TELECOM INFRASTRUCTURE IMPROVEMENT KEY TO BUSH'S HOMELAND SECURITY BUDGET

“The limited interoperability of emergency responders’ communications equipment, and the inherent complications for line-of-sight communications in densely built-up Manhattan” caused problems in wake of World Trade Center attacks, budget report said: “If rescue workers cannot talk to one another, they cannot do their jobs.” Some of funding would be dedicated to new Homeland Security Corps that would be coordinated by Federal Emergency Management Agency (FEMA) and new USA Freedom Corps.

Budget proposes $722 million for information-sharing improvements, specifically linking federal, state and local agencies in event of emergency. Federal govt. security and critical infrastructure protection initiatives would be unified, with “strong security a condition of funding for all federal investments in information-technology systems.” FBI would receive $186 million specifically to upgrade its “seriously deficient information technology infrastructure,” although budget acknowledged that “the FBI will continue to face information challenges beyond 2003.” FBI and Immigration & Naturalization Service would share $155 million for intelligence gathering related to terrorism, including “electronic surveillance equipment.” Overall, FBI’s appropriation would increase to $4.3 billion, up from $3.6 billion, while total funding for Justice Dept. would decrease modestly to $21.3 billion from $21.4 billion.

FCC would receive $278 million, with $248 million offset by regulatory fees for net of $30 million, up from $245 million with $27 million net in FY 2002. Budget said Bush Administration would “propose legislation to provide more certainty in upcoming auctions,” expected to generate more than $25 billion over next 5 years. Bill would “establish a framework for the FCC to develop regulations that promote clearing the spectrum” in TV Ch. 60-69 (747-762 MHz and 777- 792 MHz) for new wireless services, while shifting statutory deadlines for that auction from elapsed 2000 date to 2004. Auction of TV Ch. 52-59 (698-746 MHz) would move to 2006 from 2002. “Providing more certainty about how and when the spectrum in channels 60-69 will become available to new entrants and shifting the deadlines for both auctions would increase expected revenues by $6.7 billion,” White House estimated.

Concerned that broadcasters would be reluctant to abandon analog spectrum after 2006 conversion to digital, White House said it would propose legislation “authorizing the FCC to establish an annual lease fee totaling $500 million for the use of analog spectrum by commercial broadcasters beginning in 2007.” Any broadcaster returning analog spectrum would be free of fees, budget said.

CPB would receive $25 million for DTV conversion but no FY 2005 figure was given for agency that’s forward-funded 2 years. Administration said FCC already had been allotted $365 million for FY 2003 and $380 million for FY 2004, but said CPB should “receive appropriations like any other programs that receive federal assistance,” and FY 2005 funding should be set in FY 2005 budget. Same proposal was made last year by President Bush but Congress didn’t adopt it. “We are disappointed that for the second straight year the President has not requested advanced funding for CPB,” APTS Pres. John Lawson said: “We will ask Congress once again to continue to appropriate funds in advance for CPB.” APTS welcomed $22 million proposed for U.S. Dept. of Education’s Ready to Learn program. Public Telecom Facilities and Planning (PTFP) grant program, popular with public broadcasters, increased slightly to $43.6 million from just under $43.5 million.

Other Grant Programs Scrutinized

Telecom and broadband grant programs run by RUS (Rural Utilities Service) were criticized by White House. Some “telecommunications programs are not targeted to needier areas and even serve areas that are no longer rural.” Administration said those programs would be reviewed by Agriculture “to determine and implement methods for better targeting of these funds.” In FY 2003 budget, telecom loans at 5% interest would increase slightly to $75 million from $74.8 million, but loans at interest rates of 7% or more would decline to $1.4 million from $2 million. Loans for broadband specifically would change little, with $79.5 million available vs. $80 million, but distance learning loan funds would drop to $50 million from $300 million, due to what White House said was “low demand.”

RUS wasn’t only area where tech grants were questioned in budget. “Dollars will go to programs that work,” it said: “Those programs that don’t work will be reformed, constrained or face closure.” One to be shuttered if Bush gets his way is Technology Opportunities Program (TOP), which in passing through Congress often includes funding targets in members’ home districts. In addition, Bush proposed reducing Advanced Technology Program (ATP), another congressional favorite, as well as NTIA’s grant pool in favor of additional funding for NIST and National Science Foundation (NSF). NIST would receive $402 million, up from $321 million but NTIA would drop to $62 million from $74 million. Salaries and expenses actually would go up to $18 million from $15 million, but grant money would decline to $44 million from $59 million in FY 2002, leaving total exactly half that of NTIA’s FY 2001 grant program. Office of Technology Policy, involved with NTIA in reviewing spectrum issues among other topics, would decline slightly to $8.1 million from $8.2 million.

ATP would be reduced in FY 2003 to $108 million from $185 million in FY 2002, with only $35 million in direct awards. Budget cited General Accounting Office studies showing that ATP, created in 1988 to help U.S. companies compete with Japan and other foreign economic powers, no longer was relevant, with private venture capital soaring to $104 billion in 2000 from $6 billion in 1995: “[S]ufficient private funding is available for high-technology projects.” More of ATP’s money will go to universities and less to major corporations, the budget said. One disincentive was proposed for ATP grant recipients -- they would be required to reimburse the federal govt. up to 5 times original grant for successful projects.

Other Agencies

FTC would receive $177 million in FY 2003, up from $156 million, but that funding was expected to be offset by fees generated by agency. Among FTC’s FY 2003 priorities, the White House said, would be expansion of its do-not-call list. FTC, budget said, also would “expand its contribution to the Administration’s consumer privacy agenda by helping victims of ID theft, increasing enforcement and outreach on children’s online privacy and increasing enforcement against ’spam.'”

NASA would be asked to provide “more science at less cost” under Bush’s budget. For example, “NASA has traditionally owned and operated the satellites it needs to provide scientific data. However, with the development of commercial satellites that sell Earth images to customers, NASA will now purchase data from commercial sources,” budget said, and will share remote sensing with federal, state and local agencies. NASA will work with White House Office of Science & Technology Policy (OSTP) “to engage the scientific community and establish clear high-priority, affordable science objectives with near-term focus on improving scientific productivity.” However, budget said NASA within 2 years must demonstrate “that it has made the necessary management reforms” in areas such as international space station if it is to continue to receive funding. NASA would be funded at $15 billion, up slightly from $14.8 billion in FY 2002.

House Republican leadership promised quick action on Bush’s budget. Speaker Hastert (R-Ill.) said its homeland security focus reflected “our country’s needs and interests,” while Majority Leader Armey (R-Tex.) called it “a sound blueprint to fighting the war on terrorism, boosting the economy and securing our defenses at home.” Information Technology Assn. of America (ITAA) Pres. Harris Miller called boost in IT spending “unprecedented budget increase” that “reflects the understanding that IT has a vital role to play in securing our nation,” particularly welcoming increase “at a time of competing budget priorities.”

Budget submitted to Congress Mon. was in red by $106 billion, return to deficit spending Administration attributed directly to war on terrorism. White House projections showed deficit spending continuing until FY 2005 (during next Presidential Administration), when $61 billion surplus is expected.