OMNIBUS APPROPRIATIONS BILL RESTORES BUT LIMITS FCC AUCTION FUNDING
The FCC spectrum auction program could suffer a budget cut if the omnibus appropriations legislation remains as reported in the House last week. The bill would limit the FCC to $85 million of auction revenue to fund that program. It had been funding the administrative costs of spectrum auctions from the money raised in the auctions without submitting budget requests to Congress. The cost of the program has risen steadily over the years and the Commission had estimated it would need $97 million to fund the program this year. It was unclear whether the FCC would devote funds from its budget to make up the difference.
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The Senate Commerce Justice State appropriations bill (S-1585) contained a provision that would prevent the FCC from using any of the auction proceeds to fund administration of the sales, but the reason for that was unclear (CD Sept 11 p1). A spokesman for Senate Appropriations CJS ranking Democrat Hollings (S.C.) said Congress wanted the FCC to submit a budget request for the auction appropriations. The spokesman said Senate Appropriations CJS Chmn. Gregg (R-N.H.) initiated the cut. His office didn’t respond to our several requests for information. Speculation among Senate staffers varied, with some expressing concern about the rising cost of the program and others wondering whether it simply was designed to reduce the bill’s cost.
FCC Chmn. Powell said the auction provision of the Senate CJS bill would “abruptly shut down the Commission’s auction program” (CD Oct 24 p2). In a letter to Senate Commerce Committee Chmn. McCain (R-Ariz.), Powell warned that the funds necessary to run the auction hadn’t been appropriated and that the CJS bill’s language effectively would end the program, thus potentially costing the U.S. Treasury billions of dollars in revenue. Powell defended the program as cost-effective. In Sept., McCain wrote to Senate Appropriations Chmn. Stevens (R-Alaska) to request the FCC’s auction funding be restored. In that letter, McCain said the changes were made without “a single hearing or justification.”
The Senate CJS bill was included in the omnibus appropriations bill, which was filed in the House last week. The House CJS appropriations bill has no such restriction on FCC auction spending. The $820 billion omnibus bill included 7 appropriations measures, including the CJS bill.
FCC officials have said both financing and information technology (IT) expenses are most responsible for the program’s rising costs (CD Oct 1 p4). With the program having brought in billions in revenue, some on a delayed payment program, the FCC had to contract with financial auditors, officials said. It was also important to keep the program state-of-the-art, which also led to expensive IT programs, officials said.
Since the auction program began in 1994, the FCC has deposited nearly $14.4 billion into the federal treasury and has spent nearly $384 million to run the program. The agency said it needed $25 million to conduct the program in 1997 and by 2001, the request had risen to $75 million. In a Sept., FCC officials projected the costs for the program would level off at about $100 million. An FCC spokesman said the agency didn’t comment on pending legislation.