White House Presses for More FCC Funding, Spectrum Provisions in Budget Proposal

Capitol Hill Republicans were dubious about the overall multitrillion-dollar proposal and will embark on their own appropriations proposals in the coming months. “For all intents and purposes, as is usually the case, the [administration] budget when it got up here was dead on arrival,” Senate Commerce Committee Chairman John Thune, R-S.D., told reporters. He called the proposal “pretty much the same thing we’ve seen for the last seven years.” GOP leaders have insisted they can finally usher through appropriations measures by regular order this year rather than continuing resolutions and omnibus packages.

The administration proposes a modest increase in FY 2017 FCC funding to $341.42 million plus $16.87 million dedicated to the HQ changes. In the FY 2016 omnibus text enacted in December, the FCC received $340 million, consistent with the frozen levels of years past, in addition to $44.17 million for the office relocation or restacking (see 1512160061). Current government funding runs out Sept. 30. The White House FCC funding proposal, as expected (see 1602050051), was in a document posted to the Government Publishing Office’s beta website. “The 2017 Budget also includes a $9.5 million transfer from the Universal Service Fund to provide robust oversight of universal service programs, including targeted investments that will identify and reduce improper payments while combating fraud, waste, and abuse,” the administration said. “Funding for the Inspector General is $11.8 million.”

The FY 2017 proposal also called for potential spectrum auctioning, which some viewed as a welcome inclusion. “The Budget proposes that the FCC either auction or use fee authority to assign spectrum frequencies between 1675-1680 megahertz for flexible use by 2020, subject to sharing arrangements with Federal weather satellites,” the administration said in a document on the budget offsets. “NOAA would establish limited protection zones for the remaining weather satellite downlinks and develop alternative data broadcast systems for users of its data products. Without this proposal, these frequencies are unlikely to be auctioned and repurposed to commercial use. The proposal is expected to raise $300 million in receipts over 10 years.” The National Oceanic and Atmospheric Administration started transitioning out of the relevant bands in the AWS-3 relocation process this year, the administration said.

"We are pleased the Administration continues to support commercialization of the 1675-1680 MHz band via auction or fee,” a LightSquared spokeswoman told us in a statement. “Because the budget proposes the frequencies be put into service by 2020, we look forward to participating in the process over the coming months in anticipation of a FY 2017 auction.”

“The FCC would be allowed to assign licenses for certain satellite services that are predominantly domestic through competitive bidding, as had been done before a 2005 court decision called the practice into question on technical grounds,” the administration said. “The proposal is expected to raise $50 million from 2017–2026. These receipts would be deposited in the general fund for deficit reduction.”

The White House offered a bigger bump for the FTC, proposing an increase of more than $35 million to $342 million. “The Budget proposes to increase the Hart-Scott-Rodino fees and index them for the percentage annual change in the gross national product,” the administration said of the FTC proposal. “The fee proposal would also create a new merger fee category for mergers valued at over $1 billion. Under the proposal, the fee increase would take effect in 2018.”

The budget also called for spectrum license user fees, a frequently raised idea in these budgets derided by wireless and broadband industry officials and ignored by appropriators. “Fee collections are estimated to begin in 2017 and total $4.8 billion through 2026,” the administration said. CTIA Vice President Jot Carpenter repeated the association's past objections Tuesday: “Fees would be a tax that will depress auction revenues, harm investment and do nothing to free up additional bands of spectrum or advance consumers' adoption of wireless broadband services.”

NTIA would receive substantially more funding. The White House wants NTIA to receive $50.84 million in FY 2017, up from the $39.5 million this fiscal year. “During FY 2017, NTIA will continue to evaluate options for repurposing spectrum for broadband use, in support of the President's goal of making 500 MHz of spectrum available for wireless broadband use by 2020,” the White House said, laying out three resulting goals for NTIA, which “(1) continues to provide spectrum assignment and analysis support to Federal agencies; (2) completes the administration of the Broadband Technology Opportunities Program (BTOP), a series of broadband grants awarded under the American Recovery and Reinvestment Act of 2009, and ensures appropriate close-out and recovery of unused funds; and (3) supports NTIA's new responsibilities under the Spectrum Pipeline Act of 2015 to help identify additional federal spectrum to be shared or reallocated for commercial use.” NTIA would continue administering BroadbandUSA.

The Association of Public Television Stations lauded the $445 million in funding for the CPB. “The President included $50 million in his budget for FY 2017 to support public television’s new interconnection system -- the backbone of both our education and public safety missions, enabling the efficient distribution of educational programming to everyone, everywhere, every day, for free, and ensuring the reliability of public television’s national emergency alert system through which the President of the United States can communicate with the public in times of crisis,” APTS CEO Patrick Butler said in a statement.