O'Rielly Urges Setting $11 Billion USF Budget, Freeing up 200-300 MHz in 3.7-4.2 GHz Band
The FCC should set a USF budget of about $11 billion to impose fiscal discipline, Commissioner Mike O'Rielly said Thursday at the American Enterprise Institute. He said at least 200 or 300 MHz of spectrum should be made commercially available within the 3.7-4.2 GHz band, and wants an associated NPRM this summer to examine reallocating 6 GHz band spectrum for unlicensed services. He also expects the regulator to begin a rulemaking this summer on creating more flexible broadcast children's TV rules, believes the agency will soon address its process for transactions affected by "Team Telecom" reviews (see 1804190059), and wants more process reforms in general. His speech tracked written remarks and was followed by Q&A (video here). A commission spokesman declined comment.
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O'Rielly said the FCC needs an overall USF budget to force tradeoffs when the budgets of any of its four programs are increased. He said the commission has authorized about $11 billion annually for USF: $4.5 billion for high cost, $4 billion for E-rate, at least $2.25 billion for Lifeline and $400 million for rural health care. He noted it's considering seeking high-cost and rural healthcare increases, E-rate commenters also want more funding, and some of the programs are indexed for inflation.
"If the total budget cannot be increased beyond $11 billion, and I don’t think it should be, then it is time to decide how to apportion funding within the overall budget," O'Rielly said, noting the FCC has some headroom because actual annual USF distributions have been around $8.8 billion. He wants to end a seeming "informal detente" among USF stakeholders not to oppose the increases sought by members of another particular program: "It is time to institute the practice that any further increases in one program must be paired with offsets from another."
O'Rielly said freeing up more spectrum is key to winning the global 5G race (see 1804190050) against economic competitors and hostile powers: "We seek not to set industrial policy but to prevent others from doing so against our interests." With commissioners' approval Tuesday of a public notice on 24 and 28 GHz auction procedures (see 1804170036), he said, the next step is to finalize the rules and set an auction timetable for all remaining high bands, starting with 37 and 39 GHz. He said the FCC needs more robust software to handle auctions that will have more licenses, occur more frequently and even simultaneously, and be more complex: "The time to start modernizing our capabilities was yesterday."
The agency "must expedite its mid-band efforts" due to a global focus on harmonization, O'Rielly said, and he expects the agency "in the next few months" will complete a review "of the 3.5 GHz, or CBRS [citizens band radio service], priority access license structure and adopt new rules." He noted he's pushing for reallocating the 3.7-4.2 GHz band, and said a "market-based" industry proposal is "attractive" for clearing the spectrum more quickly. "To make this worthwhile, an adequate amount of spectrum -- at least 200 or 300 MHz to start -- needs to be made available in this band," he said, citing "maybe" 400 MHz during Q&A. "We also need more information about how the licensing would work. The commission needs to issue [an NPRM] this summer to explore all the relevant issues." In the same notice, he said, it "should take the next steps to reallocate the 6 GHz band for unlicensed services." Noting a recent order to ease small-cell historic-preservation and environmental reviews, he expected this summer "to see a complementary item to reduce the barriers state and localities place on such deployments."
O’Rielly expects the anticipated KidVid proceeding to kick off this summer, affirming statements made by Media Bureau Video Division Chief Barbara Kreisman at the NAB Show (see 1804090048). “We should eliminate the elements of our rules that have had unintended consequences and streamline the reporting requirements our rules currently impose,” he said, urging the FCC to focus its efforts on over-the-air only households that “truly do not have other options.” He said commenters should weigh in on the “costs and benefits” of KidVid rules, to create a “robust record.”
FCC reviews of foreign takeovers of U.S. telecom assets are too often delayed by Team Telecom (DOJ, DOD and the Department of Homeland Security) national security consideration, O'Rielly said. He said the commission should "basically copy" the process used by the broader executive branch Committee on Foreign Investment in the U.S., and believes there will be an item "in the very near future" to resolve Team Telecom participation in commission reviews. On mergers and acquisitions in general, he has fewer concerns under Chairman Ajit Pai about FCC reviews and conditions being overly broad but would like to see structural changes.
O'Rielly pressed for releasing the text of draft items on circulation, as has been done for monthly meeting items, a "resounding success" -- otherwise, "the Commission risks creating a secretive, potentially abusive path ripe for considering documents of any length and importance." Welcoming the new Office of Economics and Analytics, he noted he "secured the chairman's commitment that the Commission will move a separate rulemaking in the very near future for purposes of requiring OEA to follow the guidelines of [Office of Management and Budget] Circular A-4, which standardizes the way benefits and costs are measured and reported across executive agencies." He has "40 to 50" more process ideas he hopes to share with Pai soon.