Simpson & Bowles Propose Changes for FCC Auctions, USF, CPB and R&D Tax Credit

November 10, 2010. Alan Simpson and Erskine Bowles, Co-Chairs of the National Commission for Fiscal Responsibility and Reform (NCFRR), released a document [50 pages PDF] titled "Co-Chairs' Proposal", and an attachment [24 pages in PDF] titled "$200 Billion in Illustrative Savings". Several of their proposals relate to information and communications technology (ICT).

The NCFRR is a Presidential Commission with bi-partisan membership. Simpson is a Republican, and a former Senator from the state of Wyoming. Bowles is a Democrat, and a former Chief of Staff to President Bill Clinton.

The 50 page document and 24 page attachment are written by an entity that is merely an advisory commission. The two items are released by the Co-Chairs, not by the full Commission. The document is labeled "draft". It is a collection of large print presentation slides, full of bullet points and line items, but almost no explanation.

The 50 page document states that "Everything Must Be On the Table". (See, page 2.) It proposes to "Cut red tape and inefficient spending that puts a drag on the economy and job creation" and to "Invest in education, infrastructure, and high-value R&D". (See, page 5.)

It proposes to "Extend FCC's authority to auction radio spectrum licenses". (See, page 39.)

This document proposes to "Reduce spending from Universal Services Fund". (See, page 38.) Also, a table lists reductions in "Universal Service Fund" of $29 Billion over ten years. (See, page 40.)

This document also proposes to "Eliminate a number of programs administered by the Rural Utility Service". (See, page 20.) This document does not identify which programs should be eliminated. The Department of Agriculture's (DOA) Rural Utilities Services (RUS) administers, among other things, communications loan, grant and subsidy programs.

However, the attachment provides some elaboration. It states that "In recent years the RUS has increased its focus on expanding broadband access to rural areas, a noteworthy goal. However, the agency also runs a number of programs which are outdated, overlapping, and which provide limited or questionable public policy benefits. These include the Local Television Loan Program among others." (See, page 8.)

The section on defense spending proposes to "Reduce spending on Research, Development, Test & Evaluation by 10 percent". (See, page 19.) Some ICT research is conducted by the Department of Defense (DOD). This document does not state what DOD research and development (R&D) spending could be cut. However, the attachment does. It lists a number of non-ICT programs that could be cut. (See, page 22.)

The attachment also notes that "Between FY2001 and FY2010, DOD received $400 billion in funding (in FY2011 dollars) for Other Procurement, a category that includes communications and electronic equipment (e.g., tactical SINCGARs radios, radars, communications and information security)", among other things. (Parentheses in original. See, page 20.)

This document also states that the "Option 2: Wyden-Gregg Style Reform" includes proposals to "Permanently extend the research credit" and for "International tax reform including a territorial system". (See, page 27.)

The attachment proposes to "Reduce wasteful spending at the Department of Justice", but does not identify any units or programs. (See, page 9.)

The Department of Justice (DOJ) includes many components that are involved ICT issues. The Antitrust Division reviews mergers of communications companies, and brings actions against ICT companies for alleged violations of the Sherman Act and other laws. The Criminal Division prosecutes violations of statutes related to intellectual property protection, computer hacking and cyber security. The Civil Rights Division (CRD) has four rulemaking proceedings under way that would expand its enforcement authority under the Americans with Disabilities Act (ADA) to include regulation of ICT. The DOJ's Federal Bureau of Investigation (FBI), Criminal Division, National Security Division, and other DOJ components are involved in communications intercepts, accessing data held by communications, internet, and cloud computing companies, and other surveillance and search and seizure matters.

The attachment proposes a merger of the Department of Commerce (DOC) and Small Business Administration (SBA). (See, page 5.)

The attachment also proposes to "Cut funding for the Corporation for Public Broadcasting. The Corporation for Public Broadcasting’s primary job is to fund NPR and its member stations (and other public radio stations) and PBS and its member stations. The current CPB funding level is the highest it has ever been. This option would eliminate funding for the Corporation for Public Broadcasting, saving just under $500 million in 2015." (Footnotes omitted. Parentheses in original. See, page 13.)

Additionally, it states that "Congress should end two duplicative public broadcasting programs on President Obama’s termination list: The Public Telecom Facilities Grant Program (PTFP) and USDA’s Public Broadcasting Grants program. In recent years, PTFP has primarily provided funding to help broadcasters transition to digital broadcasts. In FY2010, PTFP received $20 million in appropriations. The President has twice recommended terminating USDA’s Public Broadcast Grants program for the same reason. This program received $5 million in FY10 to provide funding to public broadcast companies to convert to digital transmission as well -- an obsolete task."  (Footnote omitted. See, page 13.)