Budget Would Double FCC Inspector Gen. Office

Democrats gave the budget mixed reviews. Sen. Majority Leader Reid (D-Nev.) and House Speaker Pelosi (D-Cal) condemned the effort. Reid said it uses “deception to hide a massive increase in debt;” Pelosi said it would take the U.S. in the wrong direction. House Majority Leader Hoyer (D- Md.) said the budget “seemed to have finally heeded Democrats’ repeated calls to dispense with the gimmickry that characterized every one of its past budgets.”

The FCC Office of Inspector Gen. (IG) nearly would double in size in FY2008 under the proposed $313 million budget for the agency. The FCC wants to swell the IG staff ranks to 39, from 20 in FY 2007 and 12 in FY2006. The budget would put $1 million more into IG audits. “These funds will enable the Commission to fight waste, fraud and abuse in the Universal Service Fund,” an FCC document said: “OIG investigations and audits of the Universal Service Administration Company (USAC) are performed to detect instances of waste, fraud, abuse and mismanagement that may exist within USAC and/or its contractors.”

“The IG has testified many times about the need to provide more resources for enforcement,” National Education Assn. lobbyist Kim Anderson said: “Enforcement of the rules is how you protect the program.” USAC needs more resources, too, she said: “They could do more outreach to applicants and provide greater levels of assistance to applicants about the rules and about how to properly apply for funds.”

“Maybe they're finally heeding these calls that we need to look at all of USF fraud and not just E-rate fraud,” a telecom lobbyist who follows USF said: “There has been absolutely nothing done on the high cost find, which is the largest part of USF.” High cost support, the largest USF program, provides $4 billion plus to 1,700 carriers nationwide.

The administration believes $1.5 billion can be added to the treasury the next 10 years by auctioning the ancillary terrestrial component of MSS. “The use of auctions to assign the land-based component for any future satellite licenses of these hybrid networks will help to ensure that the radio spectrum is assigned efficiently and effectively,” the budget document said.

The Administration proposes an auction of new licenses for MSS, calculating that another $690 million would be raised by selling satellite licenses through it. Congress has had to authorize auctions for satellite licensing since a 2005 court decision “questioned this practice on technical grounds,” the budget said. A Senate Commerce Committee source said the Democrats likely won’t pursue either MSS proposal.

An extra $1.5 million would go to the FCC Consumer & Governmental Affairs Bureau for DTV outreach. “The purpose of the FCC’s DTV outreach initiative is to prepare the public for the transition from analog to digital in concert with stakeholders that include the NTIA, broadcasters and cable operators,” the FCC said: “The FCC will help to ensure a smooth transition to digital television through a coordinated consumer education and advocacy campaign.”

The FCC wants $1 million for 12 mobile digital direction finding (MDDF) vehicles the Enforcement Bureau would dispatch to respond to reports of harmful interference to public safety communications systems. The aging FCC vehicle fleet is dense with outdated interference gear; 28 vehicles - 36% of the MDDF fleet -- are more than 7 years old and 11 (15% of the fleet) are more than 10 years old, the FCC said.

On the staffing side, the FCC budget document said that in FY2007 100 staffers were assigned to the new Public Safety Bureau, a number that would remain the same in 2008. The Enforcement Bureau staff shrank - from 327 the previous year to 300 in FY 2007, a number that would stay the same in 2008. The Wireless Bureau also shrank, with some licensing functions shifting to Public Safety. Wireless is now 257, down from 274 the previous year. For the most part, the Public Safety Bureau’s creation contributed to overall growth in FCC staff, from 1,816 in FY 2006, to 1,900 this year, growing 19 more in FY 2008.

Non-defense homeland security spending would rise 9.5% govt.-wide over last year, excluding 2007 emergency funding and borrowing authority for interoperability grants. The budget provides $2 billion in first responder preparedness grants, plus $1 billion already authorized through the Dept. of Commerce. Under the President’s proposed budget, the FCC share of homeland security funding is $3.6 million for FY08, compared with $2.7 million enacted in the FY2007 continuing resolution. The Dept. of Commerce in consultation with DHS will award $1 billion more in grants for first responder communications interoperability to qualified applicants from anticipated spectrum auction receipts.

The budget demands repeal of all taxes on communications services, a gesture USTelecom Pres. Walter McCormick lauded: “Consumers who subscribe to stand alone local service should be relieved of this arbitrary tax.” The IRS no longer enforces the tax on long distance or bundled services, he said.

For the 7th straight year, President Bush proposed no forward funding for the CPB, which is funded 2 years in advance. The budget rescinds $50 million from $400 million appropriated to the CPB for 2008, making no additional funding for public broadcasters’ digital conversion and upgrades to public radio’s satellite system. CPB can use existing funds to pay for both, it said. It proposes $24 million for Ready to Learn. The proposals amount to a 25% drop in funding from CPB’s 2007 levels, the CPB said.

Saying the proposals resembled what Bush proposed last year, CPB Pres. Patricia Harrison told stations in an e-mail “they represent only the beginning of a long appropriations process in which Congress will consider the needs of public broadcasters.” She said public broadcasters were encouraged by House action last week on the continuing resolution to provide advance appropriation for 2009, plus more funding for digital conversion and TV interconnection for 2007. The CPB will send its request for funding to Congress this week, she added. APTS Pres. John Lawson voiced disappointment at the budget allocation. Public broadcasters will urge Congress to keep supporting “valuable” public broadcasting programs, he added.