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FCC FY 2011 Summary of Performance and Financial Information

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Released: February 14, 2012
FY 2011 Summary of
Performance & Financial Information

Federal

Communications

Commission


fcc.gov :: February 2012

Message from Our Chairman
I am pleased to present the Federal Communications
Commission’s (FCC) Summary of Performance and Financial
FY 2011
Results. This report is intended for a general audience of
consumers, businesses, and other stakeholders. My goal
in publishing this summary is to increase our agency’s
accountability by making financial and performance
information transparent and accessible to all citizens.
Performance
The FCC’s work centers on communications
education, health care, energy, and public
networks and technology, which can connect
safety, to name a few. If we can harness the
our country, increase opportunity and
power of broadband to tackle these challenges
prosperity, spur American competitiveness
and seize these opportunities, we will make
and global leadership, strengthen our
a positive difference in the lives of this and
Summary
democracy, protect public safety, and in so
future generations.
many ways transform lives for the better.
This report contains a summary of the progress
Our mission is to harness the power of
the FCC made during Fiscal Year (FY) 2011
broadband Internet to drive economic
in meeting the key challenges facing the
growth and benefit all Americans.
agency and an assessment of the financial
With each passing day, communications
management of the FCC. I am pleased to
devices and networks become more essential
note that for the sixth consecutive year, the
to the fabric of the daily lives of all Americans.
FCC obtained an unqualified or “clean” audit
They are how we receive news, information,
opinion on its financial statements. A more
and entertainment; how we stay in touch
detailed view of the Commission’s financial
with our friends and family; how we work at
statements can be found in the FY 2011 Agency
and run our businesses, large and small; how
Financial Report, located athttp://www.fcc.gov/encyclopedia/fcc-strategic-plan"> http://www.fcc.
we communicate and coordinate in times of
http://www.fcc.gov/encyclopedia/fcc-strategic-plan">gov/encyclopedia/fcc-strategic-plan. This is
emergency; and how we—and people across
also the location where you can find the FY
the globe—learn about and participate in our
2011 Annual Performance Report, which
government and express our views.
provides a comprehensive look at the FCC’s
accomplishments for the fiscal year.
Our country faces a number of significant
challenges and opportunities for which
— Julius Genachowski
communications—and broadband Internet in
Chairman
particular—play an essential role: our economy,
February 2012

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Overview of the
Federal Communications Commission
About the FCC
The Federal Communications Commission (FCC or Commission) has chosen
The FCC is an independent regulatory
of a previous Commissioner. Only three
to produce this Summary of Performance and Financial Information to provide
agency of the United States Government.
Commissioners can be of the same political
The Commission was established by the
party at any given time and none can have a
a citizen-friendly document summarizing the FCC’s financial status and
Communications Act of 1934 and is charged
financial interest in any company or entity
with regulating interstate (between states)
that has a significant interest in activities
performance for Fiscal Year 2011 (October 1, 2010 through September 30,
and international communications by
regulated by the Commission. The President
2011). We do this in recognition that members of the public, particularly our
radio, television, wire, satellite, and
designates one of the Commissioners to serve
cable. The Commission also regulates
as Chairman.
key constituencies, are stakeholders in the work and the results of our agency.
telecommunications services for hearing-
The Chairman and the Commissioners at
Our goal is to increase the transparency and accessibility of the FCC and
impaired and speech-impaired individuals,
the end of FY 2011 were:
as set forth in Title IV of the Americans with
increase the accountability of the Commission to you, the citizens of the
Disabilities Act (ADA). The Commission’s
 Chairman Julius Genachowski
United States.
headquarters is located in Washington, D.C.,
 Commissioner Michael J. Copps
with three regional offices, sixteen district
 Commissioner Robert M. McDowell
offices, and nine resident agent offices
 Commissioner Mignon Clyburn
This Summary document may lead you to seek
its Annual Performance Report for FY 2011.
throughout the Nation.
additional information concerning the FCC’s
Both are available online on the Commission’s
There was one Commissioner position that
finances and performance. The Commission
Web site at http://www.fcc.gov/encyclopedia/fcc-strategic-plan. ">www.fcc.gov/encyclopedia/
Five commissioners direct the work of the
was vacant at the end of FY 2011. Additionally,
has published its Agency Financial Report and
http://www.fcc.gov/encyclopedia/fcc-strategic-plan. ">fcc-strategic-plan.
FCC. All are appointed by the President and
Commissioner Michael J. Copps resigned his
confirmed by the Senate for 5-year terms,
position at the FCC effective January 1, 2012.
except when filling the unexpired term
Pictured from left to right are commissioner clyburn, commissioner copps, chairman Genachowski, and commissioner mcDowell.

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Mission
Organizational Structure
As specified in the Communications Act, the Commission’s mission is to “make
The FCC Chairman leads the Commission as head of the agency. In order to
available, so far as possible, to all the people of the United States, without
accomplish its mission, the FCC is organized by function. There are seven Bureaus
discrimination on the basis of race, color, religion, national origin, or sex, rapid,
and ten Offices. The Bureaus and the Office of Engineering and Technology
efficient, Nation-wide, and world-wide wire and radio communication service
process applications for licenses to operate facilities and provide communications
with adequate facilities at reasonable charges.”1 In addition, the Communications
services in specific locations and on specific radio frequencies; analyze complaints
Act provides that the Commission was created “for the purpose of the national
from citizens and other licensees; conduct investigations; develop and implement
defense” and “for the purpose of promoting safety of life and property through
regulatory programs; and participate in hearings. Generally, the nine other Offices
the use of wire and radio communications.” 2
provide specialized support services. Bureaus and Offices regularly join forces
and share expertise in addressing FCC-related issues.
1 47 u.S.c. § 151.
2 Id.
the BureauS
global spectrum activities and advocating U.S.
interests in international communications and

The Consumer and Governmental Affairs

competition. The Bureau works to promote a

Bureau

develops and implements the FCC’s
high-quality, reliable, globally interconnected,
consumer policies, including disability
and interoperable communications infrastructure.
access and policies affecting Tribal nations.

The Media Bureau

recommends, develops, and
The Bureau serves as the public face of the
administers the policy and licensing programs
Commission through outreach and education,
relating to electronic media, including radio
as well as through the Consumer Center, which
and broadcast, cable, and satellite television in
is responsible for responding to consumer
the United States and its territories.
inquiries and complaints. The Bureau also
maintains collaborative partnerships with

The Public Safety and Homeland Security

state, local, and Tribal governments in such

Bureau

supports initiatives that strengthen
critical areas as emergency preparedness and
public safety and emergency response
implementation of new technologies.
capabilities to better enable the FCC to assist
the public, law enforcement, hospitals, the

The Enforcement Bureau

enforces the
communications industry, and all levels of
Communications Act and the FCC’s rules.
government in the event of a natural disaster,
The Bureau protects consumers, ensures
pandemic, or terrorist attack.
efficient use of spectrum, furthers public
safety, and promotes competition.

The Wireless Telecommunications Bureau

is
responsible for wireless telecommunications

The International Bureau

administers the
programs and policies in the United States
FCC’s international telecommunications and
and its territories, including licensing of
satellite programs and policies, including
wireless communications providers. Wireless
licensing and regulatory functions. The
communications services include cellular,
Bureau promotes pro-competitive policies
paging, personal communications, and other
abroad, coordinating the Commission’s

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Organizational Chart
radio services used by businesses and private

The Office of the General Counsel

serves as
c o m m i s s i o n e r s
citizens. The Bureau also conducts auctions of
the Commission’s chief legal advisor.
Julius genachowski, chairman
licenses for the communications spectrum.

The Office of the Inspector General

conducts
michael J. copps* robert m. mcDowel mignon clyburn

The Wireline Competition Bureau

develops
and supervises audits and investigations
and recommends policy goals, objectives,
relating to FCC programs and operations.
office of the inspector general
office of administrative law Judges
programs, and plans on matters concerning

The Office of Legislative Affairs

serves as the
wireline telecommunications (e.g., telephone
office of engineering
office of
office of the
office of
liaison between the FCC and Congress, as well
& technology
general counsel
m a n a g i n g d i r e c t o r
media relations
landlines, and fixed—as opposed to mobile—
as other Federal agencies.
broadband), striving to ensure choice,
electromagnetic
administrative law Division
human resources mgmt.
media Services Staff
compatibility Division
opportunity, and fairness in promoting the

The Office of the Managing Director

litigation Division
infor. technology center
internet Services Staff
laboratory Division
development and widespread availability of
administers and manages the FCC.
Financial operations
audio-Visual Services Staff
Policy & rules Division
such communications services. The Bureau
administrative operations

The Office of Media Relations

informs the
administrative Division
has particular responsibility for the Universal
Perf. eval. & records mgmt.
media of FCC decisions and serves as the FCC’s
Service Fund, a public-private partnership
Secretary
main point of contact with the media.
that helps connect all Americans to
communications networks.

The Office of Strategic Planning and

office of
o f f i c e o f

Policy Analysis

works with the Chairman,
strategic planning &
c o m m u n i c at i o n s
office of
office of
b u s i n e s s
workplace diversity
legislative affairs
Commissioners, Bureaus, and Offices in
policy analysis
o p p o r t u n i t i e s
the oFFiceS
strategic planning and policy development
for the agency. It also provides research,
consumer &
wireless

The Office of Administrative Law Judges

is
advice, and analysis of complex, novel, and
governmental
telecommunications
media bureau
enforcement bureau
affairs bureau
bureau
composed of judges who preside over hearings
non-traditional economic and technological
and issue decisions on matters referred to
communications issues.
admin. & mgmt. office
mgmt. & resources Staff
mgmt. & resources Staff
office of management &
them by the Commission.
consumer inquiries &
resources
auctions & Spectrum
office of comm. & industry

The Office of Workplace Diversity

ensures that
complaints Division
access Division
information
telecommunications

The Office of Communications Business

the FCC provides employment opportunities
off. of native affairs & Policy
consumers Division
technologies, Systems &
Policy Division

Opportunities

promotes competition and
for all persons regardless of race, color, sex,
reference information ctr.
innovation Div.
Spectrum enforcement
industry analysis Division
Division
innovation in the provision and ownership of
national origin, religion, age, disability, or
Disability rights office
Spectrum & competition
engineering Division
Policy Division
market Disputes resolution
telecommunications services by supporting
sexual preference.
consumer affairs &
office of Broadcast license
Division
mobility Division
opportunities for small businesses as well as
outreach Division
Policy
Detailed information on specific Bureau and
investigations & hearings
Broadband Division
women and minority-owned communications
office of intergovernmental
audio Division
Division
Office responsibilities can be found in Title 47
affairs
businesses.
Video Division
regional & Field offices
of the Code of Federal Regulations and on the
Web & Print Publishing Div.

The Office of Engineering and Technology

Commission’s Web site at:http://www.fcc.gov"> www.fcc.gov. The
advises the Commission on technical and
Commission’s organizational chart at the end
wireline
public safety &
competition
international
homeland security
engineering matters. This Office develops
of FY 2011 is included on the next page.
bureau
bureau
bureau
and administers FCC decisions regarding
admin. & mgmt. office
administrative &
management &
spectrum allocations and grants equipment
competition Policy Division
management office
administrative Staff
authorizations and experimental licenses.
Pricing Policy Division
Policy & licensing Division
Policy Division
telecommunications access
cybersecurity & communi-
Satel ite Division
*note:
Policy Division
cations reliability Div.
Strategic analysis &
commissioner
industry analysis &
operations & emergency
negotiations Divisions
michael J. copps
technology Division
management Division
resigned his
emergency response &
position at the
interoperability center
Fcc effective
January 1, 2012.

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FCC Field Offices
Strategic Goals and Objectives

The Commission has multiple regional and
representation of the Commission before
The Commission has identified six long-term strategic goals that serve as
field offices as well as resident agent locations
groups and organizations. In addition, the FCC
throughout the United States. The Regional
maintains a laboratory in Columbia, Maryland
guidance directing the actions and performance of the FCC.
and Field Offices and resident agents are
so that staff of the Office of Engineering and
responsible for carrying out on-scene investi-
Technology can test, evaluate, and perform
The agency’s success in accomplishing
to achieve these goals, can be found in the
gations, inspections, audits, and other matters
engineering analyses on communications
these goals is measured by the progress
Commission’s strategic plan at:http://www.fcc.gov/encyclopedia/fcc-strategic-plan"> www.fcc.gov/
that are the subject of complaints and that are
equipment requiring Commission authori-
and completion of annual performance
http://www.fcc.gov/encyclopedia/fcc-strategic-plan">encyclopedia/fcc-strategic-plan. Please note that
referred to them from within the Enforcement
zation for use. The FCC also has a facility in
goals during the fiscal year. There are
the goals shown below were the FCC’s strategic
Bureau or by other Bureaus and Offices. These
Gettysburg, Pennsylvania housing portions
external influences, including economic,
goals during FY 2011. The Commission issued a
functions include immediate response to
of its Wireless Telecommunications Bureau’s
legal, and organizational factors, beyond the
new FCC Strategic Plan in February 2012 with
safety-of-life issues, interference resolution,
licensing and spectrum auctions staff and a
Commission’s programs and efforts that may
revised goals for the period FY 2012 through
investigation of violations in all communications
portion of the FCC’s National Call Center
influence whether the Commission fully meets
FY 2016. The FCC will report on its performance
services, surveys for compliance with FCC
operated by the Consumer and Governmental
every performance goal. Further details on the
toward the new strategic goals in future
rules, local assistance to other agencies or
Affairs Bureau. Below is a map of all Commission
Commission’s strategic goals during FY 2011,
documents. The new Strategic Plan is publicly
countries in communications matters, and
Field Offices and resident agent locations.
as well as the strategies and resources used
available at the same Web site noted above.
StrateGic Goal
oBJectiVe


broadband
Work to ensure that al americans have increased access to robust, reliable and affordable
broadband with universal broadband as our ultimate goal.
consumers
empower consumers by ensuring that they have the tools to make informed decisions and
chal enge unfair business practices.
competition and
Promote a competitive dynamic for communications and media services that fosters
innovation
research, innovation, and job creation, and presents consumers with reliable, meaningful
choice in affordable services.
make the Fcc a model for excel ence in government by being data-driven in our
continual improvement decisionmaking and committing to a transparent and participatory process that
encourages public involvement and feedback.
public safety and
Promote the availability of reliable, interoperable, redundant, and rapidly restorable critical
homeland security
communications infrastructures that are supportive of al required services.
international
commit to greater international engagement and cooperation.

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Performance Highlights for FY 2011
Broadband
During the previous fiscal year, the Commission made significant progress toward
Work to ensure that all Americans have increased access to robust, reliable,
accomplishing its performance goals. Greater detail on these accomplishments is
and affordable broadband with universal broadband as our ultimate goal.
available in the FCC Annual Performance Report (APR) for FY 2011 which can be
found on the Commission’s Web site at http://www.fcc.gov/encyclopedia/fcc-strategic-plan">www.fcc.gov/encyclopedia/fcc-strategic-
Broadband has become the engine driving
While the infrastructure of high-speed
economic opportunity for individuals, small
Internet is unavailable to those Americans,
http://www.fcc.gov/encyclopedia/fcc-strategic-plan">plan. In the discussion below, we identify achievements in the Commission’s major
businesses, and communities. It enables
the FCC report also found that approximately
initiatives during the past fiscal year, organized by strategic goal.
existing businesses to boost productivity and
one-third of Americans do not subscribe
efficiency, reach customers in new markets,
to broadband, even when it’s available.
and develop new products and services,
The report identified barriers to adoption
thus expanding markets to reach customers
such as cost, low digital literacy, and concerns
across the country. Those without access to
about privacy. Despite these continuing
broadband are becoming more isolated from
challenges, significant progress has been
the modern American economy. The latest
made over the past few years. The private
Broadband Progress Report issued by the FCC
sector continues to invest tens of billions of
in May found that approximately 26 million
dollars in broadband infrastructure each
Americans, mostly in rural communities
year ($65 billion in capital expenditures in
located in every region of the country, are
2010 alone), expanding capacity, increasing
denied access to the jobs and economic
speeds, and rolling out next-generation mobile
opportunity made possible by broadband.
services like 4G.

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The Commission addressed the affordability
available in spectrum auctions. The proposed
The agency launched an innovative program

and availability of broadband services by
rules would enable television broadcasters to
during FY 2011 for schools and libraries

adopting rules to streamline access and
opt to share channels by further utilizing the
in 14 states, aimed at giving participating

reduce costs for attaching broadband lines
technical capabilities that became available
students in grades K through 12 off-premises

and wireless antennas to utility poles, a key
following the transition to digital television in
connections to the Internet to increase access

component of broadband infrastructure. The
2009. In September, the FCC also announced
to digital textbooks, cutting-edge interactive

FCC found that the lack of timelines for access
a 45-day public trial of a database system to
learning tools, and other innovative wireless

to poles, the resulting potential for delay in
identify unused television band channels that
technologies. The new FCC wireless pilot

attaching broadband equipment to poles,
are available for unlicensed devices. Unused
project, “Learning On-The-Go,” will provide

and the absence of adequate mechanisms
spectrum between TV stations, called white
up to $9 million for schools and libraries

to resolve disputes creates uncertainty that
spaces, represents a valuable opportunity
selected for the 2011-2012 funding year.

deters investment in broadband networks.
for more efficient use of spectrum because
The Commission received 94 applications

In addition, widely varying and unnecessarily
it can be used for unlicensed services.
and, in March, announced the initial

high pole rental rates further discourage
Unlicensed services are a powerful platform
selected project participants. The 20 selected

broadband deployment. To address these
for innovation and experimental use. The
projects include initiatives to improve off-

concerns, the FCC comprehensively reformed
result of innovation on unlicensed spectrum
campus access to e-textbooks for students;

its pole attachment rules for the first time
has already led to a wave of new consumer
connectivity for netbooks for students

since the 1990s. The rules fairly compensate
technologies, including Wi-Fi and other
living in remote, isolated areas; and access

utility pole owners for use of their poles and
innovations like baby monitors and cordless
to flexible, online education programs for
as an open network enabling consumer choice,
toughen penalties which will deter potentially
phones that have generated billions of dollars
home-bound students unable to attend classes.
freedom of expression, user control, competition,
dangerous unauthorized attachments on poles.
in economic growth.
Digital textbooks never go out of date and
and the freedom to innovate. The new rules
The explosive growth in mobile communications
The FCC released a report during FY 2011
students will have greater opportunities to
require all broadband providers to publicly
threatens to outpace the infrastructure on
on the state of broadband connectivity at
access the latest educational curriculum
disclose network management practices and
which it relies. Specifics of this situation were
schools and libraries receiving funds from the
available. Digital tools also help parents,
they restrict broadband providers from blocking
detailed in an FCC white paper entitled,
Federal E-rate program; this program provides
allowing them to better monitor and evaluate
lawful Internet content and applications. The
“Mobile Broadband: The Benefits of Additional
support to help connect schools and libraries
how their children are doing and where they
rules ensure continued Internet openness
Spectrum.” This forecast of mobile broadband
to the Internet. The report is based on data
need more help. The FCC also opened the door
while making clear that broadband providers
market trends detailed the looming spectrum
from a survey of schools and libraries that
to “School Spots” where schools have the option to
can effectively manage their networks and
crunch in a concrete, data-driven fashion.
examined the challenges they face related to
provide Internet access to the local community
respond to market demands.
Key findings of the paper were that mobile
broadband use. The survey found that while
after students go home, which can bring the
A recent FCC survey found that 80 percent
broadband growth is likely to outpace
respondents have some broadband capabilities,
benefits of high speed broadband to people
of consumers did not know the speed of the
the ability of technology and network
nearly 80 percent of all survey respondents
who otherwise lack access to the Internet.
broadband service they purchased from their
improvements to keep up, and within the
said their broadband connections did not fully
In 2009, the FCC launched a public process to
Internet Service Provider. Even if consumers
next 5 years the spectrum deficit is likely to
meet their current needs. Of that group, 55
determine what actions might be necessary to
examine their bills, details about broadband
approach 300 megahertz.
percent cited slow connection speed as the
preserve the characteristics that have allowed
speed often remain unclear. As a result, in
primary reason current Internet connectivity
An important step was taken by the
the Internet to grow into an indispensable
conjunction with the release of an FCC report
did not meet their needs. This is a growing
Commission to meet the nation’s demand for
platform supporting our nation’s economy and
titled Measuring Broadband America, the
concern for schools, as 56 percent of the survey
innovative wireless broadband services by
civic life. Through a public rulemaking process
agency initiated new consumer resources,
respondents expect to implement or expand
adopting a

Notice of Proposed Rulemaking


that included input from more than 100,000
including an on-line “Broadband Speed Guide”
the use of digital textbooks in the next 2 to
(NPRM) proposing that wireless broadband
individuals and organizations and several
and a consumer’s guide on “Broadband Service
3 years, and 45 percent expect to implement
providers have equal access to television
public workshops, the Commission adopted
for the Home”, to help Americans better
or expand the use of handheld devices for
broadcast frequencies that could become
rules to preserve and protect the Internet
understand broadband speeds, assess their
educational purposes.

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Consumers
home needs, choose the right package and
informed choices, companies will likely invest
evaluate broadband performance. The report
in new products, services and business models
found that, for most major wireline broadband
to compete more aggressively and offer greater
Empower consumers by ensuring that they have the tools to make informed
providers, actual speeds are generally 80 to
value. The chart below, from the Measuring
decisions and challenge unfair business practices.
90 percent of advertised speeds or better,
Broadband America report, serves as a guide
although performance varies by technology
to help households determine the minimum
The mobile broadband revolution is well under
The FCC proposed rules that would require
and service provider. By shining a spotlight
level of broadband service they may need
way. New mobile technologies are changing
customer notification, such as voice or text
on actual versus advertised speeds, the FCC is
from their provider.
the way people live. Making sure consumers
alerts, when the customer approaches and
ensuring accountability. If consumers make
have the tools and information they need to
reaches monthly limits that will result in
navigate this changing landscape has been
overage charges. The proposed rules also would
this chart can be used to compare download speed requirements when using one or more devices at the same time, such as a laptop, tablet,
or game console.
one of the FCC‘s top priorities. During FY 2011,
require mobile providers to notify customers
the FCC proposed new rules to help consumers
when they are about to incur international
h o u s e h o l d b r o a d b a n d g u i d e
by addressing wireless “bill shock,” which
roaming charges and requires providers to
liGht uSe
moDerate uSe
hiGh uSe
an estimated 30 million Americans have
clearly disclose any tools they offer to let
(Basic functions only: email, Web
(Basic functions PLUS one
(Basic functions PLUS more than
experienced based on an FCC study. Wireless
customers set usage limits or review their
surfing, basic streaming video)
high-demand application:
one high-demand application
streaming HD, video
running at the same time)
bill shock occurs when consumers are unaware
usage balances. Toward the end of FY 2011,
conferencing, or online
that they have exceeded the limits on their
the FCC worked with industry leaders and
# oF uSerS
gaming)
voice, text, data, or international plans.

CTIA (The Wireless Association)

to craft




The FCC’s

Consumer Task Force

recommends
modifications to the wireless industry’s Code
1 user or 1 device (e.g., laptop,
tablet, or game console)
Basic
Basic
Medium
these strategies to avoid bill shock:
of Conduct as an alternative to the proposed
2 users or devices at a time
Basic
Basic
Medium/Advanced
3 users or devices at a time
Basic
Basic/Medium
Advanced
strategies to avoid bill shock
4 users or devices at a time
Basic/Medium
Medium
Advanced
understand your cal ing pattern and ask your carrier for a plan that works best for your kind of phone use.
Basic Service = 1 to 2 mbps*
*mbps (megabits per second) is the standard measure of
if you are an infrequent phone user, consider a pre-paid plan.
medium Service = 6 to 15 mbps
broadband speed. it refers to the speed with which information
these plans make it very difficult to go over your set limit.
advanced Service = more than 15 mbps
packets are downloaded from, or uploaded to, the internet.
understand what your roaming charges are and where you wil incur them.
The FCC continued its efforts to increase
concerns are considered in all Commission
understand your options for data and text plans.
broadband deployment and adoption on
proceedings related to broadband, developing
Tribal lands by creating the

Native Nations

additional recommendations for promoting
if you are travel ing international y, ask your carrier beforehand what charges may apply.

Broadband Task Force

with representatives
broadband deployment and adoption on
ask how your carrier can help you avoid bil shock – with phone or text alerts,
from 19 tribes who bring unique knowledge
Tribal lands, and coordinating with external
by letting you monitor your account online, or by providing you other information.
about telecommunications challenges on
entities, including other Federal departments
Tribal lands. The Task Force will be responsible
and agencies.
if you have tried to resolve a bil ing issue with your carrier and cannot reach an acceptable resolution,
for eliciting input to ensure that Native
contact the Fcc consumer center, tol free, at 1-888-call-Fcc (1-888-225-5322),
or file a complaint at www.fcc.gov/complaints.

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regulations. The result was a voluntary
penalties against four companies that appear
consumers may file complaints with the
with a broad range of recommendations.
agreement that provides the same kind of
to have unlawfully billed tens of thousands
FCC and provide the Commission’s contact
The staff-level report, titled Information
consumer protections that the FCC’s proposed
of consumers for unauthorized charges, a
information for the submission of complaints.
Needs of Communities: The Changing Media
rules would have ensured.
practice known as “cramming.” Cramming
Landscape in a Broadband Age, found that
Enforcement has been at the core of the
occurs when a company places charges on a
the Internet has enabled an unprecedented
Enforcement of the FCC’s rules provides
Commission’s agenda to protect consumers.
consumer’s phone bill without authorization.
free exchange of ideas and information,
consumers with confidence that they
In addition to the specific examples noted above,
They are often buried in multi-page phone
empowering individuals with a wealth of new
are being protected from fraudulent and
the Commission has focused considerable
bills and have misleading labels that make it
information to better inform decision-making
misleading practices. The FCC’s

Enforcement

resources on enforcing those rules that directly
difficult for a consumer to detect them. The
and promote more accountable government.

Bureau

announced a historic consent decree
impact consumers. Areas of activity concerning
Commission took action to protect Americans
Key recommendations in the report included
with Verizon Wireless, including a record
consumers include, among others, closed
from “mystery fees” and “cramming” by
streamlining disclosures about local
$25 million payment to the U.S. Treasury,
captioning, telecommunications relay service,
proposing rules that would require landline
programming and discouraging “pay-for-
regarding “mystery fees” the company
privacy of customer information, junk faxes,
telephone companies to notify subscribers
play” arrangements in which TV stations
charged its customers over the last several
do-not call violations, and prepaid calling cards.
clearly and conspicuously, at the point of
allow advertisers to dictate on-air content
years. The payment was the largest in FCC
The Commission proposed forfeitures for
sale, on each bill, and on their Web sites, of
without informing viewers by requiring online
history and the settlement concluded the
four companies believed to be using deceptive
the option to block third-party charges from
disclosure of such arrangements.
agency’s 10-month investigation into these
marketing practices to sell prepaid calling
their telephone bills if the carrier offers that
overcharges. In addition to Verizon Wireless’s
cards, scamming consumers out of millions of
The overwhelming majority of digital cable
option. The proposed rules also strengthen
payment to the Treasury, the company made
dollars, mostly from low-income and minority
subscribers currently lease set-top boxes from
the Commission’s requirement that third-
refunds to approximately 15 million customers
communities.
their cable providers, making it increasingly
party charges be separated on bills from the
and ensured that consumers are no longer
important to stimulate competition and
telephone company’s charges. In addition, the
The Commission works diligently to assist
charged the mystery fees. Similarly, the
innovation in set-top boxes. Further
rules would require both landline and wireless
individual consumers. During this fiscal
agency proposed a total of $11.7 million in
innovation will lead to greater choice, lower
telephone companies to include a notice that
year, the Commission processed over 290,000
prices, and more capability. In October 2010,
“informal” consumer complaints and responded
the Commission adopted rules to remedy
to over 370,000 consumer inquiries.
current issues with set-top boxes using
In addition, the Commission conducts

CableCARDs

by ensuring that retail devices
educational outreach at major consumer
have access to all video programming that is
and educational conventions such as AARP
prescheduled by the programming provider;
and the American Library Association.
making CableCARD pricing and billing more
In 2010, the FCC initiated a staff-level
transparent; and streamlining CableCARD
working group to identify trends and
installations. These actions were intended
make recommendations on how the
to unleash video innovation and consumer
information needs of communities can be
choice in equipment.
met in a broadband world. The working
The FCC has taken several actions as part of
group included journalists, entrepreneurs,
its ongoing efforts to implement the

Twenty-

scholars, and government officials. The group

First Century Communications and Video

interviewed more than 600 individuals and

Accessibility Act of 2010 (CVAA)

. The CVAA
organizations, collected over 1,000 public
is considered the most significant piece of
comments, reviewed existing research, held
accessibility legislation since the passage of
multiple hearings, and visited newsrooms
the Americans with Disabilities Act in 1990,
across the country. On June 9, 2011, the
modernizing existing communications laws
group issued an in-depth analysis of the
to ensure that people with disabilities are
current state of the media landscape along
able to share fully in the economic, social,

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and civic benefits of broadband and other
to continue serving Americans who use it.
Congress passed the

Truth in Caller ID Act

complaints between April 2010 and March
21st century communication technologies.
VRS enables persons who use American
and directed the FCC to adopt rules implementing
2011 regarding incoming calls that are
The Commission adopted rules to ensure that
Sign Language to communicate with other
the Act. Under the FCC’s new rules violators
delayed, never completed, of poor quality, or
the 54 million individuals with disabilities
individuals who do not know ASL through
are subject to up to $10,000 for each violation,
lack accurate caller ID information. Failed or
living in the United States are able to fully
a broadband connection using a video link.
or three times that amount for each day of
degraded calls not only frustrate consumers,
use advanced communications services,
A communications assistant interprets the
continuing violation, to a maximum of $1
they also pose a serious risk to public safety.
equipment, and networks. The Commission
conversation back and forth between the
million for any continuing violation. The
The Commission proposed rules to implement
also reinstated the video description rules
parties in sign language and voice. The FCC’s
FCC may assess fines against entities it does
the

Commercial Advertisement Loudness

originally adopted by the Commission in
actions are intended to eliminate illegitimate
not traditionally regulate and it can impose

Mitigation (CALM) Act.

Loud commercials on
2000. Video description is the insertion of
payments from the Telecommunications Relay
penalties more readily than it can under other
television are a leading source of consumer
audio-narrated descriptions of a television
Service Fund to providers and ensure that only
provisions of the Communications Act.
complaints to the FCC. The Commission
program’s key visual elements into natural
qualified providers of service are permitted to
The FCC announced the creation of the

Rural

proposed a solution that relieves consumers
pauses in the program’s dialogue, making
receive compensation from the TRS Fund.

Call Completion Task Force

to investigate
of this problem while limiting costs to
video programming more accessible to
The FCC acted on several items to strengthen
and address the growing problem of calls to
TV broadcasters, cable operators, and
individuals who are blind or visually impaired.
and expand communications services to
rural customers that are being delayed or that
other multichannel video programming
The FCC established a

National Deaf-Blind

Native Nations and their communities. The
fail to connect. Rural telephone companies
distributors.

Equipment Distribution Program (NDBEDP)


Commission adopted a Notice of Inquiry
have reported a 2,000 percent increase in
to enable low-income individuals who are
(NOI) on improving communications services
deaf-blind to receive equipment to access
for

Native Nations

, seeking comment on a
21st Century communications services. The
number of issues including greater broadband
pilot program will help ensure that qualified
deployment, the need for a uniform definition
individuals have access to the Internet,
of Tribal lands to be used in rulemakings,
as well as telecommunications, advanced
and the importance of strengthening the
communications, and information services.
FCC’s nation-to-nation consultation process
Finally, the Commission issued a NPRM
with Native Nations. The Commission
seeking comment on proposed rules to enable
approved a NPRM on ways to expand the
the provision of closed captions on video
efficient use of spectrum over Tribal lands
programming delivered over the Internet.
so as to improve access to mobile wireless
This CVAA requirement will apply to any video
communications, providing consumers with
programming delivered via the Internet that
more choices on how they communicate, share
had previously been shown on television with
information, and get their news. Finally, the
captions. The FCC continues to take aggressive
Commission adopted an Order that will help
enforcement action to ensure that individuals
expand opportunities for Tribal entities to
with hearing loss have access to advanced
provide broadcast radio services to Native
telecommunications services as contemplated
communities.
by the wireless hearing aid compatibility rules.
Consumers gained new protections against
As part of its ongoing efforts to ensure that
fraudulent and deceptive use of caller ID
the

Video Relay Service (VRS)

continues to
services under new rules adopted by the FCC.
provide a crucial telecommunications link
Using spoofing services accessible through
for people who are deaf and hard-of-hearing,
the Web or prepaid cards, anyone can
the Commission adopted rules designed to
inexpensively mask the origin of a call with
eliminate the waste, fraud, and abuse in
fake caller identification information. Last
the VRS program that threatened its ability
year, in response to malicious caller ID spoofing,

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Competition and Innovation
Consistent with a key recommendation of the
The Mobility Fund will help improve coverage
FCC’s

National Broadband Plan

, the NPRM
for current-generation mobile wireless service.
Promote a competitive dynamic for communications and media services that
also proposed to include within the CAF a new
The CAF will put America on the path to
Mobility Fund to provide support to accelerate
fosters research, innovation, and job creation, and presents consumers with
universal broadband and advanced mobile
our nation’s ongoing efforts to close gaps
coverage within the existing USF budget,
reliable, meaningful choice in affordable services.
in mobile wireless service. Despite wireless
while reducing ICC charges that are
providers’ efforts, millions of Americans
ultimately passed on to consumers. Benefits
still live, work, and travel in areas where
to consumers include:
Ubiquitous broadband infrastructure has
applications running over fixed and mobile
these advanced services are unavailable.
become crucial to our nation’s economic
broadband networks. Second, control the size
development and civic life. Businesses need
of USF as it transitions to support broadband
broadband to start and grow, adults need
by combating waste and inefficiency as
consumer benefits from the connect america fund
broadband to find jobs, and children need
American consumers and businesses ultimately
Greater
hiGher
broadband to learn. But the FCC’s primary
pay for USF. Third, require accountability from
increaSeD
economic
economic
acceSS to
GraDuation
acceSS
neW JoBS
BeneFitS
GroWth
JoBS
rateS
tools for meeting the great infrastructure
companies receiving support to ensure that






challenge of our time, bringing robust
public investments are used wisely to deliver
affordable broadband to all Americans, have
intended results. Government must also be
18 mil ion
500,000 jobs
rural areas will
Businesses
80% of
high school
americans living related to
attain $700 mil ion across the
Fortune 500
graduation rates
until recently been locked in the last century.
accountable for the administration of USF,
in rural areas will broadband
in annual economic country wil have
companies post for students with

The Universal Service Fund (USF)

, which
including using clear goals and performance
receive access to deployment
benefits from
the opportunity
job openings
broadband at
helped connect rural America to telephone
metrics for the program. Fourth, transition
broadband over
to rural areas
new broadband
to sel to new
online and
home are 6%
service, historically failed to effectively and
to market-driven and incentive-based policies
the next decade.
wil be created
deployment.
customers
require online
to 8% higher
efficiently target support for broadband in
that encourage companies to maximize the
over the next 6
resulting in
applications.
when compared
years.
$50 bil ion in
to students
rural areas. USF had also become wasteful
impact of scarce program resources and
economic growth
without access
and inefficient in some situations, paying
benefits to reach all consumers.
over 6 years.
to broadband.
over $20,000 a year — nearly $2,000 per
In the NPRM, the Commission proposed to
month — in support for a single phone line
modernize and streamline its USF and ICC
for some households, while providing little
policies to bring affordable wired and wireless
or no support in communities that lacked
Another USF program under reform in FY
millions of dollars per year, helping ensure
broadband to all Americans while combating
broadband. In addition, USF is intertwined
2011 was the

Lifeline/Link Up program

.
that Lifeline can reach as many low-income
waste and inefficiency. Under the proposal, the
with the complex system of payments between
This program has provided low-income
consumers as possible.
FCC would create a

Connect America Fund (CAF)


carriers called intercarrier compensation (ICC)
households with discounts on monthly phone
to quickly and efficiently deliver support to
Vigilant management and oversight of the
which makes outdated distinctions between
bills and initial installation charges since
unserved areas. Using market-based policies

E-rate

program led to a civil settlement with
local and long-distance telephone service.
1985. But program rules and administration
to support providers in a technology-neutral
Hewlett Packard (HP) for alleged E-rate fraud.
had not kept pace with significant changes
Building on recommendations contained in
manner, the CAF would target areas where
This followed an extensive investigation
in technology, markets, and regulations.
the

National Broadband Plan

and with
broadband funding will have the biggest
by the FCC and the Department of Justice
A NPRM adopted in March took steps to
extensive input from a wide array of
impact. Intercarrier compensation would
(DOJ). Acting on tips from whistleblowers,
comprehensively reform and modernize the
stakeholders, in February 2011 the Commission
also be reformed to prevent gaming of the
the FCC and the DOJ investigated allegations
program for 21st century communications
adopted a NPRM proposing four key
system while gradually reducing per-minute
that contractors working with HP and other
needs, including strengthening protections
principles to guide reform of USF and ICC.
intercarrier compensation charges, resulting
companies lavished gifts on personnel from
against waste, fraud, and abuse. Then in June,
First, modernize and refocus USF and ICC
in billions of dollars of savings for consumers,
two Texas school districts in order to get
the Commission imposed changes on the
to make affordable broadband available to
and removing disincentives for carriers
contracts that included some $17 million in
program to ensure that that multiple carriers
all Americans and accelerate the transition
to maintain legacy networks rather than
HP equipment. Contractors provided meals
do not get support for serving the same
from circuit-switched to

Internet Protocol (IP)


investing in advanced, efficient IP-based
and entertainment, including trips on a yacht
consumer. The action will save potentially
networks, with voice ultimately one of many
infrastructure.
and Super Bowl tickets, to school personnel

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to get inside information and win contracts
In March, the Commission approved
that were supposed to be awarded through a
the merger of CenturyLink and Qwest
competitive bidding process. As part of the
Communications International. In doing
settlement, HP agreed to pay the government
so, the Commission imposed protections
$16.25 million, most of which will be returned
against the risk of harm to competition and
to the E-rate program.
mandated the launching of a major broadband
adoption program for low-income consumers.
While proposed mergers of media or
These commitments will bring broadband with
communications firms are becoming
actual download speeds of at least 4 Megabits
commonplace, the FCC conducts thorough
per second to at least four million more
reviews of each transaction to ensure that the
homes and businesses and at least 20,000
public interest is protected. In January, the
more anchor institutions, such as schools,
Commission granted approval, with conditions
libraries, and community centers. The merged
and enforceable commitments, to assignments
entity also agreed to significantly increase
and transfers of control of broadcast, satellite,
the availability of higher-speed broadband by
and other radio licenses from General Electric
more than doubling the number of homes and
(GE) to Comcast. The approval allowed GE and
businesses that can receive 12 Megabits per
Comcast to create a joint venture involving
second broadband and more than tripling the
NBC Universal (NBCU) and Comcast. As part
number that can get 40 Megabits per second
of the merger, Comcast-NBCU is required to
broadband.
take affirmative steps to foster competition
in the video marketplace. In addition,
The Commission launched two proceedings
Comcast-NBCU committed to increasing local
during the fiscal year that will help to promote
news coverage to viewers; expand children’s
investment and create jobs by developing
programming; enhance the diversity of
innovative spectrum-efficient technologies
programming available to Spanish-speaking
and services to help meet the growing demand
viewers; offer broadband services to low-
for wireless broadband services. The first
income Americans at reduced monthly prices;
action is a NPRM that seeks to expand the
and provide high-speed broadband to schools,
FCC’s existing

Experimental Radio Service

libraries, and underserved communities.
rules to promote cutting-edge research
The conditions imposed by the FCC address
and foster development of new wireless
potential harms posed by the combination of
technologies, devices, and applications.
Comcast, the nation’s largest cable operator
Specifically, the Commission proposed a new
and Internet service provider, and NBCU
type of license, called a “program license,”
which owns broadcast stations and owns and
which would give qualified entities broad
develops television and film content.
authority to conduct research without the
need to seek new approval for each individual
experiment. The second action is a NOI to
promote wireless innovation by examining
how dynamic access radios and techniques,
which use technology to squeeze the most use
out of available spectrum, can provide more
intensive and efficient use of spectrum.

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Continual Improvement

decisionmaking, modernize Commission
The FCC took steps to expand its Electronic
procedures for the digital age, and enhance
Comment Filing System to include non-
Make the FCC a model for excellence in government by being data-driven in our
the openness and transparency of Commission
docketed proceedings. These electronic
proceedings for practitioners and the public.
filings will provide the public with more
decision making and committing to a transparent and participatory process that
The Commission delegated authority to
information about the workings of the FCC
encourages public involvement and feedback.
the staff to dismiss or deny defective or
and save industry and the agency staff time
repetitive petitions for reconsideration of
and money. The FCC also expanded electronic
Commission decisions and amended the rule
filing of information about rates, terms, and
Continuing to deliver on its promise of
their purview with the goal of eliminating
that authorizes the Commission to reconsider
conditions of telecommunications services
bringing Web 2.0 to government, the
or revising rules that are outdated or place
a decision on its own motion within 30 days
by having competitive local providers and
FCC launched a complete overhaul of the
needless burdens on businesses.
to make clear that the Commission may
other nondominant carriers use the FCC’s
agency’s Web site (www.fcc.gov). Providing
As part of its Data Innovation Initiative, the
modify a decision and not merely set it aside
existing Electronic Tariff Filing System
a more intuitive user experience, the new
FCC launched two proceedings to ensure
or vacate it. The Commission also set a default
for all tariff filings. This creates a uniform
site improves and simplifies FCC.gov for
that it collects the data it needs to make
effective date for FCC rules in the event the
system of online access that not only increases
consumers, government, public safety
sensible policy, streamlines data collection,
Commission does not specify an effective date
transparency for consumers and reduces
agencies, and the business community.
and eliminates unneeded data efforts that
in a rulemaking order. In accordance with
burdens on industry, but also eases tariff
The new FCC.gov is built using a series of
impose unnecessary burdens on filers. The
these changes, the Commission issued a public
enforcement and facilitates tracking of
standards employed across many of the
Commission approved a NPRM to eliminate
notice announcing 1,000 dormant proceedings
industry trends.
Web’s most popular sites, which empowers
20-year-old requirements for certain telephone
that would be terminated if there were no
citizen developers to build off the new FCC.
companies to submit data which may no
objections within 45 days after the list had
gov in innovative ways. By building the new
longer be necessary due to subsequent policy
been published in the Federal Register.
site using an open source, cloud-hosted, and
decisions. The Commission also approved a
scalable architecture, the FCC has leveraged
second NPRM that seeks comment on whether
modern tools as a long-term cost-saving
and how to reform data collection regarding
strategy and lowered the barriers to future
broadband and local telephone service to
development and innovation among other
better serve the agency, consumers, and other
public and private sector Web sites. The
stakeholders after more than a decade of rapid
Commission’s new Web site was shaped by
innovation in the marketplace for these services.
public feedback and sharpened through an
ongoing conversation with users over several
The Commission adopted a NPRM proposing
months. It represents the Commission’s first
to reduce regulatory burdens and streamline
overhaul of its main Web site in more than a
the foreign ownership review process for U.S.
decade.
companies with common carrier radio licenses
(e.g., wireless phone companies) and certain
On August 22, 2011, FCC Chairman Julius
aeronautical radio licenses. The proposals
Genachowski announced the elimination of
would ensure that the Commission continues
83 outdated and obsolete media-related rules,
to receive the information it needs to serve the
including Fairness Doctrine regulations which
public interest while reducing the number of
had not been applied for more than 20 years.
required filings by more than 70 percent.
The elimination of these rules adds to the more
than 50 outdated regulations that were already
In a February Report and Order, the
deleted as part of the Commission’s robust
Commission revised portions of the
regulatory review process. Continuing this
Commission’s Part 1 procedural rules and
effort, Chairman Genachowski directed each
Part 0 organizational rules. These revisions
FCC bureau to conduct a review of rules within
will increase the efficiency of Commission

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Public Safety and Homeland Security

Network outage reports

enable the FCC to

track and analyze information on outages

Promote the availability of reliable, interoperable, redundant, and rapidly
affecting 911 service and determine if action

is needed to prevent future outages from

restorable critical communications infrastructures that are supportive of all
occurring. Analysis of data collected for the

required services.
FCC’s current outage reporting requirements

have led to a reduction in the number of

communications outages and improved the

Access to critical emergency communications
Continuing its efforts to improve the public’s
pace of recovery. For instance, within hours

is a vital need for all Americans. The FCC is
ability to contact emergency services and
of Hurricane Katrina hitting land in 2005,

taking steps to revolutionize America’s 911
to enable public safety personnel to obtain
the Commission’s outage reporting data

system by harnessing the life-saving potential
accurate information regarding the location of
quickly became the Federal government’s best

of broadband communications, including
a 911 caller, the Commission strengthened its
source of information about the conditions of

text, photo, and video in emergencies. These

Enhanced 911 (E911)

location accuracy rules
critical communications infrastructure in the

new technologies have the potential to
for wireless carriers by adopting an Order to
disaster area. Working with communications

revolutionize emergency response by providing
phase out the less stringent network-based
providers, the FCC was able to identify specific
launched an education and outreach campaign
public safety officials with critical real-time,
location accuracy standard. In this Order,
needs for security, fuel, and other support and
emphasizing that the operation and marketing
on-the-ground information. In some emergency
the Commission required new

Commercial

help guide and prioritize Federal restoration
of jamming devices is illegal and recently cited
situations, especially in circumstances where

Mobile Radio Service (CMRS)

providers to
efforts. Currently, the FCC’s outage reporting
20 online retailers for illegally marketing
a call could further jeopardize someone’s life
comply with the Commission’s more stringent
rules apply only to legacy communications
these devices. Similarly, the Enforcement
and safety, texting may be the only way to
handset-based location accuracy standard,
services. This year, the Commission adopted
Bureau issued six Notices of Apparent
reach out for help.
regardless of the location technology they use.
a NPRM proposing that interconnected
Liability for Forfeiture against companies
Today’s 911 system is not equipped to take
In a companion Further Notice of Proposed
VoIP service and broadband Internet service
operating devices causing interference to
advantage of new technologies. Existing 911
Rulemaking (FNPRM) to the Order, the
providers report significant outages. Under
Terminal Doppler Weather Radars (TDWR)
call centers lack the technical capability to
Commission sought comment on improving
this proposal, providers of these services
systems maintained by the Federal Aviation
receive texts, photos, videos, and other data.
911 availability and location determination
would report outages of at least thirty minutes
Administration (FAA). TDWR systems serve
Further, many 911 call centers do not have
for

Voice over Internet Protocol (VoIP)


that meet certain thresholds, helping fulfill
the critical function of providing the FAA with
access to broadband, which makes it difficult
services. The Commission wants to ensure
the FCC’s mission to ensure that our country’s
quantitative measurements for windshear,
to receive incoming data, particularly in large
that all interconnected VoIP providers provide
critical communications infrastructure
microbursts, and other weather hazards.
volume. In December 2010, the Commission
automatic location information for VoIP 911
remains operating in times of crisis.

Disaster preparedness and response

continues
adopted a NOI seeking public comment on
calls, rather than relying on the subscriber
Vital communications can be disrupted not
to be a priority for the FCC. Following the
how

Next Generation 911 (NG911)

can enable
to register his or her location with the VoIP
only by outages, but by harmful interference
devastating earthquakes in Japan, the
the public to obtain emergency assistance
provider. The Commission is also seeking
as well. Throughout the year, the Commission’s
Commission’s Public Safety and Homeland
by means of advanced communications
ways that location technologies that are

Enforcement Bureau

worked tirelessly to track
Security Bureau conducted a public forum
technologies beyond traditional voice. Near
already being developed for commercial
down sources of interference to the military,
in May exploring earthquake-related
the end of FY 2011, the Commission adopted
broadband applications might be leveraged to
first responders, other Federal agencies, and
emergency preparedness and response issues.
a NPRM examining options for enabling
support 911 location determination. Finally,
consumers. For example, the Enforcement
In response to Hurricane Irene’s arrival in
consumers to send texts to 911 and to seek
the Commission sought comment on how to
Bureau acted against the use and sale of cell
August, the Public Safety and Homeland
comment on long-term development of
improve location accuracy for 911 calls made
and GPS “jammers,” which intentionally
Security Bureau, in conjunction with the
multimedia NG911 technology that would
from indoors, including large office buildings
block, jam, or interfere with authorized
National Communications System, activated
support delivery of photos, videos, and data
where it may be difficult to locate an individual
radio communications and therefore pose
the agency’s

Disaster Information Reporting

in addition to texting. The Commission will
in trouble based only on a street address.
significant risks to public safety emergency

System (DIRS)

. DIRS is a voluntary Web-based
consider the appropriate role for the agency
communications. In February, the Bureau
system that communications providers,
in facilitating, and if necessary accelerating,
the rollout of these capabilities.

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including wireless, wireline, broadcast,
Agency (FEMA) and other agencies, stood
Not only must consumers be prepared if

Mobile Alert System

mandated by statute.
and cable providers, can use to report
ready to provide aid to public safety licensees
disaster strikes, but also the communications
Nationwide introduction of commercial
communications infrastructure status and
and others responsible for the safety of life and
industry has a responsibility to prepare. The
wireless alerting is scheduled to begin in
situational awareness information during
property; health and welfare of the population;
Commission adopted a NOI seeking comment
April 2012.
times of crisis. Service providers in areas
and utility services.
on ways to further strengthen the reliability
The rapid expansion and adoption of
affected by a disaster are able to report the
and resiliency of America’s communications
As part of National Preparedness Month
broadband services has created new reliability
status of their communications equipment,
networks. As the communications
in September, the FCC and FEMA released
and security challenges. The Commission has
restoration efforts, power (i.e., whether they
infrastructure migrates to broadband
tips (see below) for consumers aimed at
identified key cybersecurity threats to our
are using commercial power, generator or
technology, critical communications services
preparing them for major disasters when
nation’s communications infrastructure and
battery), and access to fuel. The FCC, working
will travel over a network infrastructure
communications networks are more likely to
critical sectors and is working in partnership
with the Federal Emergency Management
that may or may not be built to the high
be compromised, damaged, or congested.
with industry and all levels of government
standards of legacy systems. The potential
to address these new threats through the
for differences in service reliability may be
newly rechartered

Communications Security,

tips for how to communicate during an emergency
a major source of concern for consumers,

Reliability and Interoperability Council

, a
1. limit non-emergency phone cal s. this wil minimize network congestion, free up “space” on the network for
government, and businesses across America.
Federal advisory committee.
emergency communications, and conserve battery power if you are using a wireless phone.
This action is part of the FCC’s ongoing
efforts to help ensure the reliability and
2. Keep phone cal s brief. if you need to use a phone, try to use it only to convey vital information to emergency
resiliency of communications for the public,
personnel and/or family.
emergency responders, healthcare providers,
3. For non-emergency cal s, try texting. in many cases text messages wil go through when your cal may not. it will
and providers of other critical services
also help free up more “space” for emergency communications on the telephone network.
such as electric power during natural or
man-made disasters.
4. if possible, try a variety of communications services if you are unsuccessful in getting through with one. For
example, if you are unsuccessful when cal ing on your wireless phone, try text messaging or email. alternatively,
Along with ensuring that consumers have
try a landline phone if one is available. this wil help spread the communications demand over multiple networks
access to critical communications during and
and should reduce overal congestion.
after disasters, the Commission is taking
actions to facilitate and expand emergency
5. Wait 10 seconds before redialing a cal . to redial a number on many wireless handsets, you simply push “send”
after you’ve ended a cal to redial the previous number. if you do this too quickly, the data from the handset to the
alert capabilities. The Commission worked
cel sites do not have enough time to clear before you’ve resent the same data. this contributes to a clogged network.
with FEMA on the first-ever nationwide
test of the

Emergency Alert System (EAS)


6. have charged batteries and car-charger adapters available for backup power for your wireless phone.
by television and radio broadcasters, cable
7. maintain a list of emergency phone numbers in your phone.
systems, satellite radio and television service,
8. if in your vehicle, try to place cal s while your vehicle is stationary.
and wireline video service providers that
deliver EAS alerts to the American public.
9. have a family communications plan in place. Designate someone out of the area as a central contact and make
The purpose of this nationwide test was to
certain al family members know whom to contact if they become separated.
determine the reliability of the EAS system
10. in the event of an evacuation, if you have “cal forwarding” on your home phone number, forward your home
and its effectiveness in notifying the public of
number to your wireless number. that way you wil get incoming cal s from your landline phone.
emergencies and potential danger nationwide
and regionally and to identify and correct
11. if you lose power in your home, try using your car to charge cel phones or listen to news alerts on the car radio.
But be careful – don’t try to reach your car if it is not safe to do so and remain vigilant about carbon monoxide
potential shortfalls in the nationwide EAS
emissions from your car if it is in a closed space such as a garage.
system before an actual large-scale emergency.
Working with wireless communications
12. in an emergency, cal 911 immediately. if it’s not an emergency, use other options.
service providers, the Commission continued
its efforts to implement the

Commercial


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31

International
Commit to greater international engagement and cooperation.
The Commission adopted a NPRM to eliminate
The FCC reached agreements with Industry
outdated regulations governing agreements
Canada and Mexico’s Secretariat of
between U.S. and foreign carriers for
Communications and Transportation for
delivering international phone traffic and to
sharing commercial wireless broadband
FY 2011
seek comment on other ways to protect against
spectrum in the 700 MHz band along the
anticompetitive conduct by monopolistic
U.S.-Canadian and U.S.-Mexican border
foreign carriers. Established over 80 years
areas. This will facilitate the deployment
ago, the

International Settlements Policy

of mobile wireless broadband systems near
(ISP) ensured fair treatment for U.S. carriers
these borders and will provide consumers
negotiating agreements with foreign carriers
in these areas with advanced opportunities
with market power. However, over the past
for 4G high-speed mobile broadband access.
Financial
15 years global competition has significantly
The FCC also reached an arrangement with
increased, new alternative traffic routing
Industry Canada for sharing spectrum in the
possibilities have emerged, and the average
800 MHz band, which will pave the way for
U.S. calling price for international phone
completion of an 800 MHz transition along
calls has fallen from $0.74 per minute to
the U.S.-Canadian border. This will alleviate
$0.08 per minute. These changes have
interference to public safety licensees in the
Information
made the ISP less relevant and necessary to
band from commercial cellular licensees.
ensure fair competition. In some cases, the
The FCC’s International Bureau released
ISP may now be hindering attempts by U.S.
the International Broadband Data Report
carriers to negotiate agreements that reduce
in May, presenting comparative data on
international telephone rates. This proposal
international broadband capability. The report
would give U.S. carriers greater flexibility
provided data on broadband service plans
to negotiate agreements with foreign
and pricing in 38 countries (including the
counterparts, resulting in lower rates for
United States), representing a wide range of
international calls.
broadband markets, including countries of
As part of its

Data Innovation Initiative

, the
various sizes and population densities. The
Commission eliminated more than 25 outdated
report’s results suggest a correlation between
and unnecessary reporting requirements
broadband adoption and communities with
related to international telephone traffic and
larger populations, communities with higher
revenue and sought comment on additional
population density, and communities with
reforms to streamline and modernize
higher income. The data on average actual
remaining international data collections. In
download speeds reported by consumers
particular, the Commission eliminated the
in U.S. and foreign cities show that some
quarterly international traffic and revenue
large European and Asian cities exhibit a
reporting requirements for large carriers and
significant edge over comparable U.S. cities in
foreign-affiliated carriers. The Commission
reported download speeds. Reported speeds
concluded that the burdens to U.S. carriers
for some other international cities, however,
of providing those reports now outweigh the
are roughly comparable to speeds in many U.S.
benefits of this data.
cities.

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33

How We Managed Our Funds:
A Message from Our Chief Financial Officer
Throughout FY 2011, the Commission worked
The Commission is committed to improving
I am pleased to present the Commission’s financial
diligently on closing audit findings from
its financial processes, fiscal integrity,
statements for fiscal year (FY) 2011 and to report that the
previous audits. The Commission as a whole
minimizing the risk of improper payments,
Commission’s auditors issued an unqualified opinion on
closed 84 audit findings during FY 2011. As
and to reducing improper payments to the
a part of this effort, the Commission made
customers and beneficiaries of its reporting
each of the Commission’s financial statements for FY 2011.
progress on resolving matters raised by its
components. The Commission continues to
Furthermore, I am proud to say that this is the sixth straight
auditors in their FY 2010 audit report. The
make improvements to the fiscal management,
Commission closed findings relating to its
administration, and oversight of funds
fiscal year the Commission has received an unqualified
information technology control deficiencies
reported by the Commission.
opinion. Six straight years of unqualified opinions is the
and made progress in resolving findings
related to its financial management systems
I look forward to FY 2012 and making
longest consecutive period of “clean” audit opinions that the Commission has
by launching its new core financial system
every effort to continue to strengthen the
received in the thirteen fiscal years that its financial statements have been
effective October 1, 2010, and reviewing
Commission’s and its reporting components’
audited, dating back to FY 1999. The Commission is proud of the work of its
its feeder systems as required by Office of
internal control environments, and to improve
Management and Budget Circular A-127.
the effectiveness of the financial operations of
staff over the past six fiscal years to obtain and maintain an unqualified opinion.
the Commission and its reporting components.
Significantly, for FY 2011 the Commission’s
independent auditor did not report any

Mark Stephens

material weaknesses for the Commission
Chief Financial Officer
or its reporting components. Despite
February 15, 2012
these successes, work remains here at the
Commission. The FY 2011 audit report
points out two significant deficiencies
related to internal controls and notes two
instances of non-compliance that still need
to be resolved. The primary areas of concern
relate to financial system functionality and
integration, information technology controls,
and compliance with the Federal Managers’
Financial Integrity Act and the Debt Collection
Improvement Act.

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35

Key FY 2011 Financial Management
Accomplishments
Our Financial Results
area
accomPliShment
This section contains condensed financial statement information, a description of


our major balance sheet components and our cost of operations, and budgetary
the commission worked with the universal Service company (uSac ) and the Department
of Justice in successful y pursuing wrongdoers who sought to defraud the universal
resources. We also present the results of our performance in the area of financial
Service Fund (uSF). in FY 2011, these efforts yielded cash recoveries of over $17.8
mil ion in fraudulent disbursements. in addition, the commission and the Department of
management using established metrics. Our complete financial statements are
stewardship over
Justice is pursuing other cases that involve over $4.9 mil ion in claims. the commission
funds
has initiated investigations into several service providers that receive funds from the
available on the FCC Web site at http://www.fcc.gov/encyclopedia/fcc-strategic-plan">www.fcc.gov/encyclopedia/fcc-strategic-plan.
telecommunications relay Service Fund (trS).
the commission ful y recovered the value of consent decrees for violations related to the
telecommunications relay Service Fund (trS).
chanGeS in Financial PoSition (consolidated)

the commission continues to increase efficiencies and leverage effectiveness in the
net Financial condition
newly implemented core Financial System (Genesis). the newly implemented financial
(Dol ars in thousands)

FY 2011


FY 2010
system reduced and/or eliminated instances of duplicate transaction entry and reduced
preparation of manual y intensive reconciliations. Financial business processes were
intragovernmental
reengineered, leveraging best practices, which included automating of the paper intensive
financial systems
documentation approval and routing process. the commission launched a col aborative
Fund Balance with Treasury
$

494,340
$

457,368
modernization
tiger team to address any post implementation outstanding issues which were remaining
Investments

5,822,843


6,087,715
to ful y leverage improved functionality provided by the new system.
Accounts Receivable


1,097


571
Other


2,436


33,838
in addition, the commission was able to leverage from the core Financial System
total intragovernmental
$
6,320,716
$
6,579,492
functionality to successful y implement the Genesis acquisition module within a 75
day rapid implementation schedule.
Cash and Other Monetary Assets


213,944


100,344
Accounts Receivable, net


831,072


783,620
the Fcc’s ongoing partnership with the Smal Business administration led to increased
Loans Receivable, net


4


48,470
contract awards to both smal and smal disadvantaged businesses. the agency
General Property & Equipment, net


60,461


65,167
consistently meets or exceeds its goals for awarding contracts to Smal Disadvantaged
Other


13,053


13,088
Businesses as wel as Smal Disadvantaged Veteran-owned Businesses. additional y, the
total assets
$
7,439,250
$

7,590,181
procurement
agency expanded the use of its new financial management system, Genesis, to include
the module for contract writing and management. the contract writing and management
intragovernmental
system within Genesis wil improve internal controls with respect to both the commitment
Debt
$

50,300
$

87,726
and obligation of agency funds by ensuring that incompatible functions or roles are never
other


220,249


251,972
performed by the same set of employees.
total intragovernmental
$

270,549
$

339,698
accounts Payable


92,976


120,477
Deferred revenue


93,053


132,386
The FCC’s FY 2011 Agency Financial Report, found at http://www.fcc.gov/encyclopedia/fcc-strategic-plan">www.fcc.gov/
Prepaid contributions


77,362


74,915
accrued liabilities for universal Service


633,967


622,400
http://www.fcc.gov/encyclopedia/fcc-strategic-plan">encyclopedia/fcc-strategic-plan, contains a full list of FY 2011 Financial
other


35,804


49,408
total liabilities
$
1,203,711
$

1,339,284
Management Accomplishments, the full audit report from the external
Unexpended Appropriations
$

15,105
$

21,183
auditor, and our Summary of Management Assurances, among other
Cumulative Results of Operations

6,220,434


6,229,714
financial information.
total net position
$
6,235,539
$
6,250,897
net cost of operations
$
8,820,764
$

8,961,165
total budgetary resources
$
12,904,395
$
13,612,371

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37


Assets
Liabilities
The chart below presents the total assets of the Commission as of
The chart below presents the total liabilities of the Commission as of
September 30, 2011. The large Intergovernmental Investments balance
September 30, 2011. The Commission’s most significant liabilities are
of $5,823 million mainly results from carryover in the USF Schools and
Deferred Revenue of $93 million and Accrued Liabilities for Universal Service
Libraries and Rural Healthcare programs that has grown since the programs’
of $634 million, which accounted for 61 percent of total liabilities as of
inception as a result of annual contributions that have exceeded annual
September 30, 2011. The Deferred Revenue balance includes $19.8 million
distributions. The Accounts Receivable balance of $831 million is primarily
in winning bids for auction #92 and $21.6 million for other auctions where the
composed of USF receivables totaling $780 million.
corresponding licenses have not yet been granted. As these licenses are granted,
the revenue will be recognized on the Statement of Custodial Activity by the
2011 aSSetS BY cateGorY (Dollars in thousands)
Commission. The Accrued Liabilities for Universal Service represent the expected
category
%
assets
October (FY 2012) payments for the Telecommunications Relay Service Program
and the Universal Service Fund High Cost and Low Income Programs.
 Intragovernmental Investments
78.0% $5,822,843
 Accounts Receivable, net
11.0%
$831,072
2011 total liaBilitieS BY cateGorY (Dollars in thousands)
 Remaining Intragovernmental Assets
7.0%
$497,873
category
%
assets
 Cash and Other Monetary Assets
3.0%
$213,944
 Accrued Liabilities for Universal Service
53.0%
$633,967
 General PP&E
1.0%
$60,461
 Total Intragovernmental
22.0%
$270,549
 Other Assets
<1.0%
$13,053
 Deferred Revenue
8.0%
$93,053
 Loans Receivable, net
<1.0%
$4
 Accounts Payable
8.0%
$92,976
total assets
$7,439,250
 Prepaid Contributions
6.0%
$77,362
 Other
3.0%
$35,804
total assets
$1,203,711
net Position: as of September 30, 2011, the agency’s total net position was $6,235 mil ion, consisting of cumulative
results of operations of $6,220 mil ion and unexpended appropriations of $15 mil ion.

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39

Costs
Budgetary Resources
The graph below presents the total gross costs of each Commission program
The Commission receives most of its budgetary authority from Congressional
as of September 30, 2011. The costs are aligned with the six strategic goals
appropriations. Budgetary resources consist of the resources available to the
of the Commission which changed effective FY 2011: Broadband, Competition
Commission at the beginning of the year (carried forward), plus appropriations,
& Innovation, International, Consumers, Public Safety and Homeland Security,
spending authority from offsetting collections, and other budgetary resources
and Continual Improvement. Prior to FY 2011, net costs were aligned with the
received during the year. The Commission had $12.9 billion in budgetary
following strategic goals: Broadband, Competition, Spectrum, Media, Public
resources of which $10.1 billion was obligations incurred and $2.8 billion
Safety and Homeland Security, and Modernize the FCC. Gross costs for each
remained unobligated. The chart below compares the status of budgetary
goal are presented individually while revenue is presented in total rather than
resources between FY 2011 and FY 2010.
by goal. The program costs for the USF, TRS and NANP are included within the
StatuS oF BuDGetarY reSourceS – FY 2011 & FY 2010 (Dollars in thousands)
Competition and Innovation strategic goal. The Commission’s subsidy costs for
$12,000,000
the Spectrum Auction Loan Program are included with the Competition and
$11,040,412
total budgetary resources:
$10,139,788
Innovation strategic goal. As a result of the accounting for these activities,
$10,000,000
 FY 2011 $12,904,395
the cost for these goals may be significantly higher than the cost of the five
$8,000,000
 FY 2010 $13,612,371
other goals. Contributions received for the USF and TRS programs are shown
$6,000,000
on the Statement of Changes in Net Position and do not directly offset the cost
$4,000,000
$2,764,607
of these programs on the Statement of Net Cost.
$2,571,959
$2,000,000
2011 total GroSS coSt (Dollars in thousands)
0
Obligations Incurred
Unobligated Balance
category
%
costs
 Competition & Innovation
98.0%
$9,099,922
 Broadband
1.0%
$54,536
 Continual Improvement
1.0%
$50,626
 Consumers
< 1.0%
$46,156
 Public Safety & Homeland Security
< 1.0%
$35,576
 International
< 1.0%
$6,753
 Other
< 1.0%
$25
total gross costs
$9,293,594

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41

Financial Management Indicators
Financial manaGement inDicatorS For FY 2011
inDicator
StatuS


debt management
Debt eligible transferred to treasury
91.35%
funds management
Fund balance with treasury (identifies the difference between the fund balance reported in treasury
100.0%
reports and the agency fund balance with treasury recorded in its general ledger on a net basis)
reconciled
payment management
timely vendor payments (per Prompt Payment act)
81.19%
Percentage interest penalties paid to invoices processed
0.03%
Percentage of total dol ars outstanding in current status* (good standing) for central y bil ed
travel accounts
100.0%
Percentage of total dol ars outstanding in current status* (good standing) for Purchase cards
100.0%
Percentage of travel vouchers processed within 10 business days
71.0%**
*the office of management and Budget threshold for delinquency is 61 days.
** Due to system processing issues with the new Fcc core Financial system during Qtr 1 of FY 2011, the complete fiscal year results were
severely impacted.

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43

Federal

445 12th Street, SW, Washington, Dc 20554
Phone: 1-888-call-Fcc (1-888-225-5322)

Communications

ttY: 1-888-tell-Fcc (1-888-835-5322)

Commission

Fax: 1-866-418-0232
http://www.fcc.gov">www.fcc.gov

fcc.gov :: February 2012

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