TESTIMONY

Of

MICHAEL K. POWELL

Chairman
Federal Communications Commission

Before the

Subcommittee on Commerce, Justice, State, and the Judiciary
of the Committee on Appropriations
United States Senate

On the

Federal Communications Commission's
Fiscal Year 2003 Budget Estimates

Thursday, March 7, 2002

SUMMARY OF TESTIMONY OF FCC CHAIRMAN MICHAEL K. POWELL

March 7, 2002 

The Federal Communications Commission ("FCC") continues its efforts to implement a 
longterm business plan designed to make it a more responsive, efficient and effective 
agency, capable of facing the technological and economic opportunities and challenges of 
the new millennium. As always, the Commission's efforts are guided by its commitment 
to protect consumer welfare and the public interest.

To effectuate its goals, the FCC has requested $278,092,000 and 1,975 FTEs for Fiscal 
Year 2003. This request includes $9,765,000 to fund the Administration's government-
wide proposal to fully fund retirement costs in each agency's budget. The Commission's 
requested operating costs are $268,327,000.

The FCC has demonstrated during the past calendar year a commitment to its regulatory 
purpose. The fundamental mission of the FCC is to implement the Communications Act 
of 1934, as amended, in a manner that promotes competition, innovation, deregulation, 
and the availability of high-quality communications services for all Americans.

The Fiscal Year 2002 funds have been, and are continuing to be, used to fund critical 
infrastructure improvements, especially related to the FCC's information technology 
needs, and to improving consumer services and reducing regulatory backlogs. The FCC 
also has dedicated resources to improving its workforce, hiring more engineers, training 
staff, and providing incentives for talented staff to remain for longer periods of time and 
serve the public interest. During the past year, the Commission began improvements at 
the Columbia, Maryland Laboratory facility to upgrade its testing capabilities and install 
trained personnel to facilitate this process. Most importantly, the FCC has completed a 
complete self-examination, developed a restructuring plan, and is poised to begin the 
process of implementing critical reorganization changes.

On January 17, 2002, the FCC sent the cornerstone of its improvement plan to this 
committeea Section 605 Report detailing the reorganization of the Commission. The 
reorganization is more then just a retooling of an old agencyit represents an important 
step in streamlining the FCC. It is built along four important concepts: (1) a clear 
substantive policy vision; (2) a pointed emphasis on management; (3) an extensive 
training and development program; and (4) organizational restructuring.

The FCC has articulated specific areas for policy-making emphasis: broadband 
deployment, competition policy, spectrum policy, building a foundation for media 
ownership regulation, digital television transition and homeland security. The 
Commission's policy emphasis also have a new sense of purpose since September 11, 
2001. Everyone has seen the critical importance of a healthy and competitive 
communications systemboth in times of national crisis, and in times of peace. With the 
funds requested for Fiscal Year 2003, the FCC will continue its important work in 
ensuring a dynamic regulatory environment that facilitates the development and 
deployment of new technologies and services for all Americans.
Mr. Chairman, Ranking Minority Member, and Members of the Subcommittee, I 
appreciate this opportunity to appear before you today to provide you with a report of our 
work conducted during the past calendar year and to discuss the Federal Communications 
Commission's ("FCC") Fiscal Year 2003 Budget.

Less than nine months ago, I appeared before this Subcommittee for the first time 
and made a personal commitment to effectuate fundamental change within the 
Commission. I guaranteed that the Commission, as an institution, would complete a 
thorough self-examination and develop a reform plan designed to make the FCC a more 
responsive, efficient and effective agency, capable of facing the technological and 
economic opportunities and challenges of the new millennium. The Commission 
delivered on this promise and sent you a reprogramming request for its reorganization six 
months later. We appreciate your rapid consent to our request.

I also pledged to enhance the Commission's independent technical and 
engineering expertise. The Commission dedicated resources to recruiting, training and 
retaining a solid technology-oriented workforce under our "Excellence in Engineering" 
Program. We have hired 18 mid- and senior-level and five entry-level engineers. We 
instituted training programs to keep current and future engineers up to date in their 
profession. And, we have improved the environment for engineers by purchasing 
equipment to facilitate the spectrum management process, and to upgrade the Columbia, 
Maryland Laboratory's testing capabilities. Our on-going efforts in this regard, coupled 
with the Agency's "FCC University" and "Excellence in Economic Analysis" initiatives, 
hopefully will preserve our existing wealth of FCC staff knowledge and expertise and 
enhance and extend that collective knowledge into the new millennium.

When I last appeared before this Subcommittee, I pledged to make the 
Commission a model of solid management techniques and performance. As such, the 
Commission moved forward to continue to streamline agency processes and procedures, 
automate agency processes, provide improved access to agency information, and 
modernize its information technology infrastructure. During our January 2002 Open 
Agenda Meeting, the Commission's staff delivered with statistics showing substantial 
improvement in backlog reduction levels and other management benchmarks.

Finally, I also vowed that the Commission would use the remainder of its Fiscal 
Year 2001 and expected Fiscal Year 2002 funds to implement its statutory mandates and 
serve as a constructive and fair independent agency, cognizant of the intent of Congress 
and dedicated to serving the public interest and consumer welfare. I am confident that the 
Commission has met all of these commitments and, in doing so, has achieved 
significantly higher levels of customer benefit and policy and management performance.

The Commission has made these achievements, however, against the backdrop of 
tragic and dramatic national events. The events of September 11, 2001, provided us all 
with an important lesson in the significance of the FCC's portfolio. We know now that 
our society has developed more than just an appetite for communications services
America is dependent upon these services in times of crisis and in times of peace. A 
strong and competitive communications network is essential to a healthy economy and 
our nation depends on both, whether to bolster its ability to defend itself, or to 
communicate in times of normalcy.

Last year, this Subcommittee initially provided the Commission with full funding, 
plus additional resources for the "Excellence in Engineering" Program. Although our 
final funding was slightly less than originally requested, I am appreciative of this 
Subcommittee's efforts to ensure that we had adequate resources to achieve our goals and 
effectuate significant intraagency reform efforts. For Fiscal Year 2003, the Commission 
is requesting $278,092,000, of which $268,327,000 will be dedicated toward our 
operational requirements.

This year, you have my personal pledge to continue driving forward in a patient 
and deliberate mannerto handle the expected and the unexpected, from homeland and 
internal security to biennial reviews, an expected influx of Section 271 long-distance 
applications, and pending major merger reviews, just to name a few. The Commission 
intends to use its expected funding to continue its campaign to upgrade the Agency's 
facilities, as well as to initiate and complete critical rulemakings. The present request is 
the minimum amount necessary to continue to capitalize our past successes and to carry 
us through the immense challenges of the next fiscal year. Already, Fiscal Year 2002 has 
been marked by a tidal wave of expected and unexpected events and policy and 
regulatory issues. I expect Fiscal Year 2003 to be at least as opportune and challenging. 

FISCAL YEAR 2002: MAXIMIZING AVAILABLE RESOURCES

It is fitting that we have this hearing on March 7th, a day marked by important 
historical milestones for the telecommunications industry. On this day in 1876, 
Alexander Graham Bell received a patent for the telephone. Fifty years later on the same 
day, the first successful transatlantic radiotelephone conversation took place between 
London and New York. In retrospect, 50 years seems like a very long period of time 
between these achievements. Today, we develop new communications products and 
services at a more rapid speed then ever before, in an exponential fashion that makes 
science fiction a matter of science fact within just a handful of years. Looking forward, 
that makes for policy and management opportunities, as well as hurdles and challenges.

As a consequence, the Commission continues to capitalize on its well-established 
core competencies, especially honed over the past six years, to eliminate barriers to entry 
in domestic communications markets; to deregulate where appropriate to promote 
competition; to vigorously enforce Commission rules so that corporate entities compete 
fairly; and, to promote competition in international communications markets. Moreover, 
the Commission continues to build upon the cornerstone principles of the public interest 
and general consumer welfare to promote access for all Americans to communications 
service, and to promote heightened consumer education and information.

The Commission must stay abreast of technological advances and be prepared to 
face the future before the future arrives. To do so, the Commission needs funding to 
improve its use of internal technology and to develop a highly trained workforce to 
evaluate communications industry trends. Last year when I appeared before you, I 
discussed the Commission's critical need to upgrade its infrastructure. I also emphasized 
our efforts to re-evaluate the Agency and develop a business plan to reform its 
organizational structure. A well-funded infrastructure and an efficient organizational 
structure are intrinsically linked. The overall ability of the Commission to function as an 
institution is dependent upon the quality of both. When I last testified, we already had 
made strides toward upgrading information technology and technological resources. Six 
months after my testimony, I sent you a report outlining a significant internal 
reorganization of the Commission.

The foundation for the Commission's reorganization rests on the shoulders of its 
staffa diverse and committed group of people dedicated to utilizing resources to 
maximum capacity and rebuilding a trim, well-focused organization that meets the needs 
of America's communications industries and their consumers. The reform and 
reorganization of the Commission is built along four specific concepts: (1) a clear 
substantive policy vision; (2) a pointed emphasis on management; (3) an extensive 
training and development program; and (4) organizational restructuring. The 
implementation of each of these concepts exemplifies how the Commission utilized its 
financial resources during the past year, and explains our plans for additional funding in 
Fiscal Year 2003.

A Clear Policy Vision

I enumerated above a set of policy and management imperatives that will extend 
the Commission's mission, evolve its operational strategies, and drive further the culture 
of efficient, effective and responsive performance. First, we articulated a clear policy 
vision. The Commission's staff also evaluated our activities in these identified issue areas 
and tied the highlighted policies to the reform of the Commission as an institution. We 
initially specified several areas for policy-making emphasis: broadband deployment, 
competition policy, spectrum policy, building a foundation for media ownership 
regulation, digital television transition, and homeland security. Although these issues 
sometimes overlap, their individual significance guides our dedication of resources in the 
regulatory arena.

Broadband

Recently, I noted that one of the FCC's central policymaking focuses is, and 
should be, the promotion of efficient, widespread deployment of broadband 
infrastructure. Recognizing the importance of broadband deploymenta topic of 
conversation that is extensively discussed here on Capitol Hill, as well as at the 
Commission, Wall Street, and Main Streetthe Commission is taking a concerted, 
comprehensive approach to bring regulatory clarity to what is, at best, a murky and 
confusing policy area. To that end, the Commission has committed significant resources 
to consider and initiate several proceedings that pointedly address broadband issues. Of 
course, our actions in this area will first and foremost be grounded in the Act, taking into 
account the statutory objectives of competition, universal service, and consumer 
protection.

It is important to emphasize that while we have committed significant resources to 
initiating or completing various rulemakings, the legal and regulatory issues implicated 
here have yet to be resolved. But they must be resolved if we collectively intend to 
facilitate the ubiquitous availability of broadband to all Americans. The Commission 
welcomes the input of all Americans in our deliberative processespecially the opinions 
of the Members of this Subcommittee and Congress as a wholeas we proceed in 
developing a regulatory framework for successful broadband deployment.

Competition Policy

Competition is a fundamental and guiding statutory principle under the 
Telecommunications Act of 1996. It is the root from which most of our other policy areas 
grow. Under my leadership, the Commission has been outspoken in its support for 
competition, both inter- and intra-modal. More significantly, however, our actions have 
backed up our words.

Positive rules to promote competitive entry are meaningless without a credible 
enforcement effort to back them up. Therefore, we have made enforcement the 
cornerstone of our competition policy. As you will recall, last year we called on Congress 
to increase dramatically the forfeiture amount allowed under the statute. While we 
eagerly await the fulfillment of this request, we have vigorously enforced our rules that 
serve to promote competition. In addition, in contemplating our competition policy, we 
recognized that ensuring that competitors have access to those network elements that are 
necessary to provide competing telecommunications services is only half the battle. 
Indeed, the competitive local exchange carrier ("CLEC") community told us that to be 
useful, network elements must be provisioned in a timely manner. In response to 
provisioning concerns, we launched two Notice of Proposed Rulemakings on 
performance standards. Through these proceedings, we have embarked on an effort to 
simplify performance levels and standards to both clarify obligations and to allow for a 
mechanism for swift enforcement when those levels and standards are compromised.

Moreover, the Commission has been vigilant in its review of Section 271 
applications. Since passage of the 1996 Act, the Commission has denied as many Section 
271 applications (this includes situations where the application has been withdrawn, an 
effective denial) as it has granted. In 2001, despite the fact that the roadmap for approval 
has been drawn, two Section 271 applications involving three states were withdrawn, 
demonstrating the Commission's continued determination in ensuring the competitive 
checklist is met and local markets are open for competition. Furthermore, the 
Commission has begun a second analytical look at the regulatory implementation of the 
Act, through our Triennial Review of Unbundled Network Elements Requirements 
NPRM, that takes account of market experiences to determine which of our regulations 
are working to provide a competitive environment for consumers and which are not.

Spectrum Policy

The Commission's first assigned task in 1934 was to manage the spectrum. The 
same basic principles articulated then continue to exist today. The Commission has an 
obligation to ensure that spectrum, an important and precious resource, is used in a wisely 
manner that ensures the broadest public benefit and meets urgent public needs.

The Commission has acted decisivelyutilizing our staff and the spectrum 
auctions process to follow Congress' mandate that we work toward the rapid deployment 
of spectrum. During the past few months, we have reallocated the spectrum used for 
channels 52-59, designated the 4.9 GHz band for public safety purposes, and authorized 
the use of spectrum for Ultra-Wideband technology. In a major rulemaking completed on 
December 28, 2001, the Commission reallocated 27 MHz of spectrum transferred from 
the Federal Government. This spectrum will permit the initiation of new and flexible 
servicesfor example, in the fixed satellite service, fixed mobile service, telemetry, and 
low power radio. In addition, the Commission has experimented with innovative methods 
for licensing that encourage private band management within the confines of existing 
statutory guidelines.

Media Ownership Foundation 

The time has come to rebuild the factual foundations that support a contemporary 
regulatory regime for media ownership regulations. Although the media landscape has 
changed dramatically since the initiation of many of the Commission's ownership 
regulations, the longstanding goals of diversity, competition, and localism remain 
paramount.

As you are aware, the U.S. Court of Appeals for the D.C. Circuit recently vacated 
some of the Commission's broadcast ownership rules, and has remanded others for our 
reconsideration. At the heart of the court's concern is the ability of the Commission to 
justify these restrictions in light of the dynamic changes in today's marketplace.

Long before the recent court decision, however, I expressed concern about the 
quality of the record the Commission relied on in reaching media ownership decisions. In 
an effort to shore up this area, I announced the creation of a Media Ownership Working 
Group on October 29, 2001. This working group is tasked with developing a solid factual 
and analytical foundation for media ownership regulation. Moreover, they are working to 
provide an empirical and analytical basis for the Commission to ensure that our 
regulatory regime in this area actually serves to meet the goals of diversity, localism, and 
competition in the media marketplace.

It is important to note, however, that the D.C. Circuit's recent decision found that 
the Act compels the Commission to review the full panoply of media ownership 
regulations every two years and to repeal these regulations unless the Commission makes 
an affirmative finding that the rules are necessary to serve the public interest. To address 
the court's criticism that we lack a factual foundation for our ownership rules, we must 
expend a meaningful amount of resources to improve the evidence before us. We cannot 
afford to sit back and hope the public submits all the information we need to make good 
decisions. We must be proactive in deciding what questions need to be answered, and 
then to go out and answer them. That is what I have set up the Media Ownership 
Working Group to do.
We then need to apply those factual findings to our media ownership rules and 
determine if the rules as written truly promote competition, diversity and localism, or 
whether today's media market requires different approaches. I welcome that challenge 
and would simply note that overhauling our knowledge base on media ownership and 
then re-initializing it every two years hence will require a significant commitment of 
resources.

In addition to appointing specific FCC personnel to gather empirical information, 
the Commission has launched a comprehensive examination of rules on multiple 
ownership of local radio stations and set interim policies to resolve pending radio transfer 
applications. The Commission also, as recommended by the prior Commission, initiated a 
proceeding to review the newspaper-broadcast cross-ownership rule. The Commission 
also began a rulemaking on cable ownership rules last year. In addition, the Commission 
has proposed new equal employment opportunity rules for broadcast and cable. I believe 
that by next year, with the proper allocation of resources within the Commission, I will 
be able to report on significant beneficial progress in this area.

Digital Television Transition 

While broadband deployment and the inherent competitive issues involved rank 
as the most important communications issues facing America, the economic by-products 
of digital television ("DTV") are equally important in scope and stature. Television is, 
after all, a central part of our society and provides our citizenry with essential information 
and entertainment. Consequently, the DTV transition and its economic and regulatory 
implications maintain an important place in the Commission's overall policy-making 
efforts. In October 2001, I announced the creation of a Digital Television Task Force. 
This task force will review the ongoing transition to DTV, and make recommendations to 
the Commission concerning priorities to facilitate the transition and promote the rapid 
recovery of broadcast spectrum for other uses. In addition to making recommendations 
for agency action, the Task Force has been facilitating discussions with the various 
industries that are largely responsible for the transition. 

Homeland Security 

In response to the events of September 11, 2001, the Commission established a 
Homeland Security Policy Council ("HSPC"). The formation of the HSPC and its work 
involves the use of significant resources in an area that we did not consider for budgetary 
purposes during the Fiscal Year 2002 appropriations process. Like other agencies, we are 
using our current pool of Full-Time Employees ("FTEs") to cope with the events of 
September 11, 2001, and we are demanding more of them in handling their regular 
workload along with new tasks.

HSPC is assigned to handle overlapping security issues and respond to specific 
mission objectives. First, the mission of this group is to assist the Commission in 
evaluating and strengthening measures for protecting U.S. telecommunications, broadcast 
and other communications infrastructure and facilities from further terrorist attacks. 
Second, HSPC assists the Commission in ensuring rapid restoration of U.S. 
telecommunications, broadcast, and other communications infrastructure and facilities 
after disruption by a terrorist threat or attack. Third, HSPC assists the Commission in 
ensuring that public safety, public health, and other emergency and defense personnel 
have effective communications services available to them in the immediate aftermath of 
any terrorist attack within the United States.

Emphasis on Management 

As an outgrowth of the Commission's self-examination and reform, the 
Commission has placed a new emphasis on the management of available resources and 
the creation of tools designed to enhance the operation of the bureaus. We asked all 
managers to review their internal processes and develop real solutions to existing 
problems. Specified management initiatives include: (1) backlog reduction; (2) better use 
of technology, including a re-designed Internet site; (3) improved productivity; and (4) 
consolidated and simplified licensing systems.

At our January 2002 Open Agenda Meeting, most Bureau and Office Chiefs 
reported on their reduction in regulatory backlogsa matter that has dogged the 
Commission. We have posted these statistics on the Commission's Internet site 
(<http://www.fcc.gov>), so that our progress in this area is evident to the industry. One 
major highlight in this area is the Wireless Telecommunications Bureau. In 1998, they 
had a 13.12 percent backlog of applications pending for more then a year. By December 
2001, that percentage had dropped to 0.24 percent. Likewise, the International Bureau 
managed to achieve a 55 percent reduction in pending applications for Review and 
Petitions for Reconsideration, as well as a 56 percent reduction in the number of existing 
non-routine applications and a 25 percent reduction in existing satellite space station 
applications.

This past year, the Commission's management maximized improved information 
technology resources to increase responsiveness to consumers. The FCC's redesigned 
Internet site is part of our management plan to make the Agency more responsive and 
transparent. We average approximately 265,000 hits on a daily basis, and we were ranked 
third overall among federal agencies for Internet site design. At the end of November 
2001, the Commission launched a new FCC search engine to improve its Internet site.

In addition to a general managerial emphasis on outreach, the Commission's staff 
leadership is tasked with improving bureau productivity. For instance, the Commission 
instituted comprehensive accounting and reporting reform for incumbent local exchange 
carriers. And, in an effort to reach out to our core constituencies, the bureaus have all 
undertaken efforts designed to consolidate and simplify licensing systems. The 
Commission has proposed new procedures to increase the efficiency of satellite licensing 
procedures. The Commission also has proposed a uniform system for filing informal 
complaints. This particular change would promote efficiency and predictability for 
consumers and service providers.

Training and Development 

The Commission's long-term policy objectives require a highly trained staff 
capable of adapting to technological change and industry trends. Accordingly, the 
Commission has instituted a range of training and technical initiatives: (1) the "FCC 
University"; (2) the "Excellence in Engineering" Program to recruit engineers and 
improve their physical resources; and (3) recruitment and retainment of economic 
experts, or the so-called "Excellence in Economic Analysis" Program.

Already we have instituted internal training programs in a variety of areas and 
brought outside experts in to train our staff in various disciplines. The most successful 
element of this program so far, however, is the FCC's "Excellence in Engineering" 
Program, initiated during the previous fiscal year and continued with funds in our Fiscal 
Year 2002 appropriation. Already we have hired 18 mid- and senior-level and five entry-
level engineers in open FTE positions. We have instituted a special training program to 
educate and retain our technological experts. We have dedicated a substantial portion of 
our funding to improving the physical infrastructure used by the engineers for testing and 
other purposes. At the Columbia, Maryland Laboratory, we have purchased five new 
spectrum analyzers and three new signal generators to enhance our ability to adequately 
measure emissions. As a result of these improvements, we now have the capability to 
take measurements at 110 GHz instead of the outdated 30 GHz level. We also have 
dedicated financial resources toward the purchase of equipment designed to measure 
cellular phone radiation.

Restructuring 

Although managerial goals and engineering equipment are essential components 
of an efficient agency dedicated to high-tech matters, the key to ensuring a well-
functioning agency is to create an organizational backdrop that maximizes human and 
technological resources. On January 17, 2002, the Commission sent the cornerstone of its 
improvement plan to this Committeea Section 605 Report detailing the reorganization 
of the Commission. We are in the initial stages of implementing that reorganization. The 
Commission's plan is more then a simple retooling of an old agencyit represents an 
important step in streamlining the Commission. Although there will be no initial 
budgetary impact from the restructuring, we expect that in years to come, the 
streamlining approach taken here will pay dividends in efficiency and good management. 
I have attached to my written testimony a copy of the proposed organizational chart for 
the Commission.

We intend to dedicate the bulk of our human resources to continue to move 
forward in these areas, to make the Agency responsive to consumer and industry 
demands and to facilitate telecommunications growth and deployment. The best way to 
accomplish this goal is to ensure adequate funding to purchase necessary equipment, 
improve our information technology capabilities, and hire and retain trained technical 
personnel capable of assisting the Commission in its decision-making process.

FISCAL YEAR 2003: CONTINUING A YEAR OF PROGRESS

It is important to note that all of the reform and restructuring efforts started in 
Fiscal Year 2001 continue to be limited by the available discretionary funding in Fiscal 
Year 2002.  Currently, 69 percent of the Fiscal Year 2002 appropriation is earmarked for 
salaries and benefits. Additionally, 29 percent will cover non-discretionary cost increases 
related to rent and supplies. That amount leaves the Commission with two percent of its 
total appropriation to implement reform  streamline operations, enhance technical and 
economic expertise, oversee spectrum management, and provide funds for resolution of 
ongoing enforcement issues such as cramming/slamming. For this reason, focussing on 
improving the funding picture in the future i.e., Fiscal Year 2003is especially 
important.

The $268,327,000 in operational costs requested by the Commission for Fiscal 
Year 2003 is the bare minimum needed to allow us to continue the progress made during 
the past year. In order to achieve our goals, and stay abreast of telecommunications 
developments, the Commission must keep ahead of changes in technology, economics, 
and the law. Accordingly, we are requesting $15,066,000 for critical programmatic 
initiatives. An additional $8,190,000 would be dedicated toward uncontrollable cost 
increases related to salaries, benefits, and inflationary cost increases for rent and supplies. 
The Administration's request of $9,765,000 for retirement costs brings the total 
Commission Fiscal Year 2003 budget to $278,092,000. The Fiscal Year 2003 regulatory 
fee offset for the Commission would be 89 percent of the proposed Fiscal Year 2003 
budget, making our direct appropriation request from this committee 9.5 percent over our 
total fiscal year budget, or 13.5 percent with the pension costs included.

From the perspective of funding Commission objectives, the critical segment of 
the overall budget is the $15,066,000 dedicated to programmatic initiatives. Of that 
amount, $4,986,000 will be dedicated toward Commission employee training, 
enforcement, and spectrum management initiatives. Due to national security needs 
identified since September 11, 2001, the Commission also will spend $1,000,000 to 
improve internal security and support other security efforts. The remainder of these 
funds, $9,080,000, will improve information technology critical to supporting program 
performance initiatives. With these funds, the Commission will improve existing systems 
to ensure compliance with Government-wide standards pertaining to system security, 
accessibility, and financial management.

In addition to the policy objectives and reform outlined in my testimony, our specific 
objectives for this funding include:

? Continued expansion of electronic filing and other initiatives to enhance public access 
and expedite Commission policy decision-making;
? Improved technical and economic expertise of staff;
? Life-cycle replacement of technical monitoring and testing equipment;
? Ongoing infrastructure improvements to Columbia laboratory facility;
? Expeditious and effective response to public requests for assistance and information; 
? Enhancement of information technology infrastructure to make it responsive to
      changes in the industry; and,
? Enable the FCC to improve its homeland security posture.

One of the Commission's main objectives during the next year is to maintain a 
safe and secure working environment for the FCC's employees and visitors who frequent 
the Commission. As with most other agencies, the Commission has faced the fallout from 
September 11, 2001, with unanticipated costs. This year we must provide enhancements 
to a variety of activities and programs, including on-site physical security; relocation and 
processing of mail at multiple off-site locations; and systems upgrades to ensure that our 
information technology infrastructure has adequate cyber-security safeguards. Although 
we have $1,000,000 specifically set-aside for these projects in Fiscal Year 2003, the 
Commission also has requested the use of excess regulatory fees collected in previous 
years for Fiscal Year 2002 security needs. In addition to receiving full funding, we would 
appreciate a favorable decision related to this request.

Without adequate support, we will be required to eliminate some of the 
Commission's programmatic initiatives, or cut back on the implementation of individual 
programs. I believe that I already have made the hard choices necessary to operate the 
Commission on as tight a budget as practicable. As I outlined in the first part of my 
testimony, the infrastructure and manpower initiatives are interconnected to the general 
health of the agency and the completion of its core mission.

CONCLUSION

The Federal Communications Commission has been using, and continues to use 
responsibly its financial resources to meet the needs of a dynamic regulatory, economic, 
and technological environment. This past calendar year, the Commission's staff has 
handled a new workload based on national exigencies, worked toward improving overall 
agency management, and initiated a restructuring process designed to ensure that the 
Commission of today is prepared for the regulatory mission of tomorrow. The 
Commission's budget request is a reflection of an imperative need. We have trimmed the 
fat and focused all available resources to follow through on much needed rulemaking 
matters, reform and restructuring, and other essential programmatic needs. I respectfully 
request that this Subcommittee grant the Commission its full funding request for Fiscal 
Year 2003.

Thank you. I would be happy to answer any questions this Subcommittee may 
have.