Crenshaw Doesn't Expect To Give FCC the Funding Wheeler Wants

Congress, in recess for Memorial Day this week, will have to advance a Financial Services appropriations bill that includes an FCC budget in the weeks and months ahead. FCC Chairman Tom Wheeler has testified on the agency's pressing need for more funds, in appearances before Crenshaw’s subcommittee and more recently the Senate Appropriations Financial Services Subcommittee, emphasizing the money required for a headquarters move and IT upgrades. Wheeler also plans to close 16 of 24 Enforcement Bureau field offices to save money and increase efficiency. Capitol Hill Republicans say they want to conduct the appropriations process by regular order, with 12 appropriations bills, rather than resorting to continuing resolutions for funding. Crenshaw’s subcommittee would have to mark up a Financial Services bill first, which would then need to be cleared by the full Appropriations Committee and then the House.

Crenshaw didn’t rule out addressing net neutrality through the appropriations process, as Commissioner Ajit Pai has requested, but also didn’t express any immediate enthusiasm for the prospect. “I think there’s a lawsuit going on now, right?” Crenshaw said. “That keeps everything up in the air.” In the Senate, Commerce Committee Chairman John Thune, R-S.D., is pressing appropriators to avoid addressing net neutrality as a way to buy negotiating time for his own net neutrality legislative hopes (see 1505050040).

“It’s very important to ensure the FCC has the funds it needs to operate adequately and protect net neutrality, and I completely support Chairman’s Wheeler request to increase funding for this key agency,” said House Financial Services Subcommittee ranking member Jose Serrano, D-N.Y., in a statement. “I will continue fighting to ensure the FCC has as much funding as possible as negotiations unfold. Having said that, we have to take in consideration the fact that there is overall insufficient funding for discretionary spending, specifically for the Financial Services Subcommittee (Republicans propose cutting $1.3 billion relative to last year), which makes it much more difficult to adequately address the needs of all the agencies under its jurisdiction.”

Rep. Mike Quigley, D-Ill., another subcommittee member, "supports the president's budget request and would have concerns if Republicans tried to address net neutrality in the appropriations process," his spokeswoman said.

Addressing net neutrality through appropriations would send “the wrong message,” cautioned Public Knowledge Vice President-Government Affairs Chris Lewis. He backs the FCC net neutrality order as is but said the introduction of net neutrality legislation, as Thune and House Commerce Republicans have said they may do, is “more in line with Congress’s role” on the issue. Lewis was heartened that Crenshaw may be waiting for the litigation to unfold. He judged the appropriations battlefield overall as “tough” given the congressional focus on smaller budgets and sequestration, contrasted against the revenue the FCC brings in from spectrum auctions and enforcement actions. When considering commission advocacy for a higher budget this year, following years of no increases, “it sounded like they were just trying to maintain their ability to do work,” Lewis said.

Republicans leading the House and Senate Commerce committees have said they want to formally reauthorize the FCC this year for the first time since 1990. Earlier this year, House Communications Subcommittee Chairman Greg Walden, R-Ore., circulated a controversial draft reauthorization bill that would have largely frozen the commission budget at $340 million for FY 2016-2020, not counting the authorization of money for spectrum auction expenses at the current level through FY 2022, and make other tweaks to FCC operations, such as capping the USF.

“We may get back to that [draft reauthorization bill] at some point, but we’re working through this [FCC process overhaul legislation] right now,” Walden told us recently. The House appropriators aren't obliged to follow this guidance from Commerce but generally pay attention, a GOP Commerce Committee aide said, saying the relationship between the authorizing committee of Commerce and Appropriations is not an “if/then” dynamic. The aide affirmed that the House Republicans see engaging in reauthorization as a valuable way to express frustrations and raise concerns, such as about fiscal discipline or the independence of the FCC inspector general.

Walden “keeps me abreast of what he’s doing,” Crenshaw said. “We talk from time to time. But we really haven’t started to focus on funding. … We have to pass an appropriations bill every year. Of course, you don’t always have to pass an authorizing bill.” Once the appropriations process moves forward in June, “there’ll be a lot of focus, I think, when we get to that point,” Crenshaw predicted.

Walden also recently identified concerns about the potential FCC expansion of the Lifeline program, a concern not included in the earlier reauthorization bill. “You can’t have a blank check,” Walden remarked. “That’s something we’ve to keep an eye on. I think we have to be cognizant this is still ratepayer money. This is still taxpayer/ratepayer money. I think it’s important for us to do some oversight in that area, to look at how it’s being spent, who’s getting it, what are the controls. We’ve seen a program that had some serious faults in it, that frankly I commend this FCC for reining some of that in. Have they gone far enough? I don’t know. That’s what we’ve got to look at. And are we also spending money where we don’t need to? There are issues in all of that.” The Senate Communications Subcommittee plans a hearing on Lifeline Tuesday. Wheeler has teed up a vote on Lifeline reform for the June commissioner meeting (see 1505280037).

The Appropriations committees in the Senate and House have determined how much money will go to Financial Services appropriations for FY 2016, the source of funding for the FCC and FTC. Democrats in both chambers have blasted the overall allocations as draconian and far too low. Like Crenshaw, Senate Financial Services Subcommittee Chairman John Boozman, R-Ark., has cautioned that there may not be much spare money for the FCC in FY 2016.

The agency is “fee-funded, so the allocation is going to be less,” Crenshaw said of FCC appropriations. “We just kind of take a look, make sure they have the right priorities.” During his subcommittee hearing, Crenshaw told Wheeler that lawmakers were in recent years intentionally keeping FCC funding low in hopes they'd do less.