Analysts: Government shutdown could imperil FCC's agenda

As the shutdown of the federal government grinds into its fourth day and appears likely to last through the weekend, analysts say that a prolonged shuttering of government operations could impact the FCC and other agencies' agendas on technology policy, especially for wireless spectrum and auctions.

The FCC is currently operating with a skeleton crew of 38 employees, or 2 percent of its workforce. The remaining 1,716 employees have either been furloughed or sent home.

"Generally, during a shutdown all FCC activities other than those immediately necessary for the protection of life or property will cease," the FCC noted in its shutdown plan. "Suspended activities include, among many others: Consumer complaint and inquiry phone lines cannot be answered; consumer protection and local competition enforcement must cease; licensing services, including broadcast, wireless, and wireline, must cease; management of radio spectrum and the creation of new opportunities for competitive technologies and services for the American public must be suspended; and equipment authorizations, including those bringing new electronic devices to American consumers, cannot be provided."

A more long-term casualty, though, could be the FCC's agenda for the PCS H Block spectrum auction, currently scheduled for January, and the incentive auctions of broadcast TV spectrum. The longer the shutdown goes on, analysts said, the more of a backlog the FCC staff will have to deal with when the government does reopen, though at this point there is no telling exactly when that might be. 

Further, the longer a government shutdown persists, the longer it will be until the Senate can vote on Tom Wheeler as the next chairman of the FCC and Michael O'Rielly as its second Republican commissioner. As things stand, the Senate Commerce Committee canceled a session on Thursday in which it was supposed to vote on O'Rielly's nomination.

"If it's a brief shutdown I think the impact is minimal," Medley Global Advisors analyst Jeffrey Silva said. "Everybody gets back to business. If you get anywhere into three or four weeks, that has a cumulative and a compounding effect. It just sets everything back."

The incentive auctions process was always going to have to wait for Wheeler to get confirmed so that he could take charge of the item. However, more delays mean it will take more time for him and his staff to get acclimated at the FCC and to get the ball rolling on his agenda, analysts said.

In terms of the H Block, Silva noted that the Jan. 14 auction date was likely set based on historical precedents for how long auctions take to get set up. Even when the government reopens, staffers might be distracted with dealing with the backlog of meetings and filings that have been pending. That could put a strain on resources inside the agency, he said.

The FCC's website, like many government websites, has been shuttered. However, Telecommunications companies must continue to use the Network Outage Reporting System (NORS), which will remain available during the shutdown, to file reports of telecommunication service disruptions, the FCC said. But the FCC is not accepting new filings or comments on proceedings.

"This has a cumulative and a multiplier effect," said Harold Feld, senior vice president at public interest group Public Knowledge. He said the FCC will eventually "have to make decisions about diverting staff on more long-term things to clearing the backlog."

Feld also noted that a lot of the preparations for the H Block auction, the first major spectrum auction since 2008, are being put on hold during the shutdown. "There are a lot of complications that may lead to the pushing of the H Block auction," back from Jan. 14, he said.

Further, Feld also said that any efforts the National Telecommunications and Information Administration was making in clearing federal spectrum for commercial use, such as the 1755-1780 MHz band, will also be put on hold.

One thing that could force the end of the government shutdown is the impending Oct. 17 deadline for Congress to raise the debt ceiling to avoid a potential default on federal debt obligations. "In a weird way, I think that has a perverse effect of getting everybody's attention because of the really serious economic consequences," Silva said.

The Obama administration has been rallying support from the business community to apply pressure in an effort to break the deadlock with Republicans in the House over government funding and raising the debt ceiling. "It is unthinkable that the United States could default on its financial commitments, and it would be the height of irresponsibility for any public official to consider such a course," AT&T (NYSE:T) CEO Randall Stephenson said in a statement. "In fact, even the discussion of default poses great risk to our economy and to our country. It is imperative to our Nation that the overwhelming majority of our public officials who recognize this reality unite their efforts, regardless of party, to bring a responsible solution forward."

For more:
- see this FCC document (PDF)
- see this Washington Post article
- see this The Hill article
- see this PhoneScoop article
- see this Broadcasting & Cable article

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