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After Pissing Off Congress, FCC Asks For Biggest Budget In History

Less than a week after the FCC stepped on legislators’ toes by voting to assert regulatory control over the Internet, the agency is asking Congress to massively increase its budget.

The request was made at a hearing held by the House Subcommittee on Communications and Technology to discuss FCC reauthorization. The subcommittee is chaired by Republican Rep. Greg Walden, who has been sharply critical of the FCC’s decision to regulate the Internet as a public utility under Title II of the Communications Act. (RELATED: FCC Votes in Favor of Net Neutrality)

Walden and other subcommittee members made clear that a major component of any reauthorization proposal would be an update of the Communications Act– to reflect the significant technological evolutions that have occurred since it was last updated 17 years ago.

“Much has changed since the last reauthorization of the commission” in 1990, Walden said, “but in the intervening years the FCC has struggled to reflect the evolution of technology.” (RELATED: Republicans Solicit Feedback on Net Neutrality Legislation)

“Nowhere is the Communications Act’s failure of imagination more evident than in the FCC’s decision to reclassify broadband service under rules developed to regulate the telegraph’s heyday,” he explained, saying the ruling “repudiated years of light touch regulation of the Internet under both Republican and Democratic administrations … [and] suggests an agency seemingly ill-suited to address the needs of the modern communications ecosystem.”

FCC Managing Director Jon Wilkins delivered testimony on behalf of the commission, requesting approximately $530 million in spending authority for FY 2016, which, he admitted, “represents a marked increase over the FY15 appropriated number of $339.8 million.”

In fact, Walden clarified, the figure “would be the highest funding level in the agency’s history.”

Wilkins countered that over the past six years, “the FCC has operated under essentially flat funding levels,” and when the effects of inflation and sequestration are taken into account, “suffered actual reductions in the purchasing power of our budget.”

He further claimed that this “flat funding” has not only forced the agency to reduce its staff, but also to delay improvements to its IT systems that would improve the efficiency of its remaining workforce.

But “One component of the request that resonates in particular, and is in addition to the $59 million increase in funding” for operational expenses, Walden pointed out, “is a request for a $25 million transfer from the Universal Service Fund.”

The Universal Service Fund (USF), which is managed by the FCC, is designed to promote universal access to telecommunications by subsidizing services in rural and low-income areas through fees paid by telecom companies.

“In the past,” Walden noted, “Congress funded the FCC’s Office of Inspector General with a transfer of USF funds for the purpose of bolstering audits and investigations to address waste, fraud, and abuse in the Fund following a GAO report.” (RELATED: FCC Commissioner Demolishes Net’s New Rules, in 3 Quick Points)

The current request is for a “realignment” to cover the cost to the FCC of managing the fund, which Wilkins claimed would “reduce … the regulatory fee burden on licensees with no USF relationship,” such as local broadcasters and marine licensees.

But “this ‘realignment,’ as it is called, would create a separate funding stream for the agency that comes directly out of the pockets of consumers to implement and support a subsidy program the size of which is determined by the FCC and that has become so large and burdensome that it appears that it has outgrown the FCC’s capacity for adequate oversight,” Walden argued.

Walden noted that his experience on the subcommittee had taught him that, “the [FCC’s] budget request is like a window into the agency itself,” and said, “It is my hope that our conversations today will pull back the curtain and provide the committee and the American people with a better understanding of … what the commission is really up to.”

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