Congress Juggles ‘Political Football’ in Securing FCC’s Annual Funding

The partisan divide on net neutrality complicates congressional funding of the FCC and has made the annual task of appropriating much harder over the past several years, veteran appropriators of both parties on Capitol Hill told us in recent conversations. The appropriations process for the agency is now intensely political, they said, citing the very different perceptions among Republicans and Democrats of the agency and its missions.

“Unfortunately, it’s become a real political football, even though it’s paid for by the [entities] that are regulated,” said Sen. Tom Udall, D-N.M., a member of the Commerce and Appropriations committees who formerly chaired the Appropriations Financial Services Subcommittee. “It shouldn’t be that way.”

“It’s a harder issue to get the FCC funded because some of the other guys and ladies would like to kill the FCC if they could,” said House Appropriations Financial Services Subcommittee ranking member Jose Serrano, D-N.Y. “Because of net neutrality and all these issues they don’t want. So it’s always a struggle.” Serrano has been a chief appropriator on that subcommittee for many years and associates the difficulties directly with the high profile of net neutrality, since FCC approval of GOP-opposed open Internet rules in 2010 and again this February. “I think when the net neutrality issue started to rise,” Serrano recounted, “opposition to the FCC in general started to rise.”

FCC funding has been frozen in recent years despite agency requests for more. Its budget is about $340 million and has been so for a half-dozen years. The agency had 1,708 full-time equivalent employees as of its budget request this year and requested no new full-time hires for the first time in at least a decade, according to the agency. FCC Chairman Tom Wheeler testified before House and Senate appropriators this spring stressing a need for more funding, citing priorities such as IT upgrades and a planned agency headquarters relocation. The possible FCC move (1501090040) was spurred by a smaller staff needing less space. “During the past six years -- beginning after FY 2009 -- the FCC has operated under essentially flat funding levels for our non-auction activities,” Wheeler testified in May. “In fact, calculating the flat funding levels in light of inflation and sequestration impacts shows that we have suffered actual reductions in the purchasing power of our budget.”

Agency records show that despite recent flat funding, Congress now authorizes overall more money for the FCC than in years past while the agency tends to employ fewer full-time employees. In FY 2014, the agency had $340 million in appropriated budget authority and 1,716 full-time employees; in FY 2013, $340 million and 1,723; in FY 2012, $340 million and 1,725. The number of employees stayed under 1,800 back through FY 2007 but was significantly higher before that in many years. In FY 2004, the agency employed 2,015 full-time employees while operating at $274 million. The agency’s highest number of employees in recent decades was 2,112 in FY 1995. The flat $340 million annual budget figure of recent years is higher than what the FCC operated on from FY 2000 through FY 2008. In FY 2000, the agency operated at $210 million, employing 1,933 that year. The FCC’s current number of full-time employees is lower than any listed figure going back to 1983. The numbers in FY 2012 through 2014 are only a few employees higher and historically the closest comparison from recent decades would be the FCC of FY 1991, when the FCC employed 1,743 full-time workers.

Appropriator Influence

Hill Republican appropriators had different perspectives on how Congress should address FCC funding given opposition to certain policy priorities. One current key appropriator questioned the agency’s relevancy and defended giving it less money. Another GOP appropriator defended using the power of the purse for swaying FCC decision-making but insisted he still wants to ensure what he deems adequate and necessary funding.

“There is dissatisfaction by many of us in the role the FCC has played in regard, for example, to net neutrality,” said Sen. Jerry Moran, R-Kan., another Commerce and Appropriations committee member who also formerly chaired the Financial Services Subcommittee. “They exceeded their authority, they went beyond what Congress allows them to do.” The appropriations process “allows us to have the opportunity to have conversations” about these issues, Moran said. “Members of Congress, Republican and Democrat, ought to have influence on behavior of agencies, and the one way that we can get their attention is through the appropriations process.”

“As a general rule, the FCC is not as vital as it was 30, 40 years ago,” said House Appropriations Financial Services Subcommittee Chairman Ander Crenshaw, R-Fla. “That’s why net neutrality, when you decide you’re going to regulate the Internet, treat it like a public utility, when it’s probably the most dynamic, entrepreneurial area of our economy, seems like a backwards step to take. And in general, the FCC ought to have a lighter touch and say, ‘Look, a lot of wonderful things are happening in the communications world, so we don’t need a heavy hand that we might have needed when all you had was a radio and a telephone.’” These issues have made it harder to decide FCC funding, Crenshaw said: “It has to do with what their workload is. Generally, you tell people to do more with less because [we’re working with less money.] I said to the FCC, why don’t you do less with less.”

Crenshaw’s original House budget proposal would have cut FY 2016 funding $25 million, while Wheeler requested an increase of $48 million to $388 million. The Senate proposed cutting the FCC budget to a lesser extent while providing for separate appropriations authority for the headquarters relocation. Democrats opposed both appropriations measures. This partisan fighting underscores bigger tensions within Congress and the breakdown of conducting appropriations by regular order through individual appropriations measures.

'Adequate Resources'

Moran sees a middle ground, citing the importance of the oversight process rather than defunding. He was one of the key appropriators who pressed for FCC leadership to testify regularly before the Appropriations subcommittee. FCC officials have testified before Senate appropriators at least once a year for the last several years, starting under Moran’s leadership. “The agencies and departments ought to be in front of Appropriations Committee for oversight on an ongoing, regular basis,” Moran said. “That in my view needs to happen more often than it does, FCC and otherwise.”

Moran cited the many technical challenges facing the FCC on issues such managing spectrum and USF. He wants to ensure the “technical skill level of their staffing to be able to deal with issues that are very challenging,” and balance that prioritization with the other conversations he feels appropriators should have with agency officials, he said.

“What I think that means for somebody like me, who cares about making sure they have adequate resources, is to figure out what areas which I think ought to be prioritized,” Moran said. “And at the same time use their constant or continual demand for additional dollars, to say, hey, we need your attention on issues, not necessarily as big or as political as net neutrality, but lots of things that happen. And I care a lot about broadband deployment. To get the FCC’s attention on issues that they might not otherwise exhibit [interest in]."

The recent two-year budget deal secured higher spending caps for appropriators, which Moran said may mean more funding for the FCC and be a “positive development” in that sense. Appropriators have spent the past several weeks hammering together a FY 2016 omnibus funding bill based on the higher caps. “I hope we give them adequate funding,” Udall said. “That’s what we need to do.”