Analysis of Key Telecom Provisions in the President's FY23 Budget Request
Federal Communications Commission (FCC)
The FCC budget envisions $390 billion in budget authority, an increase of $16 million from the FY22 annualized continuing resolution (CR) level.
The FCC’s budget justification relies on six strategic goals for FY23:
Pursue a “100 percent” broadband policy.
Promote diversity, equity, inclusion, and accessibility.
Empower consumers.
Enhance public safety and national security.
Advance America’s global competitiveness.
Foster operational excellence.
The budget request outlines activities the FCC will take in support of the Universal Service Fund (USF) to help bring affordable, reliable, high-speed broadband to 100 percent of the country; eliminate waste, fraud, and abuse; and promote efficiency, accountability, and fiscal responsibility. The FCC intends to continue to administer the Connect America Fund, Rural Digital Opportunity Fund (RDOF), 5G Fund for Rural America, Lifeline, E-Rate, and the Rural Healthcare Program.
The FCC request includes $132 million for the spectrum auctions program, a $2 million decrease from the FY22 annualized CR level. According to the budget justification, funding at this level will enable the commission to:
Implement the Infrastructure Investment and Jobs Act (IIJA) by taking steps toward the potential auction of licenses in the 3.1-3.45 GHz band.
Implement the Spectrum Pipeline Act of 2015 by, for example, taking steps to auction 30 MHz and continuing the steps necessary to promote use of the 3.5 GHz band.
Implement the Consolidated Appropriations Act of 2021 for 5G Act of 2020 by supporting the transition of the 3.45 GHz band and the relocation of secondary radiolocation users.
Continue ongoing activities and taking other steps necessary to implement the RAY BAUM’S Act, including the MOBILE NOW Act provisions regarding identifying, making licenses available through auction, and transitioning spectrum for mobile and fixed wireless broadband use in, among other bands, the 3.7 GHz-4.2 GHz range.
Continue and close out post-broadcast incentive auction (BIA) work related to displacement, repacking, and reimbursing from the TV Broadcaster Relocation Fund (TVBRF) to broadcasters and multichannel video programming distributors (MPVDs) for their costs to implement the results of the BIA.
Upgrade and improve its auctions program infrastructure and security posture in preparation for future auctions authorized by the IIJA and the Spectrum Pipeline Act, including the auction for overlay licenses for white spaces in the 2.5 GHz band.
The budget notes the FCC is working to implement the Broadband DATA Act and to comply with related broadband mapping requirements included as part of the IIJA, including the creation of a Broadband Deployment Locations Map, a public resource that will show the locations of broadband infrastructure projects funded by the federal government.
The request states that the FCC is in the process of implementing the Secure and Trusted Communications Networks Reimbursement Program to fund “rip and replace” efforts with applications to be approved or denied by June 15.
The budget makes clear that the FCC is implementing the Affordable Connectivity Program (ACP) and will continue to release enrollment data to inform program awareness efforts and increase transparency.
The FCC budget indicates that the FCC is continuing to implement COVID relief programs, including the COVID-19 Telehealth Program and the Emergency Connectivity Fund.
The FCC’s budget seeks $2.2 million for regulatory information technology (IT) and cybersecurity compliance to address Executive Order 14028, “Improving the Nation’s Cybersecurity” and for regulatory and federal mandates surrounding IT and cybersecurity.
Additionally, the budget request includes $1 million for an enterprise-wide application performance monitoring capability and replacement of old end user equipment.
Rural Utilities Service (RUS) (U.S. Department of Agriculture (USDA))
USDA’s budget summary reaffirms RUS’s role is to provide financing to build or improve rural electric and telecommunications infrastructure, including broadband access.
The summary aligns the budget with the Secretary’s strategic goal to improve rural and Tribal community infrastructure, including affordable e-connectivity, with a 2023 target of reaching 250,000 households with new or improved e-connectivity services, up from 200,000 in 2022.
The budget states that RUS will provide loans and grant financing for electric and broadband infrastructure serving rural and remote communities through the Electric and Telecommunications programs.
The budget request supports $690 million in telecommunications Treasury loans for the construction, extension, and improvement of telecommunication facilities that expand broadband and e-connectivity to populations of up to 5,000.
The budget also provides $25 million for modification of existing loans for financially distressed borrowers, and for refinancing outstanding loans where the borrower maintains service despite non-payment and offers broadband service with the speed of at least 100/20 Mbps.
USDA’s budget request for RUS includes $600 million for the ReConnect program to issue loans, grants, and a loan/grant combination to deploy broadband to underserved areas.
The budget continues to include $35 million for broadband grants to support new or improved broadband access in communities with populations of up to 20,000.
RUS’s budget also includes $60 million for Distance Learning and Telemedicine (DLT) grants to assist rural communities that would otherwise be without access to learning and medical services over the internet.
National Telecommunications and Information Administration (NTIA) (U.S. Department of Commerce)
NTIA’s FY23 budget request totals $67.6 million and 189 positions to advise the president on communications and information policy issues.
NTIA’s spectrum management program direct funding for FY23 totals $8.9 million and includes 40 positions with a focus on expanding analysis capabilities to increase spectrum access available to commercial and federal users. The budget is intended to support the commercial sector’s development of next generation wireless services by recommending reallocation of spectrum for commercial use and by promoting spectrum sharing between commercial and government users.
The budget includes $12.7 million and 51 positions for advanced communications research, including research to identify innovative approaches to increase spectrum access and sharing opportunities.
NTIA’s broadband program funding in FY23 totals $27.4 million and 42 positions. The budget states these resources will be used to continue to support communities in their efforts to close the digital divide and improve broadband services in unserved and underserved communities across the country.
The budget justification notes that NTIA’s Office of Internet Connectivity and Growth (OICG) will continue Broadband USA outreach activities with states, localities, and tribal organizations to improve digital inclusion efforts; hold regional and virtual workshops to share best practices and effective strategies to expand broadband access and adoption; and develop education and training tools to support local strategies to expand broadband access and adoption.
The budget justification states that NTIA’s Office of Minority Broadband Initiatives will continue to collaborate with federal agencies; state, local, and Tribal governments; Historically Black Colleges and Universities (HBCUs), Tribal Colleges and Universities (TCUs), and Minority Serving Institutions (MSIs) to promote initiatives related to expanding connectivity and digital opportunities for anchor communities.
The budget envisions NTIA providing ongoing oversight and technical assistance to recipients that will be awarded Broadband Connectivity Grants to protect the federal investment of $1.27 billion in federal funds in broadband projects.
The FY23 budget includes resources for NTIA to continue its broadband availability data mapping initiative, including by updating geographic information systems (GIS) and geo-analytical systems necessary to support the base programs; integrate, visualize, and analyze broadband availability data from participating states; integrate, visualize, and analyze broadband availability data from broadband providers; integrate new Broadband DATA Act granular data on broadband availability and quality; and integrate updated broadband planning data from other federal agencies.
In FY23, NTIA will also provide oversight of approximately $980 million in Tribal Broadband Connectivity grants and $288 million in Broadband Infrastructure grants.
The budget includes $4.4 million and eight positions related to public safety communications to support Next Generation 911 (NG911).
Federal Trade Commission (FTC)
The budget request includes $490 million for the FTC, roughly a 33 percent increase from FY22 funding levels. This includes a $139 million increase for antitrust enforcement.
Department of Justice (DOJ) Antitrust Division
The budget request would provide $273 million for DOJ’s Antitrust Division to reinvigorate antitrust enforcement, protect consumers, and promote economic competition. This represents a funding increase of $88 million.
Traditionally, the PBR has come to be viewed as an exercise for the administration to identify priorities for the annual appropriations cycle. The House and Senate Budget Committees have now held hearings with Office of Management and Budget (OMB) Director Shalanda Young to review the budget request, although we believe it is unlikely Congress will pass a budget resolution this year. Meanwhile the House and Senate Appropriations Committees are proceeding with their budget hearings with agency principals. Appropriators are aiming to complete the 12 FY23 appropriations bills before the October 1 start of the new fiscal year, but this remains a tall order given that toplines must still be agreed to and bipartisanship will be rare in the runup to the November midterm elections. We anticipate that we will see a CR past the elections and most likely into early 2023.