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FY 2013 Summary of Performance & Financial Information

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Released: April 7, 2014

FY 2013

Summary of Performance

& Financial Information

Message from Our Chairman

It is my pleasure to present the Federal Communications Commission’s (FCC or
Commission) Fiscal Year (FY) 2013 Summary of Performance and Financial Results.
The purpose of this summary is to increase our agency’s accountability by making the
financial and performance information more transparent and accessible to all citizens
and key constituencies. This report is in keeping with the goal of an open, transparent,
and accountable FCC by making key performance information publicly available.
It provides a concise description of the Commission’s performance and financial
information for FY 2013.
America leads the world in the creation of new networks and is a place where new networks and the new economy
  are synonymous. These are important days in determining the future of our networks and their effect on our
commerce and our culture. There is no doubt that today we are living history in the midst of the fourth great
network revolution. Gutenberg’s printing press enabled the original information revolution; the railroad was the
first high-speed network; and the instantaneous electronic transmissions of the telegraph opened the door to
everything from broadcasting to the telephone. Each of these network revolutions redefined mankind’s path forward.
What makes our revolution different from its predecessors, however, is the speed with which it has developed
and the velocity with which it continues to evolve. I know that network revolutions are not easy, that they produce
upheaval, dislocation, fear, and concern. Yet at the same time, the new networks became the underpinning of
everything from the Reformation to the Industrial Revolution. It is amidst just that sort of upheaval that we have
the responsibility of assuring that innovation and technology advance – indeed, advance with speed – while at
the same time preserving the basic covenant between networks and those whom they connect.
It is precisely in the midst of such change that our job at the FCC, as representatives of the people, makes the work
of this agency even more important. The challenge America faces, and that this agency faces, is to secure the
future through the actions of the present – by encouraging investment and innovation; preserving competitive
opportunities; protecting consumers; and assuring the opportunities of the new network extend to all.
This report contains a summary of the progress the FCC made during FY 2013 in meeting the key challenges facing
the agency, as well as an assessment of the financial management of the FCC. I am pleased to note that for the
eighth consecutive year, the FCC obtained a “clean” audit opinion on its financial statements. A more detailed
view of the Commission’s financial statements can be found in the FY 2013 Agency Financial Report, located at
https://www.fcc.gov/encyclopedia/fcc-strategic-plan. This is also the location where you can find the FY 2013 Annual
Performance Report, which provides a comprehensive look at the FCC’s accomplishments for the fiscal year.
Tom Wheeler
Chairman
March 31, 2014
2 | Summary of Performance & Financial Information FY 2013

FY 2013

Performance

Summary

fcc.gov | 3

Overview of the

Federal Communications Commission

The Federal Communications Commission (FCC or Commission) has chosen to produce
this Summary of Performance and Financial Information to provide a citizen-friendly
document summarizing the FCC’s financial status and performance for Fiscal Year 2013
(October 1, 2012 through September 30, 2013). We do this in recognition that members
of the public, particularly our key constituencies, are stakeholders in the work and the
results of our agency. Our goal is to increase the transparency and accessibility of the FCC
and increase the accountability of the Commission to you, the citizens of the United States.
This Summary document may lead you to seek additional information concerning the FCC’s finances and performance.
The Commission has published its Agency Financial Report and its Annual Performance Report for FY 2013.
Both are available online on the Commission’s Web site at https://www.fcc.gov/encyclopedia/fcc-strategic-plan.

Mission

As specified in the Communications Act, the Commission’s mission is to
“make available, so far as possible, to all the people of the United States,
without discrimination on the basis of race, color, religion, national origin, or
sex, rapid, efficient, nationwide, and worldwide wire and radio communication
service with adequate facilities at reasonable charges.”1 In addition, the
Communications Act provides that the Commission was created “for the
purpose of the national defense” and “for the purpose of promoting safety
of life and property through the use of wire and radio communications.”2
1 47 U.S.C. § 151.
2 Id.
4 | Summary of Performance & Financial Information FY 2013

About the FCC

The FCC is an independent regulatory agency of the
unexpired term of a previous Commissioner. Only
United States Government. The Commission was
three Commissioners can be of the same political
established by the Communications Act of 1934 and
party at any given time and none can have a financial
is charged with regulating interstate (between states)
interest in any company or entity that has a significant
and international communications by radio, television,
interest in activities regulated by the Commission.
wire, satellite, and cable. The Commission also
The President designates one of the Commissioners
regulates telecommunications services for hearing-
to serve as Chairman.
impaired and speech-impaired individuals, as set
forth in Title IV of the Americans with Disabilities Act
The Chairman and the Commissioners at the
(ADA). The Commission’s headquarters is located
conclusion of 2013 were:
in Washington, D.C., with three regional offices,
sixteen district offices, and nine resident agent offices
• Chairman Tom Wheeler
throughout the nation.
• Commissioner Mignon Clyburn
• Commissioner Jessica Rosenworcel
Five commissioners direct the work of the FCC. All
• Commissioner Ajit Pai
are appointed by the President and confirmed by
• Commissioner Michael O’Rielly
the Senate for 5-year terms, except when filling the
Pictured from left to right are Commissioner Pai, Commissioner Clyburn, Chairman Wheeler, Commissioner Rosenworcel, and Commissioner O’Rielly.
 
fcc.gov | 5

Organizational Structure

The FCC Chairman leads the Commission as head of the agency. In order to accomplish
its mission, the FCC is organized by function. There are seven Bureaus and ten Offices.
The Bureaus and the Office of Engineering and Technology process applications for
licenses to operate facilities and provide communications services in specific locations
and on specific radio frequencies; analyze complaints from citizens and other licensees;
conduct investigations; develop and implement regulatory programs; and participate in
hearings. Generally, the nine other Offices provide specialized support services. Bureaus
and Offices regularly join forces and share expertise in addressing FCC-related issues.

The Bureaus
The Consumer and Governmental Affairs Bureau


The Public Safety and Homeland Security Bureau


develops and implements the FCC’s consumer policies,
supports initiatives that strengthen public safety and
including disability access and policies affecting Tribal
emergency response capabilities to better enable the
nations. The Bureau serves as the public face of the
FCC to assist the public, law enforcement, hospitals,
Commission through outreach and education, as well
the communications industry, and all levels of
as through the Consumer Center, which is responsible
government in the event of a natural disaster,
for responding to consumer inquiries and complaints.
pandemic, or terrorist attack.
The Bureau also maintains collaborative partnerships
with state, local, and Tribal governments in such critical

The Wireless Telecommunications Bureau

is
areas as emergency preparedness and implementation
responsible for wireless telecommunications programs
of new technologies.
and policies in the United States and its territories,
including licensing of wireless communications

The Enforcement Bureau

enforces FCC’s rules
providers. Wireless communications services include
and the Communications Act. The Bureau protects
cellular, paging, personal communications, and
consumers, ensures efficient use of spectrum,
other radio services used by businesses and private
furthers public safety, and promotes competition.
citizens. The Bureau also conducts auctions of
licenses for the communications spectrum.

The International Bureau

administers the FCC’s
international telecommunications and satellite programs

The Wireline Competition Bureau

develops
and policies, including licensing and regulatory functions.
and recommends policy goals, objectives,
The Bureau promotes pro-competitive policies abroad,
programs, and plans on matters concerning wireline
coordinates the Commission’s global spectrum activities
telecommunications (e.g., telephone landlines,
and advocates U.S. interests in international
and fixed—as opposed to mobile—broadband),
communications and competition. The Bureau works
striving to ensure choice, opportunity, and fairness
to promote a high-quality, reliable, globally interconnected,
in promoting the development and widespread
and interoperable communications infrastructure.
availability of such communications services. The
Bureau has particular responsibility for the Universal

The Media Bureau

recommends, develops, and
Service Fund, a public-private partnership that helps
administers the policy and licensing programs relating
connect all Americans to communications networks.
to electronic media, including radio and broadcast,
cable, and satellite television in the United States and
its territories.
6 | Summary of Performance & Financial Information FY 2013

The Offices
The Office of Administrative Law Judges

is

The Office of Legislative Affairs

serves as the
composed of judges who preside over hearings
liaison between the FCC and Congress, as well as
and issue decisions on matters referred to them
other Federal agencies.
by the Commission.

The Office of the Managing Director

administers

The Office of Communications Business

and manages the FCC.

Opportunities

promotes competition and innovation
in the provision and ownership of telecommunications

The Office of Media Relations

informs the media
services by supporting opportunities for small
of FCC decisions and serves as the FCC’s main point
businesses as well as women and minority-owned
of contact with the media.
communications businesses.

The Office of Strategic Planning and Policy Analysis

The Office of Engineering and Technology


works with the Chairman, Commissioners, Bureaus, and
advises the Commission on technical and engineering
Offices in strategic planning and policy development
matters. This Office develops and administers FCC
for the agency. It also provides research, advice, and
decisions regarding spectrum allocations and grants
analysis of complex, novel, and non-traditional
equipment authorizations and experimental licenses.
economic and technological communications issues.

The Office of the General Counsel

serves as the

The Office of Workplace Diversity

ensures that
Commission’s chief legal advisor.
the FCC provides employment opportunities for all
persons regardless of race, color, sex, national origin,

The Office of the Inspector General

conducts and
religion, age, disability, or sexual preference.
supervises audits and investigations relating to FCC
programs and operations.
Detailed information on specific Bureau and Office
responsibilities can be found in Title 47 of the Code of
Federal Regulations and on the Commission’s website
at: www.fcc.gov. The Commission’s organizational
chart at the end of 2013 is included on the next page.
fcc.gov | 7

Organizational Chart

Commissioners

Tom Wheeler, Chairman

Mignon Clyburn Jessica Rosenworcel Ajit Pai Michael O’Rielly

Office of

Office of

Inspector General

Administrative Law Judges

Office of

Office of

Office of

Office of

Engineering &

General

Managing

Media

Technology

Counsel

Director

Relations

Electromagnetic Compatibility Div.
Administrative Law Div.
Human Resources Management
Media Services Staff
Laboratory Div.
Litigation Div.
Information Technology Center
Internet Services Staff
Policy & Rules Div.
Financial Operations
Audio-Visual Services Staff
Administrative Staff
Administrative Operations
Performance Eval. & Records Mgmt
Secretary

Office of

Office of

Office of

Office of

Strategic Planning

Communications

Workplace

Legislative

& Policy Analysis

Business

Diversity

Affairs

Opportunities

Consumer &

Wireless

Governmental

Telecommunications

Media

Enforcement

Affairs Bureau

Bureau

Bureau

Bureau

Admin. & Mgmt. Office
Management & Resources Staff
Mgmt. & Resources Staff
Office of Management & Resources
Consumer Inquiries & Complaints Div.
Auctions & Spectrum Access Div.
Office of Com. & Industry Info.
Telecommunications Consumers Div.
Consumer Policy Div.
Technologies, Systems &
Policy Div.
Spectrum Enforcement Div.
Office of Native Affairs and Policy
Innovation Div.
Industry Analysis Div.
Market Disputes Resolution Div.
Reference Information Center
Spectrum & Competition Policy Div.
Engineering Div.
Investigations & Hearings Div.
Disability Rights Office
Mobility Div.
Office of Broadcast License Policy
Regional & Field Offices
Consumer Affairs & Outreach Div.
Broadband Div.
Audio Div.
Office of Intergovernmental Affairs
Video Div.
Web & Print Publishing Div.

Wireline

Public Safety &

Competition

International

Homeland Security

Bureau

Bureau

Bureau

Admin. & Mgmt. Office
Admin. & Mgmt. Office
Management & Administrative Staff
Competition Policy Div.
Policy & Licensing Div.
Policy Div.
Pricing Policy Div.
Cybersecurity & Communications
Satellite Div.
Telecommunications Access Policy Div.
Reliability Div.
Strategic Analysis & Negotiations Div.
Industry Analysis & Technology Div.
Operations & Emergency Mgmt. Div.
Emergency Response &
Interoperability Center
8 | Summary of Performance & Financial Information FY 2013

FCC Field Offices

The Commission has multiple regional and field offices
and representation of the Commission before groups
as well as resident agent locations throughout the
and organizations. In addition, the FCC maintains
United States. The regional and field offices and
a laboratory in Columbia, Maryland so that staff of
resident agents are responsible for carrying out on-
the Office of Engineering and Technology can test,
scene investigations, inspections, audits, and other
evaluate, and perform engineering analyses on
matters that are the subject of complaints and that
communications equipment requiring Commission
are referred to them from within the Enforcement
authorization for use. The FCC also has a facility in
Bureau or by other bureaus and offices. These
Gettysburg, Pennsylvania housing portions of its
functions include immediate response to safety-of-
Wireless Telecommunications Bureau’s licensing and
life issues, interference resolution, investigation of
spectrum auctions staff and a portion of the FCC’s
violations in all communications services, surveys for
National Call Center operated by the Consumer and
compliance with FCC rules, local assistance to other
Governmental Affairs Bureau. Below is a map of all
agencies or countries in communications matters,
Commission Field Offices and resident agent locations.
fcc.gov | 9

Strategic Goals and Objectives

The Commission has identified eight long-term strategic goals that guide the actions and
performance of the FCC.
Accomplishment of agency goals is measured by
goal. Further details on the Commission’s strategic
the progress and completion of annual performance
goals during FY 2013, as well as the strategies and
goals during the fiscal year. External influences,
resources used to achieve these goals, can be found
including economic, legal, and organizational factors
in the Commission’s strategic plan at:
beyond the Commission’s programs and efforts, may
https://www.fcc.gov/encyclopedia/fcc-strategic-plan.
influence whether we fully meet every performance
Strategic Goal
Objective
Connect America
Maximize Americans’ access to – and the adoption of—affordable fixed and mobile
broadband where they live, work, and travel.
Maximize Benefits
Maximize the overall benefits of spectrum for the United States.
of Spectrum
Empower and
Empower consumers by ensuring that they have the tools and information they need to
Protect Consumers
make informed choices; protect consumers from harm in the communications market.
Promote Innovation,
Promote innovation in a manner that improves the nation’s ability to compete in the global
Investment, and America’s
economy, creating a virtuous circle that results in more investment and in turn enables
Global Competitiveness
additional innovation.
Promote Competition
Ensure a competitive market for communications and media services to foster innovation,
investment, and job creation, as well as to ensure consumers have meaningful choice in
affordable services.
Advance Key
Through international and national interagency efforts, advance the use of broadband for
National Purposes
key national purposes.
Public Safety and
Promote the availability of reliable, interoperable, redundant, and rapidly restorable critical
Homeland Security
communications infrastructures that are supportive of all required services.
Operational Excellence
Make the FCC a model for excellence in government by effectively managing the Commission’s
human, information, and financial resources; by making decisions based on sound data and
analyses; and by maintaining a commitment to transparent and responsive processes that
encourage public involvement and best serve the public interest.
10 | Summary of Performance & Financial Information FY 2013

Performance Highlights for FY 2013

During the previous fiscal year, the Commission made significant progress toward
accomplishing its performance goals. Greater detail on these accomplishments is available
in the FCC Annual Performance Report (APR) for FY 2013 on the Commission’s Web site
at https://www.fcc.gov/encyclopedia/fcc-strategic-plan. In the following discussion, we
identify achievements in the Commission’s major initiatives during the past fiscal year,
organized by strategic goal.
fcc.gov | 11

Connect America

Maximize Americans’ access to – and the adoption of—affordable fixed and mobile
broadband where they live, work, and travel.
Robust, affordable broadband has become essential
The Commission kicked-off a government-wide effort
to access jobs, education, and economic opportunity.
to increase speeds and alleviate Wi-Fi congestion at
Over 80 percent of Fortune 500 companies today
major hubs, such as airports, convention centers and
require online job applications. Students with
large conference gatherings. In addition, this would
broadband at home have a seven percent higher
also increase speed and capacity for Wi-Fi in the
graduation rate. However, low-income households
home where multiple users and devices are often on
adopt broadband at much lower rates than the average
the network at the same time. This will increase and
household. Fewer than 36 percent of families with
free up the unlicensed spectrum available for ultra-
incomes less than $25,000 subscribe to broadband
high-speed, high-capacity Wi-Fi – known as “Gigabit
at home, compared to nearly 92 percent of families
Wi-Fi” – by up to 35 percent. This effort will enable
with incomes over $75,000, according to the U.S.
higher data speeds and greater capacity, most notably
Census Bureau.
improving HD video distribution capability.
Up to 600,000 homes and small businesses that lack
At the U.S. Conference of Mayors Winter Meeting,
broadband will get access as a result of additional
former FCC Chairman Julius Genachowski called
support from the FCC’s Connect America Fund. The
for at least one gigabit community in each of the
Commission created the Connect America Fund
50 states by 2015. Gigabit communities spur
to unleash the benefits of 21st century broadband
innovators to create new businesses and industries,
communications in communities where there are
spark connectivity among citizens and services, and
insufficient market incentives to expand broadband
incentivize investment in high-tech industries. Today,
service absent a joint public-private effort. Key reforms
approximately 42 communities in 14 states are served
allowed Connect America to expand support to both
by ultra-high-speed fiber Internet providers, according
broadband and voice without increasing universal
to the Fiber to the Home Council.
service fees on consumers and businesses. Providers
in 44 states and Puerto Rico requested over $385
The FCC released the results of its ongoing, nationwide
million from the Fund, which will be matched with
performance study of residential broadband service
hundreds of millions of their own dollars in many areas,
in its third “Measuring Broadband America” report.
to quickly expand broadband infrastructure to rural
This year’s report revealed that most broadband
communities in every region of the nation. Deployment
providers continue to improve service performance
must be completed within three years.
by delivering actual speeds that meet, or exceed,
advertised speeds, and that consumers are
The FCC announced that savings from its
subscribing to faster speed tiers and receiving faster
comprehensive reform of its Lifeline program reached
speeds than ever before. FCC analysis indicates that
nearly $214 million in 2012, surpassing the $200 million
the improvements of internet service providers in
target the FCC set when it reformed the program.
meeting their advertised speeds were largely driven
The FCC also announced the selection of 14 pilot
by improvements in network performance, and not
projects in 21 states and Puerto Rico that will
downward adjustments to the speed tiers offered.
field test approaches to using Lifeline to increase
Nearly half of consumers who subscribed to speeds
broadband adoption among low-income Americans,
of less than 1 Mbps six months ago have adopted
providing broadband for nearly 75,000 low-income
higher speeds, and nearly a quarter of the users who
consumers who lack service.
subscribed to speeds between 1 Mbps and 3 Mbps
have upgraded to faster speed tiers.
12 | Summary of Performance & Financial Information FY 2013

As the nation’s demand for wireless
broadband service continues to
grow at a rapid pace, the FCC
continues its work to remove
barriers to the deployment of
infrastructure that supports such
service. The Commission adopted
a Notice of Proposed Rulemaking
(NPRM) initiating a review of its
wireless infrastructure policies. The
NPRM builds upon the Broadband
Acceleration Initiative, including
a 2011 Notice of Inquiry seeking
comment on measures needed
to reduce obstacles to obtaining
access to rights-of-way and
locations for wireless facilities.
The NPRM sought comment on
(1) streamlining the environmental
and historic preservation review
processes for newer technologies;
(2) removing barriers to the
deployment of temporary towers
that are used in cases of
emergencies or adding capacity
during short term events; and (3)
clarification of issues addressed
in the Commission’s “shot clock”
order which set time periods for
state and local governments to
complete review of wireless siting
applications. Increasing certainty
in the FCC’s processes and
removing barriers to infrastructure
deployment will spur public
and private investment, while
expanding wireless coverage and
capacity throughout the nation.
fcc.gov | 13

Maximize Benefits of Spectrum

Maximize the overall benefits of spectrum for the United States.
The Commission took actions significantly advancing
America’s first Mobility Fund auction was held during
the President’s goal of freeing up 500 MHz of spectrum
the past year. This market-based policy innovation
for broadband by 2020. It approved freeing up 40
was part of the Commission’s reform of the Universal
MHz of underutilized satellite spectrum for land-
Service Program last year, which allocated $300 million
based mobile broadband, including 4G LTE. This
in savings from cutting waste and inefficiency to a
was accomplished by removing regulatory barriers
new Mobility Fund aimed at closing gaps in mobile
that limited this spectrum to satellite use. The
coverage across the country. As a result of the auction,
Commission also unanimously approved a proposal
new mobile infrastructure deployment will begin in 31
setting the stage for an auction of H Block spectrum
states in areas that currently lack access to 3G or 4G
(1915-1920 MHz and 1995-2000 MHz). Proceeds
mobile service. In total, up to 83,000 U.S. road miles
from this auction will help fund a nationwide Public
on which millions of Americans live, work, or travel
Safety Network for first responders and reduce the
will gain access to advanced mobile networks that
deficit. Carefully balanced technical requirements will
significantly enhance opportunities for jobs, education,
unlock tremendous value in both of these frequency
healthcare and public safety. As part of the auction
bands, which Congress directed the FCC to auction.
rules, winning companies must make their networks
available to other providers for roaming so that as
The FCC adopted revised rules to enable Wireless
many consumers as possible can benefit from the
Communications Service (WCS) licensees to use
new networks.
a total of 30 MHz of underutilized spectrum in the
2.3 GHz band for wireless broadband services,
The FCC moved to significantly modify the
while protecting the adjacent Satellite Digital Audio
Commission’s Part 15 rules governing unlicensed
Radio Service (SDARS) operator, Sirius XM Radio,
communication equipment in the 57-64 GHz band.
against harmful interference. The revised rules are
The new rules will enhance the use of unlicensed
consistent with a compromise proposal between
spectrum as a relatively low cost, high capacity short
AT&T and Sirius XM designed to facilitate the efficient
range backhaul alternative to connect wireless
deployment and coexistence of the WCS and SDARS.
broadband networks and for other wireless
applications. Unlicensed spectrum technologies
The Commission proposed to make available 100
have the potential to encourage competition in the
megahertz of shared spectrum in the 3.5 GHz Band
broadband market, promote efficient delivery of
using small cell and database technologies. A Notice
broadband services in residences and businesses,
of Proposed Rulemaking was adopted which broadly
and improve user experience with consumer devices
reflects the innovative thinking of the President’s Council
needing short-range, high data rate communications.
of Advisors on Science and Technology, which issued
a report recommending spectrum sharing and small
The FCC took the first steps to unleash significant
cell use in the 3.5 GHz Band. It also builds upon the
additional spectrum to accelerate the growth and
FCC’s previous work to free up spectrum by promoting
expansion of new Wi-Fi technology that can offer
spectrum sharing and enabling innovative licensing
faster speeds, increase overall capacity, and reduce
techniques. The proposal lays the groundwork for
congestion. It proposed to make up to 195 MHz of
the widespread deployment of small cell technologies
additional spectrum in the 5 GHz band available to
and would spur significant innovation in wireless
unlicensed wireless devices. The Commission also
technologies and applications while protecting
made significant changes to its Part 5 Experimental
incumbent users in the band.

14 | Summary of Performance & Financial Information FY 2013

Radio Service by creating a more flexible framework
established government-to-government working
to support the rapid pace of technological innovation.
arrangements that have been operating to help
These changes add three new types of experimental
ensure optimal outcomes for all three countries.
licenses as well as revise and streamline existing
rules and procedures for experimenting, testing, and
The FCC and Industry Canada have agreed on three
marketing radio frequency devices, while protecting
interim spectrum sharing arrangements covering a
incumbent licensees from interference.
range of wireless communications operations along
the U.S.-Canada border. The arrangements, which
The FCC and the U.S. Department of State have
govern various spectrum bands, will enable greater
been engaged in ongoing discussions with their
wireless broadband deployment, improved general
counterparts in Canada and Mexico concerning the
aviation air-to-ground communications services, and
Commission’s planned Broadcast Television Incentive
more efficient use of spectrum for specialized mobile
Auction. The U.S. and its neighboring countries have
radio services.
fcc.gov | 15

Empower and Protect Consumers

Empower consumers by ensuring that they have the tools and information they need to
make informed choices; protect consumers from harm in the communications market.
The Commission announced that participating U.S.
The FCC raised the standards for providers of
wireless companies met or beat the deadline to provide
Speech-to-Speech (STS) Relay Service in order to
wireless customers with free, automatic alerts when
improve the experience for persons with a speech
they approach or exceed plan limits for data, voice, and
disability who need the service in order to make
text, as well as alerts for international charges. This
telephone calls using their own voice or an assistive
marks significant progress in the Commission’s effort to
voice device. Speech-to-speech uses specially
eliminate ‘bill shock.’ Bill shock occurs when wireless
trained operators, known as Communications
customers experience a sudden, unexpected increase in
Assistants (CAs), to relay conversations back and
their monthly bill as a result of unknowingly exceeding
forth between the individual with the speech disability
plan limits or incurring significant international charges.
and the other party to the call. CAs are trained to
understand a variety of speech disorders, which
In December 2012, the FCC and its public and
enables them to repeat what the caller says in a
private sector partners released a new online tool, the
manner that makes the caller’s words clear and
“Smartphone Security Checker,” to help consumers
understandable to the called party.
protect their mobile devices. The “Smartphone
Security Checker” is a free, easy-to-use online tool
The FCC took long-overdue steps to ensure that the
that creates a 10-step action plan to help consumers
rates for interstate long-distance calls made by prison
protect their mobile devices from smartphone-related
inmates are just, reasonable and fair. The Commission’s
cybersecurity threats. Almost half of Americans now
reforms adopt a simple and balanced approach that
own a smartphone and close to 20% have been the
protects security and public safety needs, and ensures
victim of mobile cybercrime.
providers receive fair compensation while providing
reasonable rates to consumers. The reforms require
The Commission took action to protect the privacy
that all interstate inmate calling rates be based on the
of consumers of wireless services by clarifying its
cost of providing the inmate calling service, and
customer proprietary network information (CPNI)
require mandatory data collection, annual certification,
policies in response to changes in technology and
and enforcement provisions to ensure compliance.
market practices in recent years. Specifically, the
Commission made clear that when mobile carriers
The FCC unanimously adopted comprehensive
use their control of customers’ devices to collect
reforms to further protect and strengthen the Video
information about customers’ use of the network,
Relay Service (VRS) program that enables people
including using preinstalled apps, and the carrier or its
with disabilities to do what most Americans take
designee has access to or control over that information,
for granted: make a simple phone call. The VRS
carriers are required to protect that information in the
program permits people with hearing disabilities
same way they are required to protect CPNI on the
to use American Sign Language to communicate
network. This sensitive information can include phone
with other individuals over a broadband connection.
numbers that a customer has called and received
The program is financed through the FCC’s
calls from, the durations of calls, and the phone’s
Telecommunications Relay Services (TRS) Fund.
location at the beginning and end of each call.
16 | Summary of Performance & Financial Information FY 2013

The FCC’s Enforcement Bureau is the primary
to repay the Telecommunications Relay Service Fund
organization responsible for enforcing provisions of the
more than $480,000 in overpayments and interest.
Communications Act, the Commission’s rules and
In addition, the company will make a $900,000
orders, and various licensing terms and conditions.
voluntary contribution to the U.S. Treasury. The
Numerous enforcement actions were taken in FY 2013.
company also must implement a robust compliance
Notable examples of these actions include the following:
plan including new operating procedures,
comprehensive re-training of its employees and
The FCC’s Enforcement Bureau took action against
contractors, and periodic reporting requirements.
individuals for advertising and selling signal jamming
devices on craigslist.org. These actions resulted from
Two affiliated Oklahoma companies participating
aggressive undercover operations. Signal jamming
in the FCC’s Lifeline program for low-income
devices, or “jammers,” are radio frequency transmitters
consumers, TerraCom, LLC and YourTel America,
that intentionally block, jam, or interfere with
Inc., have agreed to pay more than $1 million in
authorized communications such as cell phone calls,
reimbursements and voluntary contributions to the
text messages, GPS systems, and Wi-Fi networks.
U.S. Treasury. The enforcement action was brought
Jammers are indiscriminate. They can block critical
under the FCC’s new Lifeline rules guarding against
public safety and other emergency communications
waste, fraud, and abuse, which made clear that only
along with the targeted transmissions. As a result, it
one Lifeline subscription is allowed per household
is a violation of federal law to market, sell, or use a
and initiated a process to scrub carrier rolls for
jammer in the United States.
duplicate subscribers.
The FCC proposed a $5,000,000 forfeiture against
Level 3 Communications, LLC, resolving an
NobelTel, LLC for deceptively marketing prepaid calling
investigation into the company’s rural call completion
cards to consumers. Such cards are commonly sold in
practices, has agreed to meet rigorous, verifiable
convenience stores and gas stations across the country.
call completion standards and to provide extensive
With this enforcement action, the FCC has now
records that will assist in FCC enforcement of rules
proposed forfeitures totaling $30 million against six
protecting against failed calls to rural areas. Level 3
carriers to combat the deceptive marketing of prepaid
will also make a $975,000 voluntary contribution to
calling cards. In each of the six enforcement actions,
the U.S. Treasury, and has agreed to make additional
the FCC found that carriers targeted immigrant
$1 million voluntary contributions going forward if it
populations and claimed that buyers could make
misses specified quarterly benchmarks.
hundreds or thousands of minutes of telephone calls
to their native countries for just several dollars. However,
Two providers of automatically dialed calls using
buyers could make calls for only a fraction of those
prerecorded or artificial voice messages, known
minutes due to the carriers’ assessment of various fees
as “robocalls,” were issued citations for making
that were not clearly and conspicuously disclosed.
millions of robocalls to wireless phones without
prior authorization from the call recipients. The
A provider of Video Relay Services (VRS) has agreed
FCC Enforcement Bureau conducted investigations
to pay nearly $1.4 million to settle two federal
and issued citations to Dialing Services, LLC and
investigations. The settlement resolves allegations
Democratic Dialing. The citations require each
of improper payments from the federal fund that
company to certify within fifteen calendar days that
supports VRS. The investigations by the FCC
it has ceased making robocalls to wireless phones
examined whether the provider, CSDVRS, LLC,
without prior authorization, and that the calls it makes
improperly billed for VRS calls that were actually
include the required identifications.
generated by its own employees. CSDVRS agreed
fcc.gov | 17

Promote Innovation, Investment, and

America’s Global Competitiveness

Promote innovation in a manner that improves the nation’s ability to compete in the global
economy, creating a virtuous circle that results in more investment and in turn enables
additional innovation.
The FCC adopted a Report and Order establishing
The FCC launched a new and improved LEARN
rules to help speed the deployment of Internet services
(Learn Everything About Reverse-Auctions Now)
onboard aircraft. The Commission’s action enables
website with enhanced online resources as a one-stop
broadband providers to meet increasing consumer
information resource for incentive auction stakeholders,
demands and promotes the economic growth and
particularly for the nation’s broadcasters. The new
job-creating impacts of ubiquitous broadband. Since
LEARN website provides easy access to a range
2001, the Commission has authorized a number of
of useful information and resources that will help
companies, on an ad hoc basis, to operate Earth
broadcasters and other stakeholders make more
Stations Aboard Aircraft (ESAA), i.e., earth stations on
informed business decisions about participating in
aircraft communicating with Fixed-Satellite Service (FSS)
the incentive auction, which the FCC anticipates
geostationary-orbit space stations. Installed on the
holding in 2015. It also offers valuable information
exterior of the aircraft, the satellite antenna carries
about the proposed incentive auction process and the
the signal to and from the aircraft, providing two-way
unique business opportunities created by incentive
in-flight broadband services to passengers and flight
auctions. The FCC’s broadcast television spectrum
crews. The Report and Order formalizes ESAA as a
incentive auction will be the first such auction ever
licensed application in the FSS and establishes a
attempted anywhere in the world. The auction will
regulatory framework for processing applications
present a significant financial opportunity for many
while ensuring other radio service operations are
broadcasters, and it will enhance the ability of
protected from harmful interference.
broadcasters who remain on the air to continue
providing the public with diverse, local, free over-the-
An agency-wide Technology Transitions Policy Task
air television service. At the same time, the spectrum
Force was initiated. Among issues for its consideration,
reclaimed through the incentive auction will promote
the Task Force will coordinate the Commission’s efforts
economic growth and enhance America’s global
on IP interconnection, resiliency of 21st century
competitiveness by increasing the speed, capacity
communications networks, business broadband
and ubiquity of mobile broadband services such as
competition, and consumer protection with a particular
4G LTE and Wi-Fi-like networks.
focus on voice services. The Task Force will also
consider recommendations from the Technological
As part of ongoing regulatory reform efforts, the
Advisory Committee on the PSTN Transition,
Commission adopted a Report and Order to further
coordinate with the NARUC Presidential Task Force
modernize its international telephony rules, lower costs,
on Federalism and Telecommunications, and evaluate
and increase competition. The Report and Order
the feedback from the Commission’s field hearings
eliminates outdated regulations governing agreements
on Superstorm Sandy. The Task Force will conduct
between U.S. and foreign carriers for delivering
a data-driven review and provide recommendations
international phone traffic, while strengthening the
to modernize the Commission’s policies in a process
Commission’s ability to protect U.S. consumers from
that encourages the technological transition, empowers
the effects of anticompetitive conduct by foreign
and protects consumers, promotes competition, and
carriers where specific complaints arise.
ensures network resiliency and reliability.
18 | Summary of Performance & Financial Information FY 2013

The FCC’s International Bureau released its annual
burdens. Over the years, the Commission has updated
circuit status report for U.S facilities-based international
the rules for space stations and earth stations, which
common carriers. The report shows that the volume
transmit radio signals between the ground and
of international telephone calls, private line services
satellites, to keep pace with industry developments.
and other services from the United States grew by
This action represents the most wide-ranging review
18% in one year.
of FCC rules and policies in nearly two decades. The
Commission’s Report and Order eliminates unneeded
The Commission comprehensively modernized and
technical and information filing requirements, updates
streamlined its rules governing satellite communications
rules to better accommodate evolving technology,
to foster investment and innovation by removing
and simplifies existing requirements.
unnecessary regulations and easing administrative
fcc.gov | 19

Promote Competition

Ensure a competitive market for communications and media services to foster innovation,
investment, and job creation, as well as to ensure consumers have meaningful choice in
affordable services.
The Commission adopted its 15th Report to Congress
differently no longer seems to exist. The proceeding
on the status of competition in the market for the delivery
also furthers the Commission’s mandate to evaluate
of video programming. The Report, which covers 2011
its rules to make certain they continue to serve the
and 2012, measures the market’s progress toward
public interest.
increasing competition and diversity in multichannel
video programming distribution, increasing the availability
The FCC released a Fifth Order on Reconsideration and
of satellite delivered programming, and spurring the
a Sixth Report and Order that expand low power radio
development of communications technologies.
opportunities for diverse media voices nationwide.
Specifically, the Commission found that the number of
Processing approximately 6,000 FM translator
Multichannel Video Programming Distributor (MVPD)
applications and setting updated rules are the last steps
subscribers grew from 100.8 million to 101.0 million
necessary before opening a window for community
households between year-end 2010 and June 2012.
groups to apply for new low power FM licenses.
During this period, cable’s share of MVPD subscribers
fell from 59.3 percent of all MVPD video subscribers to
The Commission proposed a forfeiture of $2.25 million
55.7 percent at the end of June 2012. Between year-
against a company that operates a cable system in
end 2010 and June 2012, Direct Broadcast Satellite
Houston, Texas, for retransmitting the signals of six
(DBS) MVPDs and telephone MVPDs gained both video
television broadcast stations without their consent. The
subscribers and market share. DBS MVPDs accounted
Commission’s Media Bureau launched an investigation
for 33.1 percent of all MVPD subscribers in 2010,
of TV Max, Inc. (doing business as “Wavevision”), and
increasing to 33.6 percent at the end of June 2012.
other related entities, based on complaints from four
Telephone MVPDs represented approximately 6.9
major television broadcasters alleging that TV Max
percent of all MVPD subscribers in 2010, increasing to
retransmitted their stations’ signals without permission.
an estimated 8.4 percent. At the end of June 2012,
The Commission found TV Max’s violations to be very
AT&T’s U-Verse and Verizon’s FiOS services combined
serious, warranting a substantial penalty given the
had 8.6 million video subscribers. Since the last report,
longstanding unauthorized retransmission that continued
the number of households relying exclusively on over-
even after TV Max was warned about its actions.
the-air broadcast service remained steady at
approximately 11.1 million households, although the
percentage of all households they represent increased
slightly from 9.6 percent in 2011 to 9.7 percent in 2012.
The FCC initiated a proceeding to consider eliminating
a provision that gives special treatment to UHF channels
under its national television ownership cap. Called
the UHF discount, the provision was adopted nearly
30 years ago when UHF signals were regarded as
technically inferior to VHF signals in analog television
broadcasting. With the transition of full-power stations
to digital broadcasting in 2009, the technical inferiority
of UHF appears to be a thing of the past. Therefore,
the technical justification for treating UHF channels
20 | Summary of Performance & Financial Information FY 2013

Advance Key National Purposes

Through international and national interagency efforts, advance the use of broadband for
key national purposes.
Acting to expand
sophisticated lab and testing facilities, patients will
access by health care
benefit greatly from broadband services that can reduce
providers to robust
the time, expense, and stress of travelling to receive
broadband networks,
medical care. Up to $50 million over three years will
the Commission
be available for these competitively-awarded pilots.
established the
Healthcare Connect
The FCC initiated a thorough review and modernization
Fund. The FCC’s
of the E-rate (schools and libraries) program built
existing Rural Health
around three goals: increased broadband capacity,
Care program,
cost-effective purchasing, and streamlined program
established by the 1996 Telecommunications Act,
administration. The Commission’s initiative marks the
was not effectively structured to expand the reach of
first comprehensive update of the E-rate program
broadband health care networks. In 2006, the FCC
since 1997. According to a survey of E-rate applicants,
launched its Rural Health Care Pilot Program to learn
half had slower connection speeds than the average
how to more effectively support these networks, and
American home and 39% cited cost of service as
it now funds some 50 active pilots across the nation.
the greatest barrier to better meeting their needs.
The FCC highlighted lessons learned from these pilots,
One quarter of libraries still have broadband speeds
including a South Carolina consortium that saved
of 1.5 Mbps or less, and only 9 percent of libraries
$18 million in Medicaid costs by using telepyschiatry,
have speeds of 100 Mbps or greater. In light of these
and a group of health care providers in the Midwest
findings, there is growing consensus that E-rate
that saved $1.2 million in intensive care unit services.
needs to be updated and revitalized with a renewed
Informed by these and other success stories, the new
focus on ensuring that all schools and libraries have
Healthcare Connect Fund will help expand access
affordable access to high-capacity broadband.
by health care providers to the high-bandwidth
connections they need for modern telemedicine by
The FCC’s Office of Native Affairs and Policy (ONAP)
(1) removing artificial limitations on technology that
released a report detailing its engagement with more
hampered legacy universal service health care support;
than 400 Tribal Nations and travel to 42 federal Indian
(2) encouraging consortia between smaller rural health
Reservations since the Office’s inception in the summer
care providers and urban medical centers to enable
of 2010. ONAP’s work with Tribes is focused on bringing
remote hospitals and clinics to draw on the medical,
modern communications infrastructure and the
technical and administrative resources of larger
resulting benefits to Tribal Nations and Native
providers; and (3) covering upgrades to higher-speed
communities throughout the United States. ONAP is
service required for health care applications. The
responsible for developing and driving a Commission-
Fund will allow thousands of new providers across
wide Tribal agenda and ensuring Tribal voices are
the country to share in the benefits of connectivity
taken into account in Commission proceedings.
and dramatically cut costs for both hospitals and the
Significant accomplishments, the report states, “are
Universal Service Fund.
reflected in the Commission’s new rules, proposed
rules, and new policies with respect to Tribal Nations.
In addition, the reforms establish a new competitive
These indicators of success include new levels
pilot program to test expanding broadband healthcare
of dialogue and reporting, new licensing priority
networks to skilled nursing facilities. Because these
opportunities, and increased support and investment
facilities are often remote from doctors and
through universal service support mechanisms.”
fcc.gov | 21

Public Safety and Homeland Security

Promote the availability of reliable, interoperable, redundant, and rapidly restorable
critical communications infrastructures that are supportive of all required services.
The Commission announced that the nation’s four
Public Safety and Homeland Security Bureau. The
largest wireless carriers – AT&T, Verizon, Sprint, and
Bureau’s recommendations resulted from an in-depth
T-Mobile – agreed to accelerate the availability of
inquiry into the widespread 911 service failures that
text-to-911, with a commitment to nationwide
occurred after a derecho storm hit portions of the
availability by May 15, 2014. Building on text-to-911
Midwest and Mid-Atlantic in June 2012. A significant
deployments and trials that are already underway, this
number of 911 systems and services were partially or
agreement will accelerate progress and ensure that
completely down for several days after the derecho.
over 90 percent of the nation’s wireless consumers,
In all, 77 911 call centers serving more than 3.6 million
including millions of consumers with hearing or speech
people lost some degree of connectivity, including vital
disabilities, will be able to access emergency services
information on the location of 911 calls. Seventeen 911
by sending a text message to 911 where local call
call centers lost service completely, leaving more than
centers are prepared to receive the texts. Text-to-911
two million residents unable to reach emergency services.
will provide consumers with enhanced access to
emergency communications in situations where a
The FCC proposed action to improve wireless network
voice call could endanger the caller, or a person with
reliability during disasters by requiring wireless service
disabilities is unable to make a voice call. In addition, to
providers to publicly disclose the percentage of cell
help eliminate consumer confusion while text-to-911
sites within their networks that are operational during
capability is being phased-in, the carriers have
and immediately after disasters. By providing consumers
committed to provide an automatic “bounce back”
with a yardstick for comparing wireless performance
text message to notify consumers if their attempt to
in emergencies, the FCC’s proposal could in turn
reach 911 via text message was unsuccessful
encourage competition in the wireless industry to
because this service is not yet available in their area.
improve network reliability. In a Notice of Proposed
The Commission’s proposed action also seeks to
Rulemaking, the FCC said that some wireless service
accelerate the nation’s transition to a Next Generation
disruptions may be unavoidable during emergencies,
911 system that will use cutting-edge communications
but the impact tends to vary among providers. For
technology to assist first responders in keeping our
example, Superstorm Sandy disabled approximately
communities safe.
25 percent of cell sites in the affected region, with more
than 50 percent of cell sites disabled in the hardest-hit
The FCC proposed action to improve the reliability and
counties, yet not all wireless networks were equally
resiliency of America’s 911 communications networks,
impaired. The FCC’s proposal would require wireless
especially during disasters, by ensuring that service
service providers to submit to the FCC, for public
providers implement vital best practices in network
disclosure on a daily basis during and immediately
design, maintenance, and operation. The Commission
after disasters, the percentage of operational cell sites
also proposed amending its rules to clarify how service
for each county within a designated disaster area.
providers can more effectively and uniformly notify
Information yielding these percentages is already
911 call centers of communications outages and
included in voluntary reports that wireless service
cooperate to restore service as quickly as possible.
providers submit to the FCC daily during disasters.
In a Notice of Proposed Rulemaking, the Commission
As part of National Cybersecurity Awareness Month,
moved forward to implement four key recommendations
the FCC unveiled an updated 2.0 version of the
for strengthening 911 service made by the FCC’s
Commission’s ‘Small Biz Cyber Planner,’ a free and
22 | Summary of Performance & Financial Information FY 2013

easy-to-use online resource for any small business
In another initiative during National Cybersecurity
owner who wants to better protect their business
Awareness Month, the FCC hosted a technology
from the growing threat of cybersecurity attacks.
exhibition and presentations on mobile security. The
Launched in 2011, the tool has already been used
day-long event is part of the FCC’s ongoing effort
by nearly 10,000 businesses across the country to
to promote awareness of cybersecurity threats and
create customized cybersecurity plans. New research
solutions in partnership with industry and others in
by Symantec, an FCC Cybersecurity Outreach Partner,
the public sector. Given America’s growing reliance on
indicates that nearly 83% of U.S. small businesses
mobile technology, and the importance of America’s
have no cybersecurity protection plan, despite the
digital infrastructure to the economy, it is imperative
fact that millions of cyber attacks occur each year.
that stakeholders work together to ensure the security,
reliability, and resiliency of cyber tools and infrastructure.
fcc.gov | 23

Operational Excellence

Make the FCC a model for excellence in government by effectively managing the Commission’s
human, information, and financial resources; by making decisions based on sound data
and analyses; and by maintaining a commitment to transparent and responsive processes
that encourage public involvement and best serve the public interest.
As part of its Data Innovation Initiative, the Federal
The Commission issued the FY 2013 Regulatory
Communications Commission continued the
Fee Notice of Proposed Rulemaking and FY 2013
modernization of its international reporting requirements.
Regulatory Fee Order, as well as successfully
In 2011, the Commission adopted a First Report
collecting regulatory fees for FY 2013. The FCC
and Order which eliminated a number of outdated
is self-funded through regulatory fees.
international reporting requirements and reduced
the number of international reports to just two: the
FCC managers and staff prepared and executed
Traffic and Revenue Report and the Circuit Status
response plans, evaluated agency performance, and
Report. The Second Report and Order, adopted
made corrective changes based on participation in
during the past year, further streamlines these two
the annual government-wide continuity of operation
reports by eliminating reporting requirements for over
planning exercise. The agency improved its disaster
a thousand small carriers and reducing the level of
readiness by holding tabletop exercises to practice
detail submitted by international service providers by
responses to various scenarios. In addition, the FCC
over 75 percent. Taken together, the Commission
conducted more frequent testing of its emergency
estimates these changes will reduce overall burdens
procedures and updated and implemented Occupant
industry-wide by nearly 30 percent.
Emergency Plans and Procedures for FCC Headquarters.
The FCC unanimously voted to modernize and
The FCC obtained a clean opinion on its FY 2013
improve its collection of data about broadband and
financial statements for the eighth consecutive year.
voice service in the U.S., while at the same time
Through responses provided to an audit performed
taking measures to streamline and reduce the burden
by the agency’s Inspector General, the FCC was able
on providers. These changes will improve the data
to demonstrate that it is in compliance with the
the agency uses to effectuate policies and programs
requirements of the Improper Payments Elimination
for expansion of access to broadband and voice
and Recovery Act. Additional accomplishments
service for all Americans. The FCC initiated its most
concerning financial management, process
comprehensive collection of broadband deployment
improvements, and systems modernization can be
data which will be used to populate and update
found in the FY 2013 Financial Information section
the National Broadband Map, a key resource on
of this document.
broadband deployment for consumers, policymakers,
researchers, economists and others. Reliable and
accurate deployment data are also critical to the
expansion of broadband to consumers in unserved
rural areas through the FCC’s Connect America Fund
and universal service program, and for the FCC’s
annual report to Congress on broadband availability.
24 | Summary of Performance & Financial Information FY 2013

FY 2013

Financial

Information

fcc.gov | 25

How We Managed Our Funds:

Message from Our

Chief Financial Officer

I am pleased to present the Commission’s financial statements for fiscal year (FY) 2013 and
to report that the Commission’s auditors issued an unmodified audit opinion on each of the
Commission’s financial statements for FY 2013. Furthermore, I am proud to say that this
is the eighth straight fiscal year the Commission has received an unmodified opinion. The
Commission is proud of the work of its staff to obtain and maintain an unmodified opinion.
26 | Summary of Performance & Financial Information FY 2013

During FY 2013, the Commission carried out its mission even as it dealt with the budgetary constraints of
sequestration. While difficult at times, we were committed to improving financial management and providing
the financial resources and business operations necessary to meet our strategic goals and objectives. We
maintained our process of evaluating and strengthening internal controls as well as building upon our goals
for financial systems modernization.
Throughout FY 2013, the Commission worked diligently on closing audit findings from previous audits. As a part
of this effort, the Commission made progress on resolving matters raised by its auditors in their FY 2012 audit
report. The Commission closed findings relating to its information technology control deficiencies and made
progress in resolving issues related to its financial management systems; however, there is still work to be done.
The Commission significantly completed transfer of most delinquent debts to Treasury. A large backlog had
accumulated in FY 2011; most of the issues associated with transferring debt were finally resolved in FY 2013.
We expect all of the delinquent debt to be referred to Treasury during FY 2014. Of special note, the Commission
also implemented a new time and attendance system which improved the user friendliness, efficiency, and
controls around time keeping records.
Significantly, for FY 2013 the Commission’s independent auditor did not report any material weaknesses for the
Commission or its reporting components. Despite these successes, work remains here at the Commission. The
FY 2013 audit reports point out two significant deficiencies related to internal controls and note 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.
The Commission is committed to improving its financial processes, fiscal integrity, minimizing the risk of improper
payments, and to reducing improper payments to the customers and beneficiaries of its reporting components.
The Commission continues to make improvements to the fiscal management, administration, and oversight of
funds reported by the Commission.
I look forward to FY 2014 and to making every effort to continue to strengthen the Commission’s and its reporting
components’ internal control environments, and to improve the effectiveness of the Commission’s and its reporting
components’ financial operations. The Commission will continue to modernize its financial systems to improve
the utilization of resources and accuracy of reporting.
  Mark Stephens
Chief Financial Officer
March 31, 2014
fcc.gov | 27

Key FY 2013 Financial Management

Accomplishments

Area
Accomplishment
The Commission continues to improve the administration of the Universal Service Fund (USF) and the
Telecommunications Relay Service (TRS) programs. In coordination with the Universal Service Administrative
Company (USAC) and the Department of Justice (DOJ), the Commission pursued wrongdoers who sought
to defraud the USF. In FY 2013, these efforts yielded cash recoveries of approximately $18.25 million for
TRS violations and $400,000 for E-rate violations.
Stewardship
over Funds
Additionally, through targeted audits known as In-Depth Data Validations (IDVs) initiated in June 2011 and
continuing through fiscal year 2013, the Commission has eliminated approximately 2 million duplicate
Lifeline subscriptions. Furthermore, the Commission executed four consent decrees with providers of TRS
to resolve investigations about questionable requests for reimbursement from the TRS Fund. The consent
decrees required the providers to pay almost $12 million back to the TRS Fund and to pay more than
$23 million to the US Treasury. Furthermore, each of the consent decrees includes provisions designed to
deter, prevent, and identify future instances of non-compliance.
In FY 2013, the Commission continued to promote greater use of technology to improve our regulatory fee
notification and collection process. Together with the U.S. Department of Treasury, the Commission took
further steps to meet the Office of Management and Budget (OMB) Open Government Directive. A component
of this directive is moving to a paperless platform. Going paperless is expected to produce cost savings,
reduce errors, and improve efficiencies across government. As of October 1, 2013, the Commission no
longer accepts checks for the payment of regulatory fees. This new paperless procedure requires that all
Process
payments be made by credit card, wire transfer, or ACH payment. This change will affect all payments for
Improvements
regulatory fees made on or after October 1, 2013.

Additionally, with the upgrade of the financial system mentioned below, the Commission was able to provide
better contract writing and management support capability. The updates to the system serve to improve upon
the capability to customize solicitation provisions and contract clauses and to capture and save contract
documents within the acquisition file. This functionality also moves the FCC several steps closer to the goal
of a paperless system. Furthermore, the Commission established a new Capital Planning and Investment
Control process (CPIC) to enhance information technology governance across the FCC.
During FY 2013, the Commission modernized its time and attendance process to WebTA. The WebTA system
provides FCC employees and supervisors with a self-service web-based solution that simplifies and automates
the entire timesheet creation, validation, and management process along with improving the accuracy,
management and reporting of time keeping records. Implementation of the new system also facilitated
stronger internal controls and significantly reduced the amount of time spent on processing timecards.
Systems
Modernization
In addition, the Commission conducted requirement sessions, business process reviews, conference room
pilots, and configuration tasks to upgrade its financial management system (Genesis) to the latest 7.0
release. The upgrade, which “went live” in January 2014, upgraded Genesis with the addition of 140+ new
enhancements. Several of these new features will allow the FCC to streamline its processes, increasing
efficiency, and productivity. The upgrade will provide functionality for implementation of the Government-
wide Treasury Account Symbol Adjusted Trial Balance System (GTAS) and other Treasury requirements.
The Commission’s ongoing partnership with the Small Business Administration led to increased contract
Procurement
awards to both small and small disadvantaged businesses. The agency consistently meets or exceeds
its goals for awarding contracts to Small Disadvantaged Businesses and Small Disadvantaged Veteran-
Owned Businesses.
28 | Summary of Performance & Financial Information FY 2013

Our Financial Results

This section contains condensed financial statement information, a description of our major balance sheet
components, cost of operations, and budgetary resources. We also present the results of our performance
in the area of financial management using established metrics. Our complete financial statements are available
on the FCC Web site at https://www.fcc.gov/encyclopedia/fcc-strategic-plan.

Net Position.

As of September 30, 2013, the agency’s total net position was $7,049.6 million, consisting
of Cumulative Results of Operations of $7,046.2 million and Unexpended Appropriations of $3.4 million.
Changes in Financial Position in FY 2013 (consolidated)
Net Financial Condition
(Dollars in Thousands)
2013
2012
Intragovernmental
Fund Balance with Treasury
$279,163
$361,739
Investments
7,200,600
6,548,090
Accounts Receivable
1,235
1,574
Other


Total Intragovernmental
$7,480,998
$6,911,403
Cash and Other Monetary Assets
$173,084
$139,322
Accounts Receivable, net
852,026
875,088
Loans Receivable, net
3,502
335
General Property & Equipment, net
47,590
56,832
Other
13,024
13,024
Total Assets
$8,570,224
$7,996,004
Intragovernmental
Accounts payable
$2,522

Debt
353

Other
89,558
168,897
Total Intragovernmental
$92,433
$168,897
Accounts Payable
$134,727
$110,523
Deferred Revenue
59,920
62,971
Prepaid Contributions
110,057
85,849
Accrued Liabilities for Universal Service
1,088,415
752,423
Other
35,036
39,578
Total Liabilities
$1,520,588
$1,220,241
Unexpended Appropriations
$3,394
$4,251
Cumulative Results of Operations
7,046,242
6,771,512
Total Net Position
$7,049,636
$6,775,763
Net Cost of Operations
$9,432,508
$9,536,699
Total Budgetary Resources
$14,373,177
$14,297,518
fcc.gov | 29

Assets

The chart below presents the total assets of the Commission as of September 30, 2013. The large Investments
balance of $7,200.6 million results from carryover in the USF Schools and Libraries Program and new High Cost
support mechanisms under the Connect America Plan that has not been implemented. The Remaining
Intragovernmental Assets balance of $280.4 million consists of Intragovernmental balances from Fund Balance
with Treasury and Accounts Receivable. The Accounts Receivable balance of $852 million is primarily composed
of USF receivables totaling $749.6 million.
Other Assets
13,024
Intragovernmental Investments
7,200,600
Accounts Receivable, net
852,026
Remaining Intragovernmental Assets
280,398
FY 2013 Total
Cash and Other Monetary Assets b
Assets
y Categor
173,084

Loans Receivable, net
3,502
y (Dollars in Thousands)
General PP&E
47,590
Other Assets
Intragovernmental Investments
Accounts Receivable, net
Remaining Intragovernmental Assets
Cash and Other Monetary Assets
Loans Receivable, net
General PP&E
Category
%
Assets
Intragovernmental Investments
84%
$7,200,600
Accounts Receivable, net
10%
$852,026
Remaining Intragovernmental Assets
3%
$280,398
Cash and Other Monetary Assets
2%
$173,084
General PP&E
1%
$47,590
Other Assets
<1%
$13,024
Direct Loans Receivable, net
<1%
$3,502
Total Assets
$8,570,224.00
30 | Summary of Performance & Financial Information FY 2013

Liabilities

The chart below presents the total liabilities of the Commission as of September 30, 2013. The Commission’s
most significant liabilities were Accrued Liabilities for Universal Service of $1,088.4 million and Accounts Payable
of $134.7 million, which accounted for over 80% of total liabilities as of September 30, 2013. The Accrued
Liabilities for Universal Service represent the expected October (FY 2014) payments for the Universal Service
Fund High Cost and Low Income Programs and the Telecommunications Relay Service Program. The
Intragovernmental of $92.4 million is primarily composed of custodial collections earned on spectrum auctions
Accounts Payable
134,727
$
0.088602
and miscellaneous receipts.
Deferred Revenue
59,920
$
0.039406
Prepaid Contributions
$ 1 10,057
0.072378
Total Intragovernmental
92,433
$
0.060788
Other
35,036
$
0.023041
Accrued Liabilities for
Universal Service
1,088,415
$
0.715786

1,520,588
$
FY 2013 Total Liabilities by Category (Dollars in Thousands)
Accounts Payable
Deferred Revenue
Prepaid Contributions
Total Intragovernmental
Categor
Other
y
%
Liabilities
Accrued Liabilities for Universal Service
Accrued Liabilities for Universal Service
72%
$1,088,415
Accounts Payable
9%
$134,727
Prepaid Contributions
7%
$110,057
Total Intragovernmental
6%
$92,433
Deferred Revenue
4%
$59,920
Other
2%
$35,036
Total Liabilities
$1,520,588
fcc.gov | 31

Costs

The chart below presents the total gross costs of each Commission program as of September 30, 2013. The costs
are aligned with the eight strategic goals of the Commission: Connect America, Maximize Benefits of Spectrum,
Promote Innovation, Investment, and America’s Global Competitiveness, Promote Competition, Protect and
Empower Consumers, Public Safety and Homeland Security, Advance Key National Purposes, and Operational
Excellence. Gross costs for each goal are presented individually while revenue is presented in total rather than
by goal. The program costs for the USF, TRS, and NANP are included within the Promote Competition strategic
goal. As a result of the accounting for these activities, the cost for this goal may be significantly higher than the
Promote Competition
9,580,394
0.965852763
Operational Excellence
92,807
cost of the seven other goals. For clarity
0.009356389
, a separate pie chart has been added to show the program costs by goal
Maximize Benefits of Spectrum
79,655
0.008030463
for FCC only. Contributions received for the USF and TRS programs are shown on the Statement of Changes in
Protect and Empower Consumers
52,155
0.005258035
Public Safety and Homeland Security
Net Position and do not dir
47,359
ectly of
0.004774524
fset the costs of these programs on the Statement of Net Cost.
Connect America
47,037
0.004742061
Advance Key National Purposes
10,000
0.001008156
Promote Innovation, Investment, and America's
Global Competitiveness
9,697
FY 2013 Total Gross Costs (Dollars in Thousands)
9,919,104.00
Category
%
Gross Costs
Promote Competition
97%
$9,580,394
Operational Excellence
1%
$92,807
Maximize Benefits of Spectrum
1%
$79,655
Protect and Empower Consumers
1%
$52,155
Public Safety and Homeland Security
<1%
$47,359
Connect America
<1%
$47,037
Advance Key National Purposes
<1%
$10,000
Promote Innovation, Investment, and
<1%
$9,697
Promote Competition
113,399
0.250822257
America’s Global Competitiveness
Operational Excellence
92,807
0.205275719
Total Gross Costs
$9,919,104
Maximize Benefits of Spectrum
79,655
0.176185389
Promote Competition
Operational Excellence
Protect and Empower Consumers
52,155
0.115359349
Maximize Benefits of Spectrum
Public Safety and Homeland Security

Protect and Empower Consumers
47,359

0.104751288
Public Safety and Homeland Security
Connect America
Connect America
47,037

0.10403907
Advance Key National Purposes
10,000
0.02211856
Advance Key National Purposes
Promote Innovation, Investment, and

America's
Global Competitiveness
9,697
FY 2013 T
0.021448368
otal Gross Costs (Dollars in Thousands)
452,109.00
Excludes USF, TRS and NANP
Category
%
Gross Costs
Promote Competition
25%
$113,399
Operational Excellence
21%
$92,807
Maximize Benefits of Spectrum
18%
$79,655
Protect and Empower Consumers
12%
$52,155
Public Safety and Homeland Security
10%
$47,359
Connect America
10%
$47,037
Advance Key National Purposes
2%
$10,000
Promote Innovation, Investment, and
2%
$9,697
America’s Global Competitiveness
Total Gross Costs
$452,109
Promote Competition
Operational Excellence
Maximize Benefits of Spectrum
32 | Summary of Per
Protect and Empower Consumers formance & Financial Information FY 2013
Public Safety and Homeland Security
Connect America
Advance Key National Purposes

Budgetary Resources

The bar graph below provides information on how budgetary resources were made available to the Commission
for the year and the status of those budgetary resources at the end of the year. The Commission receives most
of its budgetary authority from appropriations. Budgetary resources consist of the resources available to the
Commission at the beginning of the year, plus appropriations, spending authority from offsetting collections, and
other budgetary resources received during the year. The Commission had $14.4 billion in budgetary resources
of which $11 billion was obligations incurred and $3.4 billion remained unobligated. The graph below presents
the status of budgetary resources comparatively between FY 2013 and FY 2012.
2012
2011
Obligations Incurred
1
$ 1,005,908 $ 1
1,090,551
Unobligated Balance
$ 3,367,269

3,206,967
$
$ 14,375,189

14,299,529
$
Status of Budgetary Resources – FY 2013 and 2012 (Dollars in Thousands)
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
Obligations Incurred
Unobligated Balance
2012 2011
Category
FY 2013
FY 2012
Obligations Incurred
$11,005,908
$11,090,551
Unobligated Balance
$3,367,269
$3,206,967
Total Budgetary Resources
$14,373,177
$14,297,518
fcc.gov | 33

Financial Management Indicators

Financial Management Indicators for FY 2013
Indicator
Status
Debt Management
Eligible delinquent debt transferred to Treasury
95.8%
Funds Management
Fund balance with Treasury (Identifies the difference between the fund balance reported in Treasury
100% reconciled
reports and the agency fund balance with Treasury recorded in its general ledger on a net basis)
Payment Management
Timely vendor payments (per Prompt Payment Act)
98.5%
Percentage of interest penalties to vendor invoices paid
0.003%
Timely payments for Centrally Billed (travel) Accounts (CBA)*
100%
Timely payments for employee Purchase Cards*
100%
Percentage of travel vouchers processed within 10 business days
89.9%
*The Office of Management and Budget threshold for delinquency is 61 days.
34 | Summary of Performance & Financial Information FY 2013

fcc.gov | 35

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TTY: 1-888-TELL-FCC (1-888-835-5322)
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