A significant piece of legislation that is part of President Obama’s stimulus package could open parts of the U.S. to new high-speed Internet services – giving local economies a boost. If so, we’ve identified one company that investors should consider buying in anticipation of a key piece of legislation that was passed last week.

High-speed Internet can exert a profound impact on how local businesses and consumers improve their own personal productivity and expand their entertainment venues. Our thinking here is very much along the lines of our “Cell Phone Indicator” that we use in emerging markets – improved communications boost the local economy.

The House Energy and Commerce Committee approved $6 billion in rules for billions in government funds to spur high-speed Internet networks in unserved and underserved areas.

The Internet funding portion of the stimulus bill — a potential huge boon to phone, cable, and wireless companies – helps fulfill President Obama’s campaign promise to make high-speed communications ubiquitous in America. The $6 billion is widely considered a first step in a program that could last several years.

The grants will be issued by the Commerce Department and the U.S. Department of Agriculture. Lawmakers and trade groups are arguing over some language ambiguity regarding spending, but that is not expected to become a major impediment to the roll out of these new services.

Once the new high-speed infrastructure is in place, customers can expect to have access to services that many Americans currently enjoy such as streaming video, teleconferencing, mobile Internet and effective e-commerce.

Even more important, a reliable and fast Internet infrastructure is perhaps the number-one motivator for larger corporations to relocate into these regions that can provider low-cost, high-quality labor forces. Coupled with tax incentives, rural Internet can substantially boost local economies – and the fortunes of independent telephone companies that can deliver bundled communications services.

How big is this rural Internet market? A 2007 survey by the Pew Internet and American Life Project concluded that only 38% of rural residents have a broadband Internet connection. In the cities and suburbs, the penetration rate is 55%.

The new bill also allocates $1 billion solely for wireless carriers to bolster their infrastructure for mobile cell phone and laptop connections.

While major players such as Verizon, AT&T, Comcast and others will profit from this new cash infusion, we believe local services stand to gain as well. One in particular that we identified is CenturyTel, Inc. (NYSE: CTL), in Monroe, Louisiana.

Currently trading at slightly over $27.00, CTL is in the low end of its 52-week range of 20.45 – 40.35.

In the third quarter ending September 30, 2008, CTL reported revenues of $650,000, down 8.2% from the same period the year before. Its net income plunged 23.5% to $82,760.

So why do you we believe CTL merits your attention? Because CTL added 20,600 high-speed Internet customers during Q3 – representing a 2.5% revenue contribution from Q3 in 2007 for similar services.

One troubling piece of data about CTL is its recent acquisition of local telco, Embarq Corp. in Overland Park, Kansas. As part of the deal, CenturyTel will assume $5.8 billion in debt as part of the all-stock merger.

Still, what remains to be seen is how much Embarq’s territory could benefit from the $6-billion dole out.

We suggest you keep an eye on CTL as the money pours forth from Washington. Local economies, and their telephone companies, could stand to benefit mightily from an upgraded digital network.

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