Senate and House Face Long Road in Reconciling FCC Appropriations Funding

"What I'd say to Chairman Wheeler is at the end of the day, I think he’s probably going to be dealing with a status quo-type budget under a continuing resolution,” Sen. Mike Johanns, R-Neb., ranking member of the Appropriations Financial Services Subcommittee, told us. “I don’t think you'll see a regular budget process in the Senate,” he said, citing the “unwillingness” of Majority Leader Harry Reid, D-Nev., to allow amendments: “The appropriations process has ground to a halt. Consequently, I think what you'll see probably sometime when we come back in September is a continuing resolution. Typically those are a status quo endeavor and so, notwithstanding what the House did, I think that at the end of the day the CR is going to fund them about at the level they are at. That will probably extend maybe into the lame duck if there is one or extend until after the first of the year.”

The House’s proposed FCC funding “is seriously inadequate,” House Appropriations Financial Services Subcommittee ranking member José Serrano, D-N.Y., told us in a statement. “The entire bill contains serious cuts that harm the numerous regulators who protect the interests of the American public, and the case is no different here. We cannot expect the FCC to stay on top all of the ongoing technological changes when their own infrastructure remains in dire need of updating and when we do not give them the resources to react quickly. While we are likely to at least start fiscal year 2015 with a continuing resolution, I believe that we can resolve many of these inadequacies if the House and Senate are given a chance to negotiate, as we did last year."

The House approved the Financial Services bill (HR-5016) in a 228-195 vote this month. The White House has announced opposition to the House appropriations bill. It would allocate $323 million for the FCC, close to $53 million below what the agency requested. The FCC’s FY 2014 budget was $339.84 million. The Senate Financial Services Subcommittee allocated the full amount that the FCC requested, clearing its own budget during a session in late June. But the Senate Financial Services bill still requires approval from the full Appropriations Committee.

Mid-last week, Appropriations Committee Chairman Barbara Mikulski, D-Md., said other priorities have kept the committee busy. “We're not sure yet,” Mikulski told us of full committee consideration of the Financial Services bill. “First we've got to deal with supplemental. The supplemental’s taking forever.” She was referring to the unrelated Emergency Supplemental Funding Bill, released in draft form late last week. Congress has just one more week before breaking for August recess.

Wheeler outlined his fears in a blog post the same day the House passed its slashed budget, pointing to the agency’s suffering IT system. Lawmakers should “ultimately reach agreement on funding levels that ensure we have the resources to modernize and upgrade our IT systems,” Wheeler said (CD July 18 p13). House Appropriations Financial Services Subcommittee Chairman Ander Crenshaw, R-Fla., author of the House bill, had dismissed Wheeler’s concerns and called on the FCC to be a “a leaner, more efficient, and more transparent agency” in a statement to us. His spokeswoman declined to speculate on what may happen to the FCC budget numbers during any conference given the Senate has yet to advance legislation.

The gap between the Senate and House budgets is significant for the FCC, one Washington communications attorney who has experience at the FCC told us. The agency has important matters on its plate, from the spectrum auctions to the proposed industry consolidation deals, and it does likely need the people and need the money requested, he said.

One broadcast industry lobbyist called the state of FCC IT “atrocious.” She wondered if that could affect the agency’s software for the broadcast TV spectrum incentive auction, scheduled for the middle of next year. A different industry official pointed out to us that despite the gulf between the overall funding levels, both chambers would allocate the agency its auction request of $106 million, meaning no potential impact on the FCC’s ability to carry out the AWS3 or incentive auctions.

Another open question in any eventual reconciliation involves a municipal broadband provision. The House had attached an amendment to its Financial Services bill from Rep. Marsha Blackburn, R-Tenn., that would prevent the FCC from moving forward on its initiative to pre-empt state laws that restrict municipal broadband. Municipal advocates lobbied hard against that House measure and have turned their attention to the Senate.

"We will be working to make sure all members of the U.S. Senate are aware of the importance of local choice for broadband investment,” the New America Foundation’s Patrick Lucey told us last week. “Communities should be free to make decisions about broadband infrastructure for themselves. There is a growing body of evidence that documents the positive impacts of local broadband networks, and it is important that policymakers hear these individual stories and understand why local choice for broadband is so vital for communities.” Lucey is a policy program associate with the NAF’s Open Technology Institute. (jhendel@warren-news.com)