TR Daily 1% FCC Budget Cut, Familiar Spectrum Provisions Proposed
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Monday, March 18, 2019

1% FCC Budget Cut, Familiar Spectrum Provisions Proposed

The FCC is seeking $335.6 million in budget authority for fiscal year 2020, which would be an approximately 1.0% reduction from the $339 million in FY 2019 budget authority in an appropriations package approved by Congress last month that ended the partial federal government shutdown (TR Daily, Feb. 15), according to budget documents released by the Commission and the Trump administration today.

The administration also is again proposing several spectrum-related legislative proposals that have been submitted in past years, including allowing the FCC to impose fees on unauctioned commercial spectrum and requiring it to auction the 1675-1680 MHz band.

The FCC is seeking $132.5 million in budget authority for its spectrum auctions program, at least $11.1 million for its Office of Inspector General, and the same 1,448 full-time equivalent employees as FY 2019. All of the FCC’s budget is funded by fees imposed by the agency.

Last week, the Trump administration released its high-level FY 2020 budget (TR Daily, March 11), but it waited until today to release supporting documents such as the appendix, which includes the detailed budget requests for government departments and agencies, including the FCC. The Commission released its 44-page budget proposal document today. FY 2020 begins on Oct. 1.

The FCC is seeking $3.192 million in authority for one-time information technology modernization and implementation investments.

It wants $2.266 million for cloud services and application modernization. “By modernizing the outdated technology-based [security as a service] application listed below and/or moving it to a cloud-hosted environment, the Commission expects to save approximately $301,750 per year in database administration, O&M [operation and maintenance] support, developer support, and infrastructure costs,” it says.

It is seeking $926,000 for cloud services and system modernization.

“By modernizing and migrating outdated [international high frequency (IHF) coordination system and wide area network modernization] legacy-based systems and/or manual operations listed below to a cloud-based environment, the Commission expects to save approximately $201,000 per year in database administration, O&M support, infrastructure costs, developer support, management cost, and desktop infrastructure,” it says. As for spectrum legislative policy proposals, the administration included three that have been proposed in the past.

“To promote efficient use of the electromagnetic spectrum, the Administration proposes to provide the FCC with new authority to use other economic mechanisms, such as fees, as a spectrum management tool,” the administration says. “The FCC would be authorized to set user fees on unauctioned commercial spectrum licenses based on spectrum-management principles. Fees would be phased in over time as part of an ongoing rulemaking process to determine the appropriate application and level for fees. Fee collections are estimated to begin in 2020 and total $4.0 billion through 2029.”

This proposal has been suggested by Democratic and Republicans administrations for years without success – largely due to its high-profile opposition, including by the National Association of Broadcasters.

Another legislative proposal notes that “[t]he Spectrum Pipeline Act of 2015 requires 30 MHz of spectrum to be reallocated from Federal use to non-Federal use or shared Federal and non-Federal use, or a combination thereof; requires the FCC to auction this spectrum by 2024; and extends the FCC’s auction authority only to allow auction of this spectrum. To facilitate this, the Act also authorizes the use of funds from the Spectrum Relocation Fund for research and development and planning activities by Federal entities that are expected to increase the probability of relocation from or sharing of Federal spectrum and that meet other requirements. The Budget proposes to require the auction of additional spectrum by 2029 and further extend the FCC’s auction authority solely to allow this auction to proceed. Auction proceeds are expected to reach $6.0 billion through 2029.”

“Additionally, following successful completion of the National Oceanic and Atmospheric Administration (NOAA) Spectrum Pipeline Plan, the Budget proposes that the Commission exercise auction authority to assign spectrum frequencies between 1675–1680 megahertz for wireless broadband use subject to sharing arrangements with Federal weather satellites. The proposal is expected to raise $600 million in receipts over 10 years,” according to the budget.

Ligado Networks LLC is urging the FCC to address a petition for rulemaking it has filed asking the agency to allocate and auction the 1675-1680 MHz band for shared commercial use with NOAA.

“We commend the Administration and FCC for continuing to support the auctioning of this mid-band spectrum, which will be critical for next-generation technologies like 5G,” a Ligado spokeswoman said today. “We look forward to participating in the auction process over the coming year.”

At the Commerce Department, the National Telecommunications and Information Administration would get $42.4 million under the administration’s proposed FY 2020 budget, compared with the $39.5 million enacted for FY 2019.

“The 2020 Budget: (1) continues to provide spectrum assignment and analysis support to Federal agencies; [and] (2) supports NTIA's responsibilities under the Spectrum Pipeline Act of 2015 and MOBILE NOW Act (2018) to help identify additional federal spectrum to be shared or reallocated for commercial use,” according to the budget. “NTIA will continue with its efforts through BroadbandUSA to improve the nation's understanding of broadband availability by implementing its broadband availability data mapping initiative. BroadbandUSA will also continue to encourage and promote partnerships among state, municipal, non-profit, and private-sector organizations and to support deployment of new community broadband systems through online and in-person technical assistance, regional workshops, and guides and tools providing proven solutions to problems in broadband planning, financing, construction, and operations. The Budget proposes to establish a new Program, Project, or Activity (PPA) for Public Safety Communications to provide the critical leadership and support for the coordination, interoperability, transition, and technical resources for our nation's public safety agencies in their adoption and implementation of advanced communications technologies.”

The language on a new program, project or activity refers to the addition of a new program line item for public safety communications, an NTIA spokesman said. Under current law, all of NTIA’s public safety communications activities, such as the First Responder Network Authority (FirstNet) and next-generation 911 grants, are funded through mandatory programs, the spokesman noted.

“To promote efficient use of the electromagnetic spectrum, the 2020 Budget proposes to authorize the National Telecommunications and Information Administration (NTIA) to negotiate leases with private entities that would expand their access to federal spectrum. This authority will complement ongoing efforts to make Federal spectrum available for commercial uses through auctions conducted by the Federal Communications Commission,” the budget adds. “Of the anticipated receipts from this proposal, the Budget proposes to provide up to $50 million, to remain available until expended, to NTIA to support the agency's efforts in the modernization of its spectrum IT systems, resulting in advanced automation tools; improved data accuracy and transparency; and spectrum efficiency evaluation tools. Improved analytical precision will enable NTIA and Federal agencies to, among other things, identify new spectrum sharing and leasing arrangements that are more attractive and valuable to commercial entities.”

The Trump administration also proposed the spectrum lease authorization in its FY 2019 budget (TR Daily, Feb. 12, 2018).

According to the more detailed budget information on the telecom and broadband loan and grant programs administered by the Rural Utilities Service released today, the administration is proposing $200 million for the continued implementation of the broadband loan and grant pilot program known as the e-Connectivity or ReConnect program, initially established with $600 million for fiscal 2018 in an omnibus appropriations measure enacted last March (TR Daily, March 23, 2018).

The budget proposal would require that “at least 90 percent of the households to be served by a project receiving a loan or grant under the pilot program shall be in a rural area without sufficient access to broadband,” and that for the purposes of the pilot program “a rural area without sufficient access to broadband shall be defined as 10 [megabits per second] downstream and 1 Mbps upstream, and such definition shall be reevaluated and redefined, as necessary, on an annual basis by the Secretary of Agriculture. It also would require that funding not be used “to overbuild or duplicate broadband expansion efforts made by any entity that has received a broadband loan from the Rural Utilities Service.” It would limit spending on project administrative costs to 4% of the allocation and spending on technical assistance and pre-development planning activities to 3% of the allocation. It would direct the RUS “to expedite program delivery methods that would implement this section.”

It also proposes $175.7 million for the principal amount of cost-of-money Treasury rural telecom loans; $514.3 million for the principal amount of Federal Financing Bank (FFB) rural telecom loans made under section 306 of the Rural Electrification Act; $1.9 million for the cost of making cost-of-money rural telecom loans; $43.6 million for rural telemedicine and distance learning grants, with the provision that $20 million of that amount be “available for telemedicine projects that address the Nation’s opioid epidemic”; and $30 million for broadband transmission grants in areas eligible for rural telemedicine and distance learning grants.

Meanwhile, in the Federal Emergency Management Agency budget within the Department of Homeland Security, the state Homeland Security Grant Program would get $331.9 million (compared to $525 million enacted in FY 2019), the Urban Area Security Initiative would get $426.5 million (compared to $640 million in FY 2019), and Assistance for FireFighter Grants and Staffing for Adequate Fire and Emergency Response Grants would each get $344.3 million (compared to $350 million each in FY 2019). —Paul Kirby, [email protected], and Lynn Stanton, [email protected]

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