GOP House Appropriators Say FCC Can’t Escape Budget Cuts

Emerson asked what the FCC would lose with a budget the same as FY 2008 levels, as proposed in the long-term FY 2011 Continuing Resolution passed by the House but stalled in the Senate. Genachowski said funding at that level would interfere with the FCC’s ability to release new spectrum, do Universal Service Fund and intercarrier compensation overhauls, Inspector General Office operations and improve technology at the FCC. Rep. Tom Graves, R-Ga., asked Genachowski to “provide us some options” to achieve FCC objectives “with 10 percent less resources, 20 percent [or] 25 percent [less]. If Genachowski doesn’t cooperate, the subcommittee would “make some of those decisions for you,” Graves said.

The FCC wants to increase staffing only at the IG office, which has a mission to eliminate waste, fraud and abuse, Genachowski said. The office has some temporary employees whose contracts will be up, and the FCC wants to keep them full-time, he said. Emerson asked why 19 people in the office need $3.2 million. “Pretty hefty salaries,” she said. But Genachowski said the money also covers investigation work. Emerson asked why the employees can’t stay temporary. Genachowski replied that he wants to ensure the agency retains its existing staff. “I don’t think you could replace the institutional memory and knowledge that they've accumulated” over the years, he said.

Rep. Jo Bonner, R-Ala., asked if cybersecurity was a redundant area for the FCC to be involved in since many other government bodies are working on the issue. Genachowski said the agency should have a role, because it takes the lead in interacting with carriers. Bonner asked if Genachowski saw any other redundant areas. The FCC chairman said the agency is consolidating multiple licensing systems and has increased efficiency at the agency by breaking down jurisdictional barriers between bureaus.

Members from both parties raised concerns about potential interference to GPS caused by the LightSquared network. The commander of U.S. Space Command testified earlier this month that he believed the network would cause interference. “I hope to impress upon you today that there is a tremendous amount of concern about what’s happening here” and “this is a very high-stakes situation,” said Rep. Kevin Yoder, R-Kan. Genachowski said he wouldn’t allow a result that harmed GPS, and the FCC is working with stakeholders to come up with an answer. The LightSquared network is important to preventing a spectrum crunch, he said.

Rep. Mario Diaz-Balart, R-Fla., asked if the FCC’s data roaming order, up for a vote next week, circumvented statutory boundaries. The FCC has “ample authority” under Title III of the Communications Act, and has been careful to ensure it’s not making common carriage rules for an information service, Genachowski said. Diaz-Balart asked if the purpose of the order was to allow small companies to take advantage of larger companies’ investments. Genachowski said the rules would help new entrants that lack national infrastructure to get started, but in the long term those companies would find it cheaper to operate on networks they build themselves. The order won’t encourage companies to complain to the FCC, because it will be cheaper for small companies to make a deal with a large company, Genachowski said.

Spectrum policies must not come at the expense of over-the-air broadcasting, said Bonner, who sent a letter about the subject to Genachowski March 21. Genachowski said moving broadcasters from current digital slots to other digital spectrum will be smoother than the transition from analog to digital.

Genachowski signaled openness to funding a public safety network with revenue from voluntary incentive auctions. In the National Broadband Plan, the FCC proposed funding the network with revenue from a D-block auction. Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., has legislation to give the D-block to public safety and use incentive auction revenue to fund the network. Estimated revenue from incentive auctions between $20 billion and $30 billion “would be more than enough” for the public safety network, Genachowski said.

Genachowski declined to answer questions by Graves on the FCC’s investigation into whether Google breached customers’ privacy by harvesting their data. But Genachowski said the FCC takes all claims of privacy violations seriously. Graves urged Genachowski to “move swiftly” on the agency’s investigation.

The FCC should review “the general treatment” of PEG channels, said Ranking Member Jose Serrano, D-N.Y. Serrano said cable companies have been hiding the channels by giving them high numbers or forcing consumers to open menus on their TV to access them. In the last year, the FCC resolved about half of PEG complaints to the satisfaction of the PEG channel, Genachowski said. The chairman hopes those resolutions will guide resolution of open disputes, he said.

Several Republicans complained about too many regulations at the FCC. The commission’s rules, especially net neutrality, have hurt the economy and created uncertainty in the private sector, Emerson said. Bonner asked Genachowski to send him the total number of words of all new regulations since his chairmanship began. The FCC seems to be “addicted to government, addicted to power,” said Diaz-Balart.

The FCC’s FY 2012 budget request “maintains essential services, focuses on critical upgrades, and provides the level of knowledge and experience in its employees that the American people demand of expert agencies,” Genachowski said in written testimony. The FCC has made “significant progress” with “limited resources,” Genachowski said. The FCC is at a ten-year low for staffing levels, he said. “The FCC’s staff has worked hard to develop lean and flexible mechanisms and methodologies that make use of the resources that we already have first -- before considering alternatives that might require additional financial resources."

"We cannot be complacent in our work or we will suffer the consequences of this inaction,” Genachowski said. Nearly 100 million Americans, or one-third of the population, have not adopted broadband, he said. In South Korea, only 10 percent have not subscribed, he said.