil Gramm (R-TX) was drafting legislation that would create a new bureaucracy and potentially cost taxpayers money.

The House bill was a better approach, Phillips said, "in that it requires the borrowing entity to provide a `credit risk premium’ that would indemnify the federal government in the highly unlikely event of a loan default."