FCC AND NTIA GET SPENDING INCREASES IN WHITE HOUSE BUDGET

The FCC was allocated $292.9 million in the proposed 2005 budget, an increase of nearly $20 million from 2004. The recently passed omnibus appropriations bill funded the FCC at about $272 million for 2004. Last year, President Bush proposed a $281 million budget for the FCC. The new budget also predicted less revenue for the Universal Service Fund (USF). Whereas $6.58 billion in receipts were predicted for 2004, and $5.74 billion was received in 2003, the 2005 budget foresees $6.5 billion in revenue. The FCC’s budget requests an increase of $91 million to run the spectrum auction program. After spending $97 million in 2003, Congress limited the Commission to $85 million in 2004 for that work.

The budget didn’t include major new programs or proposals for the FCC. As in the past, it proposed an annual $500 million lease fee for all broadcast analog spectrum that wasn’t vacated by 2007. The NAB has opposed that proposed fee, designed to pressure broadcasters to clear the spectrum. The Administration also said it would propose legislation to extend indefinitely the FCC’s auction authority, also proposed last year.

However, Bush did propose new spending for NTIA. The Commerce Dept. agency would receive $22 million, an increase of more than $7 million, with the new money going for spectrum management and new telecom research projects. NTIA would receive $3.1 million to improve spectrum management, including: (1) $1 million for an incentive program. (2) $1 million to create a paperless system for spectrum management. (3) $400,000 for international spectrum management. (4) $746,000 for interference determination. Telecom research projects would receive $4 million in additional funding, including: (1) $2 million for interference temperature and radio noise studies. (2) $2 million for upgrades to NTIA’s Boulder, Colo., facility.

Bush proposed eliminating the Public Telecom Facilities, Planning & Construction fund. After spending $26 million last year to help build out DTV broadcast facilities for public TV, the new budget allocated only $3 million this year -- all toward management of existing grants and administrative costs. The budget proposed that a portion of the Corp. for Public Bcstg. (CPB) budget go for DTV conversion. The Administration proposed eliminating the Technologies Opportunities Program (TOP), a $16 million program in 2004.

The Commerce Dept.’s Technology Administration (TA) would get a boost over last year to about $8 million for salaries and related expenses, up from $6.4 million in the 2004 omnibus appropriations bill. TA received $10 million in 2003. In House and Senate appropriations proceedings last year, the TA saw its funding completely cut before it was restored later in the process. There was no mention in the budget of the Commerce Dept.’s proposal to move NTIA under TA authority. That proposal has been greeted with skepticism by some members of Congress.

The Administration also proposed ending the forward- funding strategy for the CPB. The $390 million in appropriations for CPB for 2005 were adopted in 2003. For 2006, the Administration proposed $400 million. But the White House won’t propose a spending request for the 2007 fiscal year until the 2007 budget. The Administration said $20 million would be available in the CPB budget to help with the DTV transition and up to $75 million for upgrades in the public TV interconnection system.

The budget calls for $495 million in direct telecom loans in FY 2005 to distribute broadband to rural areas through the Dept. of Agriculture’s RUS. The loans would hook up more than 300,000 customers, the budget says. However, the Office of Management & Budget (OMB) made clear some program changes would be made, based on skepticism that loans were going to the most qualified providers, and to ensure they were time-limited. OMB called on RUS to review its “first in, first out” system for making telecom loans to determine whether “it allows for adequate support for areas with the highest priority needs.” The budget said legislation would be introduced to: (1) Require recertification of rural telecom providers on the first loan request after FY 2005 and for the first loan request after each census. (2) End loans more than 10 years old. There also is $25 million for grants to provide distance learning.