Senate Appropriators Turn to 'Bread-and-Butter' FCC Issues

“Right now we still haven’t gotten our [Financial Services Subcommittee] allocation,” Boozman said of the next steps in FCC appropriations. “So that’s the first step, to know what kind of money we've got to work with as a subcommittee. … I think once we get our allocation, knowing what kind of money we’re going to have, I think there’s a commitment to get forward and again try to get these things done by October.” He judged the hearing a good one: “It was interesting that all the senators have concerns about rural America and the importance of connectivity and hopefully we’re going to push really hard to make sure all of America is represented in that regard.”

Wheeler said he's on track to deliver a stand-alone mechanism of support for broadband by the end of the year. “I don’t change one comma in the commitment that we will have this done this year,” Wheeler said, describing the meetings that three of five commission offices recently had with rate-of-return carriers on a new model. The challenge involves “puts and takes for individual companies” that some want, he said. “We’ve made good progress” and there will likely be a new model “that we will release and propose shortly,” Wheeler told lawmakers.

“And shortly is like next month or two?” Boozman pressed Wheeler. “I think it’s by football season,” Wheeler said.

Bipartisan groups of lawmakers in both chambers sent Wheeler letters pressing for such a stand-alone fund. The letters earned praise from NTCA, which has lobbied Hill offices to get this support. Senate Commerce Committee Chairman John Thune, R-S.D., and Sen. Amy Klobuchar, D-Minn., led one letter Monday, signed by 61 senators -- more than the 44 senators who sent one last Congress -- and Rep. Kevin Cramer, R-N.D., led a House letter Tuesday signed by 115 members, more than a similar House letter with 89 signatories last Congress.

“The need is acute, and we need to get this done,” Pai said during the appropriations hearing of stand-alone broadband support. “These carriers are in a Hobson’s choice.” He said companies risk offering broadband without support or risk losing customers. Pai alluded to much progress and general agreement on USF overhaul, including in areas that will help allow for standalone broadband support. “Those green shoots will hopefully blossom over the next couple of months,” Pai said.

Senators paid "more significant attention" to "issues other than net neutrality," a key takeaway for Sen. Jerry Moran, R-Kan., he told us after the hearing. “I think there’s a lot of interest in the day-to-day bread-and-butter issues of the FCC in addition to net neutrality, and you saw attention being paid actually to the spending of money. Do they need a new building or the money for pursuing fraud should come from universal service fund or outside? So I thought it was a useful hearing and it was good to see the chairman and the commissioner, while they had some disagreements over policy issues, there were a number of areas in which they were aligned.”

Moran has been the subcommittee’s top Republican in the past and is also a member of the Commerce Committee. He didn't ask Wheeler or Pai about net neutrality, instead focusing on USF, call completion problems and the broadcast TV incentive auction. “I’ve had major broadcast CEOs in my office say they’re seriously looking” at participating, Wheeler told Moran. Wheeler committed to continuing to overhaul USF rules, blasting the now-abandoned quantile regression analysis as “ridiculous” and now “gone” under his chairmanship. “I agree that it doesn’t make much sense to have the linkage between narrowband and broadband,” Wheeler added of USF support, noting his agreement with Pai.

Wheeler also told Moran that a spectrum issue with the Mexican government may be on the verge of resolution, citing “ongoing" negotiations. “There can be rolling approvals, if you will,” Wheeler said. “I think we have crested the hill, sir.”

Subcommittee ranking member Chris Coons, D-Del., the one Democrat present, asked Wheeler about the FCC’s needs and inquired about its progress with E-rate overhaul and other proceedings such as positive train control. Wheeler assured him of great progress. Coons also asked about the FCC's need for IT overhaul, prompting Wheeler to mention the many data sets across 207 different platforms “that don’t speak to each other. The maintenance of those alone is an expensive proposition.” Coons had guessed last week that net neutrality would be the hearing's dominant topic.

Boozman and Sen. James Lankford, R-Okla., pressed the commissioners about net neutrality. But Boozman has coordinated with Commerce Committee leadership, and Thune told us last week that he wants the appropriators to defer to Commerce on the issue due to his own legislative hopes (see 1505050040">1505050040). “We’re working with Senator Thune, Senator [Bill] Nelson, [D-Fla.], to see if they can get some sort of agreement, so we’re working with the authorizers, not only in that area but a number of other areas to try to see what we need to do,” Boozman told us Tuesday. Wheeler reaffirmed that he has no desire to engage in rate regulation of broadband and told Lankford he has no problem if Congress wants to legislatively prevent the FCC from doing so.

“We’ll talk about it now, post-hearing, establish where that goes,” Lankford told us after the hearing of whether net neutrality may become wrapped up in the appropriations process. “It is odd to me that this is debated in the Congress and the FCC just moved forward and created a rule that, as I mentioned today, seems to be a round peg in a square hole, with all the exemptions, everything they’ve built into it, to say, all these areas won’t apply. That’s got to be part of the law.” Lankford dismissed the preference from some Senate Republicans for a Congressional Review Act resolution of disapproval: "The president likes the rule, so that’s not going to go anywhere."

Lankford also asked about Lifeline, as he anticipated last week. Wheeler said the FCC will suss out “those issues and many others” in an NPRM issued “in the next couple months." “That is specifically one of the questions that we are going to ask,” Wheeler said of providing phones. “I’ve heard arguments on both sides. What we’re going to do is tee up in the NPRM this specific discussion” and “tease out” the debate.

“What impact will those closings have on the FCC’s ability to address interference concerns?” Boozman asked of the FCC’s proposal to close 16 of 24 field offices. “It will improve our abilities,” Wheeler said, stressing the financial necessity as well as wisdom of revisiting the idea of field offices.