May 2012

Federal Bureau of Investigation Director Robert Mueller suggested to lawmakers that the agency is weighing “some form of legislation” that could require Internet service providers and other companies to ensure their systems are compatible with federal wiretap orders.

Mueller made his remarks in response to a question by Senate Judiciary Committee Chairman Patrick Leahy (D-VT) at an agency oversight hearing. Chairman Leahy cited recent reports suggesting the FBI desires a way to “require Internet service providers and other online services to make their [services] amenable to government surveillance,” but told Mueller that “the Administration has not sent any up here.” Mueller said lawmakers could expect recommendations on revising the law in question soon — but he also criticized recent press reports for a “distortion of what our needs are.”

The House Commerce Committee’s Subcommittee on Communications and Technology held an oversight hearing on American Recovery and Reinvestment Act broadband grants and loans. Recipients of 233 National Telecommunications and Information Administration (NTIA) awards worth $4 billion have spent just $1.6 billion of it so far. Less than a dozen of the projects have been completed. Six of the awards worth $124.5 million have been returned or revoked. Recipients of 320 Rural Utility Service (RUS) awards worth $2.4 billion have spent $968 million. Five projects have been completed. As of July 2011, $124 million in grants and $35 million in loans have been rescinded or revoked. Allegations also persist that NTIA and RUS funds are not bringing broadband to unserved areas but instead are subsidizing competitors to overbuild privately financed networks.

The hearing featured four witnesses: Larry Strickling, head of the National Telecommunications & Information Association, which has been dispensing billions in stimulus package broadband aid; Jonathan Adelstein, former Federal Communications Commission (FCC) commissioner and head of RUS, which has been doing the same; Todd Zinser, inspector general of the Commerce Department (NTIA is under Commerce); and David Gray, deputy inspector general of the Department of Agriculture. They faced tough questioning from Republican members of the Subcommittee. Republicans focused on money that had been rescinded, what they saw as the slow progress of build-outs and spending, and complaints of overbuilding existing service, an issue near and dear to the hearts of cable operators. Subcommittee Chair Greg Walden (R-OR) called overbuilding "a perennial concern" and Rep. Lee Terry (R-NE), vice chair, said it had been a question "since day one." Rep. Charles Bass (R-NH) said he wanted to make sure funds were being spent where they were supposed to be. He did not want to be holding "embarrassing" hearings at a later date about abuses in the program. He said the build-outs should be going where they are needed, not paralleling existing capacity.

Ranking Member Anna Eshoo (D-CA) defended the RUS awards saying the funds had made "real progress" in creating jobs and economic opportunities. She suggested that some of the Republicans were simply trying to "relitigate" the stimulus package, which they had opposed.

The Republican Members also demanded answers on how West Virginia was allowed to spend millions of dollars on high-end network equipment for libraries the GOP says had little need for it. Chairman Walden pointed to an article from The Charleston Gazette about the state's use of its BTOP grant. He called it “pretty disturbing” that the state used $24 million of the $126 million grant to buy high-end Cisco routers, designed for networks with upwards of 500 computers, at libraries with only two or three computers installed. “What is NTIA doing about it?” he asked. “Don't believe everything you read in the newspaper,” Strickland responded. Each router cost $12,000, he said, and some are going to institutions with heavy needs such as hospitals and universities. Determining capacity for every institution needing a router would cost more than purchasing “scalable, expandable gear,” he said. Some institutions may not ever need full capacity, but “many of those anchor institutions may benefit” from the routers, Strickland said. “The state made an economical decision that is well-justified by the facts,” he said.

Strickling also found himself defending the agency's decision last week to put a partial hold on seven broadband public safety network projects, including ones funded through broadband grants. Strickling was hit with questions from Republican legislators from states -- Mississippi, Louisiana and Texas -- whose projects had gotten the word to stand down, at least until NTIA vets them against plans for a national interoperable broadband public safety network, now being dubbed FirstNet, which NTIA is helping oversee. He said that NTIA would vet those works in progress against the FCC interoperability standards, but that even that would not necessarily be a green light to proceed. He said he thought it would be a waste of taxpayer money to spend those millions on the chance that it will be interoperable with the system FirstNet ultimately comes up with.

An executive of the holding company owned by Google executives that leases a hangar at a government airfield responded to questions from Sen. Chuck Grassley (R-Iowa), saying Google has nothing to do with the aircraft in question.

Ken Ambrose, vice president of H211, the holding company owned by Google executives Larry Page and Sergei Brin that owns several aircraft stored at California's Moffett Airfield, a former naval air station now operated by NASA, told Grassley in a letter that "these are not Google corporate aircraft. They are privately owned and operated by principal executives of the company." Ambrose also tells Sen Grassley that H211 pays "above market rent" for the hangar at Moffett, and that the company has operated more than 150 scientific flights for NASA. A Google spokesman said that the aircraft are fitted with NASA equipment for these flights. Ambrose responded to concerns that the Google executives are purchasing fuel at a reduced price by telling Sen Grassley that the only fuel available at the field is controlled by a Defense Department contractor, "so that is the fuel we use."

As a result of comprehensive reforms of the Lifeline program over the last year, the Federal Communications Commission released new data about efforts to eliminate duplicate subscriptions and save tens of millions of dollars.

The data revealed another $15 million in savings will be gained by eliminating 135,000 duplicative subscriptions in three states: Missouri, New York and Washington. In 2011, FCC audits identified and eliminated over 270,000 duplicate Lifeline subscriptions, saving $35 million. The FCC is also moving ahead to develop a comprehensive subscriber database that, when launched in 2013, will safeguard against duplicate subscriptions. Overall, the Lifeline reforms to cut waste, fraud and abuse are expected to save $2 billion over three years.

In addition, the FCC on April 1 largely eliminated the “Link Up” program, which the Commission concluded had become wasteful and unnecessary. Link Up paid companies up to $30 for initial phone connections even though other companies are now enrolling new subscribers for free. Elimination of Link Up on non-Tribal lands is expected to save $100 million annually. Further reforms are helping ensure that only eligible consumers are enrolled, and will step up audits of Lifeline providers.