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Clyburn: Budget Cuts Could Have 'Cascading' Effect

Acting FCC Chairwoman Mignon Clyburn told a Senate appropriations subcommittee Wednesday that if the country wanted to remain a world leader in communications, it should not compromise the FCC funding that supports the FCC's mission.

She suggested that budget cuts could lead to a cascade of negative outcomes that will continue to slow the FCC's ability to process thousands of applications for new and innovative services, which could affect spectrum development and auctions.

She pointed out that the FCC is already doing less thanks to the sequester and was operating on $322 million in 2013 when it had asked for $346.7 million.

The Republican-controlled House is looking at giving the FCC only $320 million for 2014, Subcommittee Chairman Tom Udall (D-N.M.) pointed out, and asked how that would affect the commission, which would like closer to $360 million.

Clyburn said the FCC had already been forced to "cut corners" to continue to meet "mission critical" objectives.

She said that corner-cutting does not come without programmatic costs. Those costs include not replacing failing equipment, turning off the air conditioning system at 6 p.m. during the heat of the summer, routine shortages in supplies, cancelation of contracts, bare bones travel budgets.

She pointed out that the FCC pays for its own budget from user fees, so that the sequester was simply siphoning off some of that money. "Instead of building up the industry's foundation, serving the needs of consumers and funding dynamic new products and services, FCC licensees paid an extra $17 million in funds that were deposited directly into the U.S. Treasury," she said.

She also pointed out that while the FCC pays application processing costs out of its appropriation, all of that money goes directly to the treasury.

"Processing these applications is becoming more difficult as we face staffing shortages," she said. "The inevitable results are slowdowns in application processing, which will impede progress and economic development and have a negative, cascading impact on all Commission operations – from spectrum development to auctions."

In addition to budget issues, the hearing was primarily focused on phone and broadband issues, including rural call completion, the challenges of universal service reform, incentive auctions for wireless broadband, E-rate reforms, and funding of an interoperable emergency communications network--one of the 9/11 Commission recommendations. Somewhat unusual for Washington these days, there was no mention of retransmission consent.