Obama's Budget Makes Last Push to Close Digital Divide

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By Lydia Beyoud

Feb. 9 — The Obama administration is looking to use its last budget request to Congress to continue its push through multiple federal agencies to connect communities that remain unconnected to high-speed Internet and to meet the requirements of the Spectrum Pipeline Act of 2015.

Those proposals include broadband program funding shifts and increases within the Department of Agriculture (USDA) for rural areas and in the Department of Housing and Urban Development (HUD) for low-income communities.

Budget cuts are on the table, however, for the Federal Communications Commission, which would see its funding scaled back to $358 million, according to the Obama administration's Feb. 9 proposal.

The latest request is a $25.7 million decrease from current enacted levels of $384 million for FY 2016. The agency's budget request includes $16.9 million earmarked for moving expenses or to reconfigure the agency's real estate footprint once its lease runs out in October 2017. The amount is the second installment of a total $44 million request made the previous year for that purpose.

The agency also asked to move $9.5 million from the Universal Service Fund to its general coffers to oversee the integrity of USF programs, which have been the target of fraud, waste and abuse in recent years.

The agency is also seeking additional authorities to improve spectrum management, including the ability to assess spectrum license fees. The FCC proposed such measures in its last budget request, which Congress rejected. The administration said the fees would be phased in and would total $4.8 billion from 2017 through 2026, if enacted.

The FCC's proposed budget is part of the administration's discretionary spending budget request to Congress of $1.215 trillion. The total budget request is $4.1 trillion, including mandatory spending like Social Security and interest on debt.

NTIA Budget Increase

The National Telecommunications and Information Administration (NTIA) would receive more money under the president's budget request, in part to further the administration's goal of freeing up a total of 500 megahertz (MHz) for commercial use by 2020. That goal was set in 2010 under the National Broadband Plan.

NTIA would receive more than a 25 percent increase in appropriations under the administration's proposal, up to $50.84 million for FY 2017.

Congress appropriated $39.5 million in FY 2016, though the White House had originally sought $49.2 million in that year's budget request.

A portion of the agency's budget request would support the NTIA's responsibility under the Spectrum Pipeline Act of 2015 to identify 30 MHz of federal spectrum to be shared with or auctioned off to commercial users by 2024.

NTIA Assistant Secretary of Commerce Lawrence Strickling said Feb. 1 his agency and the FCC are working together to identify another 250 MHz of spectrum available for commercial use by the end of 2016.

Revised ‘Mobile Now' Text

The Senate has its own plans to accelerate the shift of spectrum from federal to private hands.

A new draft of Sen. John Thune's (R-S.D.) bill to increase the amount of federally held spectrum reallocated to commercial licensed and unlicensed use could be revealed by the end of the week, the Senate Commerce, Science and Transportation Committee chairman said Feb. 9.

Speaking at a CTIA—The Wireless Association policy summit in Washington, Thune said he and ranking member Sen. Bill Nelson (D-Fla.) were close to finalizing a revision of the Mobile Now Act, first circulated Nov. 6, 2015 .

In its initial release, the draft bill proposed to increase the amount of spectrum federal users would have to give up from 30 MHz to 50 MHz.

Thune's inclusion of spectrum for unlicensed use is a departure from the draft bill's initial focus on licensed uses. His remarks may signal the incorporation of Senate Commerce member Brian Schatz's (D-Hawaii) bill (S. 2278) to ensure unlicensed spectrum is a central piece of the nation's overall spectrum policy strategy.

Digital Divide

The requested appropriations for bridging the so-called digital divide between wealthy, urban communities and low-income and rural areas underscore the administration's broader efforts to boost connectivity through education and technology investment.

The request includes $5 million for HUD's ConnectHome initiative, launched last July in 27 cities and in tribal areas .

The housing funds will help the administration expedite bringing Internet access to places without it, Darrell West, director of the Center for Technology Innovation at the Brookings Institution, told Bloomberg BNA. “They want to improve digital literacy as well as digital access,” he said.

The majority of technology and innovation is funded by the private sector in the U.S., “so they have focused on the parts of the market that have not been served by businesses to make sure they get reasonable access,” he said.

Google Fiber, CenturyLink Inc. and Cox Communications Inc. are among the companies and other groups working with HUD to bring high-speed broadband to affordable housing developments.

In rural communities, the administration proposed to retool a USDA program to provide Digital Learning and Telemedicine (DLT) loans into a grant-based program. The budget proposed nearly $39.5 million for DLT grants, but no DLT loans, due to low demand, according to the budget document.

Approximately 34 million Americans lack access to broadband speeds as defined by the FCC .

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bna.com

To contact the editor responsible for this story: Keith Perine in Washington at kperine@bna.com

For More Information

Text of the FCC's FY 2017 Budget Estimates to Congress is at http://src.bna.com/cyq.

Text of the FY 2017 Summary Tables is at https://www.whitehouse.gov/sites/default/files/omb/budget/fy2017/assets/tables.pdf.

Text of Thune's prepared remarks is at http://www.commerce.senate.gov/public/index.cfm/speeches?ID=016478D3-0C39-4D7C-B65E-CE422C335E47.

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