FCC Seeks Increased Money for DTV Education, USF Audits

The president’s budget earned low marks on Capitol Hill, where Democrats criticized it as fiscally irresponsible and insensitive to families’ needs. As usual, the president’s budget is likely to be quickly forgotten when Congress begins work on spending bills, Hill officials’ statements indicated. But the FCC, which makes money for the government, doesn’t provoke as much controversy as bigger departments and agencies, so its budget numbers may not change much.

As in past years, the president proposed cutting in half the budget for the Corporation for Public Broadcasting, suggesting slicing $200 million from the $400 million appropriated. The budget request also proposes cutting $220 million from the $420 million that Congress appropriated for fiscal 2010. “This is the eighth year in a row that this President has tried to gut Public Broadcasting, and this will be the eighth year in a row that we will have to persuade Congress to ignore his cuts,” said John Lawson, president of the Association of Public Television Stations.

Condemning the attack on CPB’s budget as “ill-advised,” House Commerce Committee Chairman John Dingell, D-Mich., said he expected Congress to block the funding cut. Dingell also expressed unhappiness with the $20 million for DTV education, which he said is “far too little to educate a nation of 300 million people… If we are truly concerned about the safety and security of our nation, we should not be attempting this transition on the cheap.”

The cuts would hurt all CPB programs, starting with the station Community Service Grants, Lawson said. The president’s budget also calls for no CPB advance appropriation for fiscal 2011, and no additional funding for fiscal 2009 for Public broadcasting’s digital conversion and facilities upgrades. Advance funding, a longstanding practice, allows stations to plan programming to maximize funding efforts.

“While we are acutely aware of the difficult budgetary choices facing the federal government, the cuts proposed in the budget for public broadcasting are draconian,” said CPB President Patricia Harrison. Harrison said CPB will send Congress its request for a $485 million advance appropriation for 2011 this week, as well as funding for digital conversion, radio interconnection and a Ready to Learn program for 2009.

The digital transition remains an important item in the federal budget. NTIA is seeking $471 million for its digital-to-analog converter box program in fiscal 2009, up from an estimated $428 million in 2008 and $87 million spent last year, budget documents show. A low power TV upgrade program would get $60 million in fiscal 2009, up from $2 million in 2008. Meanwhile, funding for a low-power TV conversion program would drop to $1 million from $8 million.

The budget also includes a proposed repeal of the federal excise tax on communications services, a proposal that prompted a statement of support from USTelecom President Walter McCormick. “While the IRS no longer enforces the tax on long distance or bundled services, consumers who subscribe to standalone local service are still penalized by this regressive, outdated tax,” he said. “There is strong bipartisan support for repealing the federal excise tax on communications and we strongly urge Congress to end the tax this year.” The IRS stopped enforcing the toll portion of the tax in 2006, but the rest still applies to customers who subscribe to local phone service by itself.

The FCC budget seeks $2.8 million for technology efforts, including replacing licensing systems for parts of the communications industry. Several are “nearly the end of their useful life,” according to the FCC budget document, which cited the Wireless Bureau’s Universal Licensing System as an example of a soon-to-be-outdated technology. Replacement of the systems should save $2.2 million to $4 million in annual expenses, the budget document said, while enabling the commission to process 1.7 million additional transactions yearly.

The commission’s Office of Inspector General, which oversees USF audits, is requesting an additional $1.9 million in fiscal 2009 for staff, so it can increase monitoring of waste, fraud and abuse. The office would use about $310,000 of the money to upgrade tools and equipment used in conducting audits. The FCC is requesting a 3 percent pay raise for its employees in 2009, totaling $4.7 million, effective January 2009. The agency’s budget request also includes $1.9 million to pay for a 3.49 percent pay raise for 2008 that was to become effective in January. In addition, the budget seeks $1.2 million for office equipment and office space rentals.

The administration proposes to extend indefinitely the FCC’s authority to auction spectrum licenses, which expires Sept. 30, 2011. It also proposes giving the FCC new authority for spectrum management such as user fees, which the agency could impose on unauctioned spectrum licenses. The fees would be phased in as part of an ongoing rulemaking process to determine the appropriation fee level. Fee collections are expected to begin this year and raise an estimated $4.1 billion through 2018.

Legislation also is proposed to improve management of hybrid terrestrial-satellite mobile communications spectrum licenses by setting a fee on the terrestrial authority of the networks. The licenses are free now. Setting a fee “will help ensure that the radio spectrum is put to its most highly valued use,” the budget said. Receipts resulting from this policy are estimated to begin in 2008 and total $1.16 billion through 2018.

The administration proposes legislation to ensure that spectrum licenses for predominantly domestic satellite services are assigned through competitive bidding. “By clarifying through legislation that auctions of licenses for these domestic satellite services are authorized, prior policy of the FCC will be restored,” budget documents said. Auction receipts resulting from the policy are expected to begin in 2008 and total $593 million through 2018. The budget proposes elimination of the Telecommunications Development Fund, created in 1996 to promote access to capital for small business. The organization “has had no material impact in meeting its statutory goals,” budget documents said.