Divisive House FCC Funding Bill Clears Committee Despite Democratic Protests

“I thought it went well,” Appropriations Financial Services Subcommittee Chairman Ander Crenshaw, R-Fla., who wrote the bill, told us. “We spent a lot of time taking recorded votes. Four minutes a pop, and times 15 that’s about an hour’s worth.”

Crenshaw said the FCC funding bill’s floor consideration may depend on GOP leadership’s move to limit controversial amendment floor debate, an ongoing issue this week. “They’re going to do leg[islative] branch today, which is always modified,” Crenshaw said in the interview, on the timeline for advancing the bill to the floor. “Next week the plan is to do defense. And I think this whole issue of whether it’s open or not, I think that’ll probably affect down the line, you’ve got to take it one step at a time. So it’ll be interesting, after we know what happens next week, if it is either modified or closed, see how that plays with the other side, that might impact what we do next step. But I think there’s a real commitment to get our bill to the floor. There’s a lot of good things that people like to talk about.”

Two Commerce Committee Democrats lauded appropriators for including the set-top box rider, which would mandate the FCC pause the proceeding pending further study. “The FCC’s proposed rule has the potential to detrimentally impact consumer privacy, creative rights, diversity of voices, cybersecurity, energy efficiency and the consumer experience,” said Reps. Yvette Clarke, D-N.Y., and Gene Green, D-Texas, in a joint statement. “This is why we, along with 175 Members of Congress, have raised these concerns. In April, 53 House Democrats joined our letter to the FCC, calling for the Commission to push the ‘pause button’ on its proceeding while these serious concerns are thoroughly examined in a peer reviewed report. … Given the breadth of opposition and the likely harm that would result to consumers, Congress is right to insist that the FCC suspend its artificial timetable and conduct an independent review that will fully examine the potential unintended consequences that would likely result from the Chairman’s proposal.”

Appropriations Committee ranking member Nita Lowey, D-N.Y., and Financial Services Subcommittee ranking member Jose Serrano, D-N.Y., objected to the anti-net neutrality riders, which would affect FCC action on data caps and broadband rate regulation. Their efforts to amend the bill were defeated. Serrano hadn't expected to change the bill at full committee markup but told us he expects changes in Senate negotiation (see 1605250059).

The latest bill text still includes the broadcaster joint sales agreement provision, which protects JSAs during any transaction review process. It refers to the FCC’s 2014 regulations, which no longer apply due to the 3rd Circuit Court of Appeals' recently remanding those to the FCC. The court ruling was believed to have possible influence on what the rider would be, if it remained part of the funding bill (see 1605260056).

Auction Concerns

Appropriators unveiled the 140-page committee report on the bill, with sections on telecom policy. “The Committee has purposefully kept funding for the FCC flat since fiscal year 2012 to keep the agency focused on mission-critical work,” the GOP report said, and would allocate $314.84 million, tens of millions of dollars less than it received in FY 2016. “Instead, the FCC has prioritized politically polarizing rulemakings at the expense of the important work the Commission has to do.”

The report addressed the FCC’s ongoing broadcast TV incentive auction. “The Committee is aware of concerns about the length of time and funds available to broadcasters to repack stations at the conclusion of the incentive auction” and “intends to monitor this issue closely,” it said. “Broadcasters and those purchasing spectrum must participate in good faith for the incentive auction to be successful. The Committee supports the Commission’s administration of these auctions and expects the FCC to take into careful consideration any participating entity’s concerns.” The committee “believes greater [auction] budget transparency is still needed in order to better understand how the use of these funds fits into the Commission’s overall budget request” and “directs the FCC to continue to include a detailed justification in its annual budget submission and to make the detailed report on the use of auction funds publically available on the Commission’s website,” it said.

The vacant channel proceeding has appropriators “concerned,” they said. “The broadcast spectrum the Commission is considering for unlicensed could otherwise meet demand for LPTV [low-power TV] and translator licenses in the post-auction broadcast band,” the report said. “While the Committee recognizes the value of unlicensed spectrum to our national information economy, LPTV and translators also serve an important role in serving rural and underserved television viewing audiences. Given the uncertainty LPTV and translator licensees face at the end of the incentive auction, the FCC should not pursue additional unlicensed spectrum in the broadcast band at the expense of LPTV and translator licensees until the incentive auction is complete, so that it can accurately assess the need for spectrum to serve communities with LPTV stations and translators.”

Enforcement, USF

The appropriations report criticized FCC enforcement. “If the Commission finds evidence of wrongdoing, the Committee expects the Commission to collect fines in a timely manner,” it said. “Beginning not later than 90 days after enactment of this Act, the FCC shall submit quarterly reports” to Congress “on the status of its efforts on tracking and collecting monetary penalties assessed by the agency,” which must “include a list of all Notices of Apparent Liability (NALs) pending, including the date it was issued; all NALs released, including the date of release; all forfeiture orders pending, including the date it was issued; all forfeiture orders released, including date of release and date upon which payment is due; all timely paid forfeiture orders; all forfeiture orders referred to the Department of Justice for collection, including date of referral; all consent decrees, including date adopted; and all consent decrees that have resulting in a payment, including date of payment,” the report said. “For each of the items listed above, the Commission shall provide the date on which the U.S. Government will no longer be able to effectively prosecute the alleged violation as a result of the statute of limitations.”

Appropriators worry the recent Telephone Consumer Protection Act order “will make it more difficult for financial institutions to contact their members about identity theft or data breaches,” the report said. “The Committee strongly encourages the FCC to revisit the Order and address technical questions that have been raised that may be impossible for a financial institution to resolve, such as whether or not the consumer will be charged for such texts or calls by their plan provider, or if they will count against their plan limits. The Committee also believes that the FCC should provide more flexibility to the prescriptive requirements for financial institutions using this exemption, especially because this exemption was meant to apply in exigent circumstances to protect consumers.”

Other provisions addressed USF and urged the FCC “to be sure the [rate floor] methodology is more reflective of the effective value of local voice telephony service to a given customer in high-cost rural areas (including the number of other customers that can be reached via a local call) and that ultimately sets the ‘rate floor’ at a range below the national average of local urban rates plus state regulated fees for such service that better reflects reasonable comparability of local voice telephony rates as required by law.” It’s “imperative that the Federal State Joint Board on Universal Service identify and provide Universal Service Fund (USF) contributions reform recommendations to the FCC,” recommendations that “expressly recognize that continuing to base contributions only on legacy telecommunications services revenues (and a limited number of other service revenues) will undermine, and ultimately threaten universal access to advanced communications by eroding the sustainability of the USF program and placing unfair and inequitable burdens for support of the program on a small subset of communications network users,” appropriators said. They want a report within 90 days of enactment on call completion efforts.