Agencies Prepare for Possible Government Shutdown

FCC staff have held at least two high-level meetings to prep for a potential shutdown, including a meeting of senior legal advisers in Chairman Julius Genachowski’s office, agency officials said. A shutdown would mean almost all commission staff would have to stay home and not work, with the exception of those involved in essential activities like public safety, FCC officials said they were told at the Monday meeting. Commissioners are considered essential and would be able to go to work, but their personal staff couldn’t. FCC officials on travel during a shutdown, including commissioners, are supposed to suspend travel and return home as soon as possible, agency officials were told. An FCC official said many staffers at the commission’s Public Safety and Homeland Security bureau will be able to work through a shutdown, in case of network collapse or other emergencies. A commission spokesman declined to comment.

The House plans on Tuesday to debate a short-term Continuing Resolution that includes $4 billion in budget cuts and would keep the government running until March 18. Senate Majority Leader Harry Reid, D-Nev., had proposed a 30-day extension that would maintain current funding levels. A Reid spokesman said Friday that Democrats were “encouraged” by the new GOP proposal. Both sides are “highly motivated” to pass a short-term extension and avoid a government shutdown, and it shouldn’t be difficult for the House and Senate to compromise on a short extension by Friday, said Lisa Sutherland, a lobbyist with Creative Government.

"By selecting cuts in the House-passed CR that the president also endorsed in his FY 2012 budget, House and Senate leaders have effectively taken a shutdown off the table,” said another lobbyist. “We'll see what happens before the next deadline.” Sutherland predicted that appropriators will aim to finish the long-term CR in a month. Congress could do 100 short-term CRs if it wants, but lawmakers “start looking ridiculous” after a long enough stalemate, she said.

A lengthy shutdown could disrupt payments to broadband stimulus grantees and loan recipients, a government official said. The loans and grants are drawn out as projects are built out and the spring construction season is about to kick off, the official said. Unlike the Universal Service Administrative Co. -- a nonprofit that can therefore continue to disburse Universal Service Fund and E-rate checks -- the RUS and NTIA are subject to congressional rules on appropriations and would have to go black if the government were shut down. Unlike the last round of shutdowns in late 1995, it’s illegal to have officials “volunteer” for work during a shutdown, two government officials said. It’s considered an offense to bring a work laptop home, or even to answer a BlackBerry, they said.

A government shutdown “could have a disastrous impact on licensees whose licenses are expiring after 11:59 p.m. on March 4,” said communications lawyer Donald Evans of Fletcher Heald on the law firm’s blog. Broadcast licenses, in general, expire Oct. 1, he noted. “If the government is not back in operation by then, we will all have much bigger problems than license renewal to worry about.” The bottom line, Evans wrote, is “licensees with license expiration dates coming up in the next month or two would be well advised to get their renewal applications in BEFORE March 4 to avoid the possibility of losing their operating authority for the duration."

CenturyLink’s proposed acquisition of Qwest may well suffer from a government shutdown (CD Feb 28 p4). The companies have set April 1 as a target date for approval. Officials from each company declined to comment for this story.

Reed Hundt was chairman of the FCC when the government shut down in late 1995. He said it interfered with preparations to implement the 1996 Telecom Act. “That ended up greatly, greatly increasing the pressure on us,” Hundt said. John Nakahata, now a telecom lawyer with Wiltshire & Grannis, was Hundt’s legal adviser. The 1995 shutdown disrupted review of the CBS-Westinghouse merger, Nakahata said: “Staff couldn’t even meet to talk about things.”

If a shutdown comes, Hundt said he hopes Congress will at least authorize the FCC to continue its work on auctions. He hopes above all that a shutdown can be avoided. “The second thing I'd say is this kind of closure, however fiercely people believe in their cause, really hurts America’s cause in the world,” Hundt said. “It convinces people that we're dysfunctional.” In 1995, a group of Indonesian telecom regulators came for a scheduled FCC meeting. They discovered that the elevators weren’t working because of the shutdown and had to walk to the eighth floor, “huffing and puffing,” Hundt said. “You have to find some way to explain this to other countries,” he said. “It’s inexplicable."

A shutdown would have a major effect on the FCC, said Jeff Silva, analyst at Medley Global Advisors. While a shutdown might be averted this week, “there’s no guarantee this high-stakes political game of chicken will not again materialize after a possible stopgap funding measure expires in mid-March,” he said. “A shutdown probably would not have a significant impact on policymaking, but the potential seriousness regarding oft-overlooked FCC safety-of-life-associated responsibilities -- especially if a natural or man-made disaster occurred during a shutdown -- cannot be overstated.”

The public won’t suffer if the FCC is shut down for a short period, said Free State Foundation President Randolph May. “With the shutdowns, the agencies are always allowed to make sure that personnel needed for critical operations are at work,” he said. “For the FCC, for example, personnel who are needed to ensure the continuity of emergency and safety communications would continue their assigned tasks.”