The FCC’s budget for salaries and expenses would be cut 8.2 percent, equal to roughly $28 million, if a Congress doesn’t act to stop sequestration before Jan. 2, the White House said. The news came in the administration’s much anticipated sequestration report Friday, which detailed sharp across-the-board cuts to the budgets of most federal agencies. An industry group and a union representing FCC employees said the report shows the negative impact that sequestration will have on federal employees, private industry and the economy as a whole.

In a proposal that is raising some concerns internally at the FCC, a notice of proposed rulemaking on rules for an incentive auction of broadcast spectrum proposes that a reverse auction, where broadcasters will propose to sell their spectrum or opt to share spectrum, and a forward auction, where the agency will offer the licenses for 4G and LTE, take place concurrently, officials said. The NPRM was circulated by FCC Chairman Julius Genachowski Sept. 7 (CD Sept 10 p1) and it was being reviewed by the various commissioner offices last week. The NPRM is slated to get a vote at the FCC’s Sept. 28 meeting.

Government agencies don’t distribute emergency alert system warnings to radio listeners and viewers of over-the-air and pay TV only via the Internet, state and federal originators of EAS alerts and industry executives said. During Hurricane Isaac, the Federal Emergency Management Agency’s new Web-based EAS distribution system wasn’t used by agencies serving the Gulf Coast that responded to our survey. Instead, the traditional method of distributing storm and disaster alerts by broadcasting them to all radio and TV stations and multichannel video programming distributors in a region was used late last month, as it continues to be.

There is “not yet widespread piracy in the cloud,” Business Software Alliance President Robert Holleyman told us, but “we're starting to see small elements of this.” Piracy will not disappear in the cloud, as some have claimed, Holleyman said, but “the form that piracy takes will change,” Holleyman told the House Judiciary Internet Subcommittee earlier this year, and private industry is taking steps toward combating it.

Industry and agency officials gathered at the FCC Thursday for a detailed explanation of the proposed Connect America Fund Phase II cost model, presented by CostQuest Associates. The goal of the CostQuest broadband analysis tool (CQBAT) is to identify the high-cost portions of broadband buildout throughout the country, defined by the ABC Coalition as anything over $80. A map presented at the meeting showed most of the high-cost areas exist in the western half of the country, and some loops can even cost in excess of a million dollars. This can happen when a dedicated plant is required to serve a single customer, said CostQuest President James Stegeman.

House Intelligence Committee members said they remain skeptical and frustrated about the response from Chinese telecom firms Huawei and ZTE to their investigation into whether the companies posed a security threat to the U.S. The committee has been investigating whether the Chinese government is using the companies as agents to commit espionage and threaten critical U.S. infrastructure (CD Nov 18 p5). The committee called in executives from both companies Thursday -- Charles Ding, Huawei’s senior vice president, and Zhu Jinyun, ZTE’s senior vice president for North America and Europe -- to answer questions under oath they think the companies haven’t properly responded to during the investigation.

House Republicans and Democrats differed over the best way to ease what both sides say is a looming commercial spectrum crunch, at a House Communications Subcommittee hearing Thursday. Majority members on the subcommittee urged federal agencies to relinquish more federal spectrum for commercial use, while Democrats cheered the administration’s across-the-board approach to sharing and clearing spectrum. A Defense Department official said federal users are working hard to achieve the administration’s goal of freeing 500 MHz of federal spectrum by 2020. Spectrum experts said that goal can only be achieved by employing sharing scenarios. Industry groups said that clearing spectrum for commercial use, rather than sharing, should be the ultimate goal.

Next-generation 911 is moving forward as text-to-911 trials continue and authorities reconsider old regulation, panelists at an FCBA emergency communications session said Wednesday night. They looked at the virtues and shortfalls of text-to-911 and considered the broader regulatory challenges 911 providers face, such as in interconnection agreements.

Rep. Joe Barton, R-Texas, said it may be time for Congress to abolish the USF. The senior House Commerce Committee member and its former chairman spoke in a C-SPAN interview about the fund created by the Telecom Act of 1996 and being expanded by the FCC to cover broadband. Barton, on an episode of The Communicators to be shown Saturday and Monday, was sharply critical of FCC net neutrality rules. Limited privacy legislation could still be enacted in 2012, he said.

Comcast’s NBCUniversal makes about $1 billion a year less on its broadcast network than its three main competitors do, a gap the company hopes to close, President Stephen Burke told investors during a Bank of America conference Thursday. “Each of our competitors makes somewhere between $700 million more than we do, up to a billion and a half,” he said. “There’s really no good reason for that other than we need to make better shows.” That gap represents a huge opportunity for NBC’s profitability, he said. The owners of broadcast-TV networks each have the same infrastructure, “and yet one company on average is making a billion dollars a year less than the others,” he said. “That’s a great opportunity.” NBC’s station group was earning about $150 million a year in profit recently, which has since climbed to about $400 million, he said. That number can continue to improve, he said. “It’s hard to find many [business] priorities where you can find a billion dollars in operating cash flow just by doing things better."