Genachowski Says FCC Has Highest ROI of Federal Agencies
On May 9, 2012, FCC Chairman Julius Genachowski addressed the Senate Subcommittee on Financial Services and General Government in a hearing about the FCC’s 2013 resource needs. Genachowski delivered a hard sell about how the FCC has the highest return on investment of all federal agencies, but eventually revealed that the FCC needs to collect $346,782,000 in 2013 “to implement our responsibilities under the Communications Act.” This amount is 2% more than 2012’s $339,844,000, which Genachowski claims is “essentially flat adjusting for inflation.” The budget “will be derived entirely from fee collections.”
Genachowski took the opportunity to update members of the Subcommittee, including Senator Dick Durbin (D-IL) and Senator Jerry Moran (R-KS), about the FCC’s plans for spectrum incentive auctions. According to Genachowski, “Incentive auctions are an opportunity to unleash vitally needed additional spectrum for mobile broadband and create tremendous value for American consumers, while raising billions of dollars for deficit reduction. It’s a key part of the puzzle to unleashing the mobile broadband opportunity.” He continued, “Incentive auctions are unprecedented. The U.S. will be the first country in the world to conduct them. It will be a complex task affecting major parts of our economy and involving many challenging questions of economics and engineering.” One translation: incentive auctions will be a very expensive undertaking, and it is currently uncertain exactly how much money will be earned for the U.S. Treasury.
Genachowski also updated the Subcommittee about progress in implementing the National Broadband Plan—which includes incentive auctions. Genachowski commented, “We have been working hard on implementing the broadband plan. Together with my colleagues at the FCC, we have made tremendous progress in the past three years, taking many steps to unleash investment, innovation, and job creation. These include freeing spectrum for both licensed and unlicensed use, modernizing and reforming major programs like the Universal Service Fund, and removing barriers to broadband buildout.”
After a long list of other FCC accomplishments and initiatives, Genachowski dropped the news about needing to increase the budget by 2%. While $7m is by no means an extraordinary amount of money for a federal agency, it should be noted that the 2% increase will come from regulatory fees, which will come from your companies—and ultimately your consumers’ pockets.
Also this week, the FCC released a Notice of Proposed Rulemaking about the 2012 regulatory fee collection target of $339,844,000. The FCC proposes very few changes to the regulatory fee collection methods. The FCC plans to release two additional NPRMs this year seeking input on reexamining the regulatory fee system.