FY 2012 Summary of Performance and Financial Information
Summary of
Performance & Financial Information
FY 2012
Message from Our Chairman
I am pleased to present the Federal CommunicationsCommission’s (FCC or Commission) Fiscal Year (FY) 2012
Summary of Performance and Financial Information.
This report bolsters the FCC’s accountability by making
key performance information publicly available. The
report provides a concise description of the Commission’s
performance and financial information for FY 2012.
The FCC’s mission centers on maximizing the opportunities of broadband and other communications networks
and technologies for the U.S. Wired and wireless broadband is unleashing waves of innovation and massive
private investment throughout the country, increasing opportunity and prosperity, driving American global
competitiveness, connecting our country, strengthening our democracy – and transforming lives for the better.
Over the past few years, the U.S. has regained global leadership in key areas of the broadband economy,
including advanced mobile technology, apps, and services, and there are many signs that the information and
communications technology sector is flourishing. Still, challenges remain to fully unlock the benefits of broadband
for all Americans and to keep pace with our global competitors.
I welcome the opportunity to highlight how the FCC has fulfilled its important role in pursuing these goals in
FY 2012. Some of the Commission’s key actions over the past year include:
Unleashing Spectrum for Broadband
spectrum policy. Developed by the FCC in the 2010 National Broadband Plan, the incentive auction will use
market forces to repurpose valuable spectrum in the broadcast television bands for licensed and unlicensed
wireless broadband.
• We continued to remove outdated rules and restrictions on spectrum that prevent its use for broadband,
including freeing up 30 megahertz in the Wireless Communications band.
Connect America and Lifeline Reform
Connect America Fund and the Mobility Fund to extend wired and wireless broadband throughout the country.
Through the Mobility Fund, we conducted the country’s first-ever reverse auction for universal service support,
efficiently using $300 million to extend high-speed mobile broadband coverage to up to 83,000 road miles
across 31 states.
• We overhauled the Lifeline program that assists low-income families in maintaining phone service. Building
on recommendations from the Federal-State Joint Board on Universal Service, the Commission substantially
strengthened protections against waste, fraud, and abuse. This year alone, we have exceeded our $200
million savings target from these reforms, with savings being used in part to connect low-income Americans
to broadband.
2 | Summary of Performance & Financial Information FY 2012
Promoting Competition
public interest. Our review of the Verizon Wireless-SpectrumCo transaction resulted in a significant competition-
enhancing divestiture of spectrum. The companies’ commercial agreements were also substantially modified
to preserve incentives to compete and invest in broadband networks.
• The FCC approved over 250 wireless applications involving nearly 2,000 spectrum licenses, valued at billions
of dollars.
Empowering Consumers and Protecting Public Safety
industry-based recommendations to secure the Domain Name System (DNS), to improve the security of
Internet routing protocols, and to combat botnets. When fully implemented, these measures will strengthen
the security of the networks of the ISPs that provide Internet access to over 92 percent of U.S. residential
broadband users.
• We continued implementation of the Twenty-First Century Communications and Video Accessibility Act
of 2010 to ensure that the 54 million Americans with disabilities are able to fully utilize and benefit from
advanced communications services, including adoption of rules that require closed captioning of broadcast
television video content posted on the Internet.
• We enhanced the ability of Tribal Nations to increase their ownership of broadcast facilities in their
communities to provide radio services.
• Through the Commission’s Enforcement Bureau, we cracked down on companies who seek to prey on
communications consumers through deceptive marketing practices, aggressively pursuing fraudulent
prepaid calling card schemes (including $10 million in penalties).
• We made interference detection and resolution involving public safety frequencies – e.g., interference to
air traffic control, the U.S. Coast Guard, and state and local police and fire department communications –
one of our highest priorities, responding to public safety and safety of life interference matters within 24 hours.
Agency and Regulatory Reform
• We improved regulatory processes consistent with President Obama’s Executive Orders, including integration
of more rigorous cost-benefit analysis into rulemaking proceedings; reduction of agency backlogs; and
retrospective analysis and elimination of regulations that were overly burdensome, out of date, or otherwise
impeded economic growth and development.
• We continued to expand the use of new technologies to improve the operations of the Commission and
communicate more effectively with the public. We moved certain reporting requirements relating to television
broadcasters online and made additional data available to empower app developers and consumers to use
information in innovative ways.
The FCC also makes available its FY 2012 Annual Performance Report, including progress towards fulfilling
its strategic goals and meeting the performance commitments in its FY 2012 Annual Performance Plan. This
document is located at http://www.fcc.gov/encyclopedia/fcc-strategic-plan. At this link, the FCC has also
posted its FY 2012 Agency Financial Report, which provides a comprehensive look at the FCC’s financial
operations for the past fiscal year. I am pleased to note that for the seventh consecutive year, the FCC obtained
an unqualified or “clean” audit opinion on its financial statements.
Julius Genachowski
Chairman
February 15, 2013
fcc.gov | 3
FY 2012
Performance
Summary
4 | Summary of Performance & Financial Information FY 2012Overview of the
Federal Communications Commission
The Federal Communications Commission (FCC or Commission) has chosen toproduce this Summary of Performance and Financial Information to provide a
citizen-friendly document summarizing the FCC’s financial status and performance
for Fiscal Year 2012 (October 1, 2011 through September 30, 2012). 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 2012. Both
are available online on the Commission’s website at http://www.fcc.gov/encyclopedia/fcc-strategic-plan.
fcc.gov | 5
About the FCC
The FCC is an independent regulatory agency of theunexpired 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
The Chairman and the Commissioners at the
Act (ADA). The Commission’s headquarter is
conclusion of FY 2012 were:
located in Washington, D.C., with three regional
offices, sixteen district offices, and nine resident
• Chairman Julius Genachowski
agent offices throughout the nation.
• Commissioner Robert M. McDowell
• Commissioner Mignon Clyburn
Five commissioners direct the work of the FCC. All
• Commissioner Jessica Rosenworcel
are appointed by the President and confirmed by
• Commissioner Ajit Pai
the Senate for 5-year terms, except when filling the
Pictured from left to right are Commissioner Rosenworcel, Commissioner McDowell, Chairman Genachowski, Commissioner Clyburn, and
Commissioner Pai.
6 | Summary of Performance & Financial Information FY 2012
Mission
As specified in the Communications Act, the Commission’s mission is to “makeavailable, 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, Nation-wide, and world-wide 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.
fcc.gov | 7
Organizational Structure
The FCC Chairman leads the Commission as head of the agency. In order toaccomplish 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 Media Bureau
recommends, develops, anddevelops and implements the FCC’s consumer policies,
administers the policy and licensing programs relating
including disability access and policies affecting
to electronic media, including radio and broadcast,
Tribal nations. The Bureau serves as the public face
cable, and satellite television in the United States and
of the Commission through outreach and education,
its territories.
as well as through the Consumer Center, which is
responsible for responding to consumer inquiries and
The Public Safety and Homeland Security Bureau
complaints. The Bureau also maintains collaborativesupports initiatives that strengthen public safety and
partnerships with state, local, and Tribal governments
emergency response capabilities to better enable the
in such critical areas as emergency preparedness and
FCC to assist the public, law enforcement, hospitals,
implementation of new technologies.
the communications industry, and all levels of
government in the event of a natural disaster,
The Enforcement Bureau
enforces FCC rulespandemic, or terrorist attack.
and the Communications Act. The Bureau protects
consumers, ensures efficient use of spectrum,
The Wireless Telecommunications Bureau
isfurthers public safety, and promotes competition.
responsible for wireless telecommunications programs
and policies in the United States and its territories,
The International Bureau
administers the FCC’sincluding licensing of wireless communications
international telecommunications and satellite programs
providers. Wireless communications services include
and policies, including licensing and regulatory functions.
cellular, paging, personal communications, and other
The Bureau promotes pro-competitive policies abroad,
radio services used by businesses and private citizens.
coordinating the Commission’s global spectrum activities
The Bureau also conducts auctions of licenses for
and advocating U.S. interests in international
the communications spectrum.
communications and competition. The Bureau works
to promote a high-quality, reliable, globally interconnected,
and interoperable communications infrastructure.
8 | Summary of Performance & Financial Information FY 2012
The Wireline Competition Bureau
develops andThe Office of Engineering and Technology
advisesrecommends policy goals, objectives, programs,
the Commission on technical and engineering matters.
and plans concerning wireline telecommunications
This Office develops and administers FCC decisions
(e.g., telephone landlines, and fixed—as opposed
regarding spectrum allocations and grants equipment
to mobile—broadband), striving to ensure choice,
authorizations and experimental licenses.
opportunity, and fairness in promoting the
development and widespread availability of such
The Office of the General Counsel
serves as thecommunications services. The Bureau has particular
Commission’s chief legal advisor.
responsibility for the Universal Service Fund, a public-
private partnership that helps connect all Americans
The Office of the Inspector General
conducts andto communications networks.
supervises audits and investigations relating to FCC
programs and operations.
The Offices
The Office of Legislative Affairs
serves as theThe Office of Administrative Law Judges
isliaison between the FCC and Congress, as well as
composed of judges who preside over hearings
other Federal agencies.
and issue decisions on matters referred to them
by the Commission.
The Office of the Managing Director
administersand manages the FCC.
The Office of Communications Business
Opportunities
The Office of Media Relations
informs the mediain the provision and ownership of telecommunications
of FCC decisions and serves as the FCC’s main point
services by supporting opportunities for small
of contact with the media.
businesses as well as women and minority-owned
communications businesses.
The Office of Strategic Planning and Policy
Analysis
Bureaus, and Offices in strategic planning and
policy development for the agency. It also provides
research, advice, and analysis of complex, novel,
and non-traditional economic and technological
communications issues.
The Office of Workplace Diversity
ensures thatthe FCC provides employment opportunities for all
persons regardless of race, color, sex, national origin,
religion, age, disability, or sexual preference.
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 FY 2012 is included
on the next page.
fcc.gov | 9
Organizational Chart
Commissioners
Julius Genachowski, Chairman
Robert M. McDowell Mignon Clyburn Jessica Rosenworcel Ajit PaiOffice 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 AnalysisBusiness
Diversity
Affairs
Opportunities
Consumer &
Wireless
Governmental
Telecommunications
Media
Enforcement
Affairs Bureau
Bureau
Bureau
Bureau
Admin. & Mgmt. OfficeManagement & 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. OfficeAdmin. & 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
10 | Summary of Performance & Financial Information FY 2012
FCC Field Offices
The Commission has multiple regional and field officesand 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
resident agents are responsible for carrying out on-
of the Office of Engineering and Technology can
scene investigations, inspections, audits, and other
test, 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 | 11
Strategic Goals and Objectives
The Commission has identified six long-term strategic goals that guide theactions and performance of the FCC.
Accomplishment of agency goals is measured by
Please note that the goals shown below were the
the progress and completion of annual performance
strategic goals as reflected in the FCC’s FY 2012
goals during the fiscal year. External influences,
Annual Performance Plan, issued in February 2011
including economic, legal, and organizational
as part of the FCC’s FY 2012 budget submission
factors beyond the Commission’s programs and
to Congress. The Commission issued a new FCC
efforts, may influence whether we fully meet every
Strategic Plan in February 2012 with revised goals
performance goal. Further details on our strategic
for the period FY 2012 through FY 2016. The FCC
goals during FY 2012, as well as the strategies
will report on its performance toward the new
and resources used to achieve these goals, can
strategic goals in future documents. The new
be found in the Commissions’s strategic plan at:
Strategic Plan is publicly available at the same
http://www.fcc.gov/encyclopedia/fcc-strategic-plan.
website to the left.
Strategic Goal
Objective
Broadband
Broadband is the major communications infrastructure priority of our time. Through our policies,
rulemaking activities, citizen outreach, and education initiatives, we will seek to ensure that all
Americans have access to reliable and affordable high-speed broadband capability.
Consumers
Among the Commission’s most important responsibilities is protecting and empowering consumers.
Regulatory policies must take account of consumer interests; consumer protection and empowerment
policies must apply consistently and reasonably across technologies; and information provided to
consumers must be timely, accurate, and available on a variety of platforms.
Competition and
Competition in the provision of communications services, both domestically and overseas, supports the
Innovation
nation’s economy. The FCC should promote a healthy competitive dynamic for communications services
that fosters research and innovation, and presents consumers with choices for reliable, meaningful
and affordable services.
Continual
The FCC is striving to become a model for excellence in government. We are committed to transparent
Improvement
and participatory processes that encourage public involvement and feedback, will be data driven in our
decision making, and will maintain an organizational culture that promotes innovation and accountability.
Public Safety and
Communications during emergencies and crises are essential lifelines for public safety, health, defense,
Homeland Security
and emergency personnel, as well as all consumers in need. The nation’s critical communications
infrastructure must be reliable, interoperable, redundant, supportive of all needed services, and
rapidly restorable.
International
We are committed to greater international engagement and cooperation in an interconnected world.
The FCC will promote sound telecommunications policies globally and will strongly represent U.S.
interests internationally.
12 | Summary of Performance & Financial Information FY 2012
Performance Highlights for FY 2012
During the previous fiscal year, the Commission made significant progress towardaccomplishing its performance goals. Greater detail on these accomplishments
is available in the FCC Annual Performance Report (APR) for FY 2012 on the
Commission’s website at http://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 | 13
Broadband
our policies, rulemaking activities, citizen outreach, and education initiatives,
we will seek to ensure that all Americans have access to reliable and affordable
high-speed fixed and mobile broadband capability.
Address recommendations in the National Broadband
Take steps within the Commission’s authority to help
Plan to broaden the deployment and adoption of
promote the nation’s broadband infrastructure and
broadband technologies for all Americans
advance national purposes. These include job creation,
public safety, consumer benefits, education, energy
The National Broadband Plan introduced the idea of
efficiency, and availability of health services.
incentive auctions as a tool to meet the nation’s need
for spectrum that could be allocated for mobile
During FY 2012, the FCC’s 20 Learning On-the-Go
broadband use. In February 2012, Congress authorized
Pilot projects were exploring how best to enable
the Commission to conduct incentive auctions as a
schools and libraries to deliver Internet connectivity
means to repurpose broadcast television spectrum.
and digital learning over mobile wireless devices
In September, 2012, the Commission launched
outside of the school or library. The Learning On-the-
incentive auctions, seeking public comment on
Go Pilot program is helping the FCC learn how best to
specific proposals for implementing its authority.
support wireless connectivity services for mobile
learning devices, like digital textbooks, so that students
In 2011, the Measuring Broadband America (MBA)
and patrons can connect with online resources even
program delivered the first robust, statistically valid,
when they’re not in school or at a library.
nationwide analysis of residential broadband
performance. The initial report provided a comparison
In February 2012, Chairman Genachowski joined
of broadband service performance by internet service
Secretary of Education Duncan at the first-ever Digital
provider, in effect a scorecard of each major ISP’s
Learning Day Town Hall in Washington, D.C. With
performance against its peers. With the second
input from that event, the FCC and the Department of
MBA report issued in July 2012, significant industry
Education updated the School 2.0 bandwidth planner
gains were found in promised vs. delivered speeds,
to help schools plan for their connectivity needs. This
bandwidth, and overall service quality.
collaboration resulted in concrete steps to move the
nation to digital textbooks, including a model digital
The Commission also launched Measuring Mobile
textbooks challenge, a blueprint template for states
America, the first nationwide mobile broadband
to implement the transition, and the release of FCC
performance measurement program. As mobile
guidance to make it easier for school districts and
broadband has become part of our everyday
libraries to make the transition.
communications infrastructure, it remains difficult for
consumers to get detailed information about their
The FCC re-launched the Small Biz Cyber Planner
mobile broadband performance. Building on the
2.0, an online resource to help small businesses
model for the FCC’s ongoing Measuring Broadband
created customized cybersecruity plans. Originally
America program, the FCC is working with wireless
launched in 2011, it is the result of an unprecedented
carriers, the public interest and research community,
public-private partnership between government
and other stakeholders to deliver consumers detailed
experts and private IT and security companies.
information about mobile broadband performance.
14 | Summary of Performance & Financial Information FY 2012
In November 2011, the FCC approved an order to
The Commission adopted revised rules to enable
unlock additional spectrum for Medical Micropower
Wireless Communications Service licensees to use
Networks (MMNs). MMNs will dramatically improve
30 megahertz of underutilized spectrum in the 2.3
the lives of the millions of Americans who suffer from
GHz band for wireless broadband services, while
spinal cord injuries, traumatic brain injuries, strokes,
protecting the adjacent Satellite Digital Audio Radio
and various neuromusculoskeletal disorders. MMNs
Service operator, Sirius XM Radio Inc. against harmful
are comprised of implanted devices that stimulate
interference. This action continues the FCC’s efforts
nerves and muscles and hold the promise of safer,
to remove the regulatory barriers that are limiting the
less invasive, and more efficient treatment options
flexible use of spectrum for broadband services.
than those currently available.
The FCC took steps to increase the nation’s supply
An Order was adopted that allocated spectrum
of spectrum for mobile broadband by removing
and adopted service rules for Medical Body Area
unnecessary barriers to flexible use of 40 megahertz
Networks (MBAN). MBAN technology will provide
of spectrum in the 2 GHz band. This proposal would
a flexible platform for the wireless networking of
carry out a recommendation in the National
multiple body transmitters. This platform will enhance
Broadband Plan that the Commission enable the
patient safety, care and comfort by reducing the need
provision of stand-alone terrestrial services in this
to physically connect sensors to essential monitoring
spectrum.
equipment by cables and wires.
A Notice of Proposed Rulemaking (NPRM) was
The FCC released a staff report evaluating the
released, initiating a fresh look at the Commission’s
Commission’s Rural Health Care Pilot Program
mobile spectrum holding policies given the changes
demonstrated that broadband health care networks
in technology, spectrum availability, and the mobile
improve the quality and reduce the cost of delivering
marketplace since the last comprehensive review of
care in rural areas. This report details the benefits as
these rules more than a decade ago. With this NPRM,
well as the lessons learned from the pilot program,
the FCC seeks comment on ensuring that its policies
which supports 50 active projects in 38 states.
provide the certainty and predictability needed to make
informed investment decisions, including participation
In June 2012, the FCC’s Enforcement Bureau
in upcoming incentive auctions and secondary market
negotiated an unprecedented extension of a merger
transactions, while also promoting the competition
condition critical to widespread broadband access,
needed to sustain a healthy wireless marketplace.
ensuring that a reasonably priced broadband Internet
option would be available in Comcast’s service areas.
Encourage and facilitate an environment that
Comcast also was required to make an $800,000
stimulates investment and innovation in broadband
contribution to the U.S. Treasury for violating the
technologies and services
Commission’s merger order.
The FCC adopted measures promoting further
In addition, FY 2012 marked a first-of-its-kind
deployment of mobile broadband service, continuing
enforcement action involving the pro-consumer
its reform of rules governing use of microwave
open access obligations of the 700 MHz “C Block”
frequencies for wireless backhaul as part of the FCC’s
rules ($1.25 million settlement with Verizon Wireless),
Broadband Acceleration Initiative and its regulatory
restoring the benefits of an open wireless broadband
reform agenda. Building on recommendations in the
platform to Verizon Wireless subscribers by al owing
FCC’s National Broadband Plan, these actions will
them to freely use the devices and applications of
speed the rollout of fourth-generation (4G) broadband
their choosing.
networks, accelerate the role of expanded wireless
broadband communications in national economic
Ensure harmonized regulatory treatment of
revitalization and job creation, and bring new
competing broadband services, to the extent
broadband services to rural areas.
consistent with the underlying technologies.
fcc.gov | 15
Consumers
empowering consumers. Regulatory policies must take account of consumer
interests; consumer protection and empowerment policies must apply
consistently and reasonably across technologies; and information provided to
consumers must be timely, accurate, and available on a variety of platforms.
Promote pro-consumer policies
broadcasters, cable operators, and other
multichannel video programming distributors.
The FCC took steps to protect Americans from difficult-
to-detect fraudulent charges on their landline phone
CTIA-The Wireless Association agreed to amend
bills. New rules combat “cramming,” the illegal
its Consumer Code for Wireless Service to require
placement of unauthorized charges on a consumer’s
participating member wireless service providers to
monthly phone bill. Specifically, the FCC: 1) required
send alerts to their subscribers when they approach
telephone companies to notify subscribers at the
and when they exceed plan allowances for voice,
point of sale, on each bill, and on their websites of
data and messaging, and are about to incur overage
the option to block third-party charges from their
charges. Alerts are also required when subscribers
landline telephone bills if the carrier offers that option;
are traveling overseas and are about to incur
2) strengthened the Commission’s requirement that
international roaming charges. The revised CTIA
third-party charges be separated from the landline
Code also requires participating carriers to “clearly
telephone company’s charges on phone bills; and
and conspicuously disclose tools or services that
3) asked whether the Commission should adopt
enable consumers to track, monitor and/or set limits
additional protections, such as requiring landline
on voice, messaging, and data usage.”
telephone companies to get consumer consent
before placing those charges on their telephone bills.
To further protect consumers from unwanted autodialed
or prerecorded calls, often referred to as “robocalls,”
In May 2012, the Commission initiated a proceeding
the Commission approved changes to its telemarketing
to create a Do-Not-Call registry for public safety
rules. Unwanted telemarketing calls and texts were
answering points (PSAPs) as required by Congress
consistently in the top three consumer complaints
in the “Middle Class Tax Relief and Job Creation
to the FCC. The Order helps put an end to these
Act of 2012.” Specifically, the Commission sought
intrusions by empowering consumers with increased
comment on a number of issues relevant to this Act,
rights under the FCC’s telemarketing rules. Specifically,
which requires the Commission to establish a registry
the rules protect consumers by: (1) requiring
that allows PSAPs to register telephone numbers on
telemarketers to obtain prior written consent before
a Do-Not-Call list and prohibits the use of automatic
placing a robocall to a consumer; (2) eliminating the
dialing or “robocall” equipment to contact those
“established business relationship” exemption to the
numbers. The Commission adopted the proposed
requirement that telemarketing robocalls to residential
rules on October 17, 2012.
wireline phones occur only with prior express consent
from the consumer; (3) requiring telemarketers
Loud commercials on television are a source of many
to provide an automated, interactive “opt-out”
consumer complaints. The Commercial Advertisement
mechanism during each robocall so that consumers
Loudness Mitigation Act was adopted, in which the
can immediately tell the telemarketer to stop calling;
Commission chose a technical solution to excessive
and, (4) strictly limiting the number of abandoned or
volume that does not impose significant costs to TV
“dead air” calls that telemarketers can make within
each calling campaign.
16 | Summary of Performance & Financial Information FY 2012
To strengthen and expand communications services
The Commission also took action to protect the integrity
to Native Nations and their communities, proposals
of the Universal Service Fund (USF) and other funds,
were adopted by the Commission to expand the
recouping $3 million for the USF in addition to issuing
priority provided to Tribes and Tribal entities seeking
another $3 million in penalties against various companies
to establish new commercial FM services. These
that failed to comply with the filing and payment
efforts enhanced the ability of federally recognized
obligations. These pro-competitive actions also ensured
Native American Tribes and Alaska Native Villages not
that compliant companies do not bear the burden of
only to receive radio service tailored to their specific
subsidizing those who do not pay their fair share.
needs and cultures, but to increase the ownership of
such radio stations by Tribes and Tribal-owned entities.
Enforce the Commission’s rules for the benefit of
consumers
Work to inform American consumers about
their rights and responsibilities in the competitive
To protect consumers, the FCC’s Enforcement Bureau
communications marketplace
actively pursued numerous investigations to enforce
the requirements of the Communications Act, including:
The Commission adopted rules to ensure advanced
communications services and equipment are
• Proposing $10 million in penalties against
accessible to and usable by individuals with disabilities
companies for deceptively marketing prepaid
by implementing Sections 716 and 717 of the
calling cards to largely immigrant communities.
Communications Act, as enacted by the Twenty-First
• An investigation of Verizon for apparent violations
Century Communications and Video Accessibility
of telephone numbering requirements. The carrier
Act of 2010 (CVAA). Rules were also proposed to
settled the investigation by consent decree, which
implement Section 718 of the Act, which requires
required Verizon to make a $970,000 voluntary
Internet browsers built into mobile phones to be
contribution to the U.S. Treasury and to implement
accessible to and usable by individuals who are blind
comprehensive compliance measures designed to
or have a visual impairment.
ensure future compliance with the rules.
• Adopting a $1.1 million notice of apparent liability
In addition, rules were also adopted for closed
for forfeiture against a carrier for multiple slamming
captioning requirements of video programming
violations to help protect consumers from
delivered using Internet protocol, which is part of
unauthorized changes to their selected carrier.
the implementation of the CVAA. IP-delivered video
• Taking aggressive enforcement action against a
programming is delivered by different devices,
prolific “robocall” company, proposing a $2.96
including personal computers, tablets, cell phones,
million forfeiture penalty.
game consoles, Blu-ray players, or set-top boxes.
• Successfully halting mystery data charges by AT&T
These new rules enable individuals with disabilities to
through negotiation of a $700,000 consent decree.
fully utilize communications services and equipment
• Ensuring access to advanced telecommunications
and allow them better access to video programming.
services by people with hearing disabilities through
aggressive enforcement of hearing aid compatibility
Ensure that consumer protection and empowerment
rules. This resulted in more than $2 million in
policies apply consistently and reasonably across
negotiated consent decrees and notices of
technologies
apparent liability.
fcc.gov | 17
Competition and Innovation
overseas, supports the Nation’s economy. The Commission should promote a
healthy competitive dynamic for communications services that fosters research
and innovation and presents consumers with reliable, meaningful choice in
affordable services.
Develop media rules and policies that achieve
The Commission invited comment on whether to allow
statutory policy objectives in light of significant
public broadcasters to spend a modest amount of their
changes to traditional media services
total annual broadcast time – up to one percent, or
about 88 hours per year – to conduct on-air fundraising
The FCC took its first step toward making a significant
activities for charities and other nonprofits. The proposal
portion of broadcast television spectrum available for
gives viewers of public broadcasting the opportunity
new uses. The Commission adopted rules, in
to raise funds for non-profit organizations in their
anticipation of a future incentive auction to address
communities and around the world.
the nation’s growing demand for wireless broadband,
allowing multiple broadcast stations to elect to stream
Promote access to advanced telecommunications
individual programming while sharing a single channel.
and information services for all Americans
The new rules promote innovation and investment in
mobile communications, and help ensure the United
The new Connect America Fund (CAF) was launched
States keeps pace with the global wireless revolution.
as part of once-in-a-generation reform of the Universal
The rules also help preserve broadcast television as a
Service Fund (USF). The Commission unanimously
healthy, viable medium.
voted to reform and modernize USF to help connect
every American to high-speed Internet by the end
Local community radio was boosted by facilitating the
of the decade, just as USF did for telephone service
licensing of low power FM and FM translator stations.
in the 20th century. These reforms cut waste and
The Commission adopted rules to implement the Local
imposed strict fiscal responsibility standards on the
Community Radio Act as well as a new market-specific
Fund, preventing it from growing beyond its current
FM translator application processing approach. To
size. Nearly 400,000 residents and small business
assist prospective LPFM applicants in identifying
owners in 37 states will gain access to high-speed
available FM channels, a public LPFM Channel Finder
Internet within three years as a result of the first
search tool was available on the FCC’s website.
phase of the CAF.
A Notice of Proposed Rulemaking was adopted to
Competitive bidding procedures were announced for
modernize and reform cable television technical rules,
Phase I of the Mobility Fund, the first-ever reverse
facilitating the cable industry’s widespread transition
auction for Universal Service support. This will
from analog to digital transmission systems. The
accelerate delivery of advanced mobile services to
proposed rules reflect the Commission’s ongoing
tens of thousands of road miles that currently lack 3G
commitment to regulatory reform and will permit the
or 4G service. Winning bidders must deploy either
industry to utilize existing spectrum more efficiently,
3G service within two years or 4G service within three
while ensuring good quality signals for digital cable
years of the award. The Mobility Fund will award up
customers and protecting against digital signal leakage.
to $300 million that was reserved out of savings from
the USF reforms. The auction is a market-based,
fiscally responsible policy innovation to generate the
greatest impact for every universal service dollar.
18 | Summary of Performance & Financial Information FY 2012
The FCC completely overhauled and reformed its
frequencies in the TV bands. This unused TV spectrum
Lifeline program for today’s communications
provides a major new platform for innovation and
marketplace. These reforms included eliminating
delivery of service, with potential for both research
unnecessary subsidies, cutting off duplicative
and commercial applications.
subscriptions, and requiring better proof of eligibility.
Lifeline has connected low-income Americans to jobs
Enforce compliance with media rules
and opportunities, as well as family, and emergency
services, by helping make phone service affordable.
The FCC shut down hundreds of pirate broadcast
However, waste, fraud and abuse in the program
operations, which threaten the integrity of the nation’s
were threatening its future. This year alone, we have
communications infrastructure and caused interference
exceeded our $200 million savings target this year
to licensed broadcasters, air traffic control frequencies,
alone, savings being used in part to connect low-
and other public safety communications. There were
income Americans to broadband.
$289,000 in penalties assessed and 583 warnings
issued during FY 2012.
Ensure that American consumers can choose among
multiple reliable and affordable communications services
The Commission continued to review consumer
complaints alleging violations of its CableCARD
Review of the Verizon Wireless-SpectrumCo
rules. These rules allow consumers to access cable
transaction was concluded, and four significant
programming using a digital cable-ready television
spectrum transfer applications were approved,
set or a retail set-top box instead of renting a set-top
subject to a number of binding commitments and
box from a cable operator.
conditions. The companies’ commercial agreements
were substantially modified to preserve incentives
Enforce the Commission’s spectrum regulations
to compete and invest in broadband networks.
and policies
Verizon Wireless also undertook an unprecedented
divestiture of spectrum to a competitor, T-Mobile.
The Commission responded aggressively to the
The Order includes enforceable commitments from
proliferation of signal jamming devices in the
Verizon Wireless to accelerate buildout of its newly
marketplace, addressing harmful interference and
acquired spectrum, as well as to offer data roaming
educating the public about the safety implications.
on commercially reasonable terms and conditions.
The Enforcement Bureau issued 20 enforcement
actions against online retailers in 12 states for illegally
Steps to promote efficiency and eliminate burdensome
marketing more than 200 models of cell phone
regulatory processes were taken by providing licensees
jammers, GPS jammers, Wi-Fi jammers, and similar
with greater flexibility to provide advanced
signal jamming devices. These devices pose serious
communications in currently unlicensed 800 MHz
risks to critical public safety communications and
cellular service areas. Consistent with its regulatory
can prevent individuals from making 9-1-1 and other
reform agenda, the FCC issued a Notice of Proposed
emergency calls.
Rulemaking and adopted an Order proposing to
revise the licensing model for cellular service from a
The FCC successfully addressed widespread
site-based to a geographically-based approach.
interference to Federal Aviation Administration weather
radar systems, levying $96,000 in penalties. These
Unused spectrum between TV stations, known as
FAA systems make critical quantitative measurements
“white spaces,” represents a valuable opportunity for
of gust fronts, wind shear, and other weather hazards.
provision of broadband data services. The FCC’s
Office of Engineering and Technology (OET) approved
Spectrum Bridge Inc.’s television white spaces
database system. OET also approved a device by
Koos Technical Services, Inc. as the first product
allowed to operate on an unlicensed basis on unused
fcc.gov | 19
Continual Improvement
be data- driven in our decision making and are committed to transparent and
participatory processes that encourage public involvement and feedback. We will
maintain an organizational culture that promotes innovation and accountability.
Be data-driven in our policy- and decision-making
with passwords; (3) educating users on lock/locate/
wipe applications; (4) conducting a public education
The nation has made significant progress expanding
campaign on how to protect your smartphone and
high-speed Internet access in recent years, according
yourself; and (5) tracking progress benchmarks and
to the FCC’s Eighth Broadband Progress Report,
continuing an ongoing dialogue.
available at http://www.fcc.gov/reports/eighth-
broadband-progress-report. Notwithstanding this
The FCC launched a new ‘bill shock’ website
progress, the report finds that approximately 19 million
(http://www.fcc.gov/bill-shock-alerts), an online tool
Americans, six percent of the population, still lack
to help consumers track implementation of recent
access to fixed broadband service at sufficient
commitments by wireless carriers to provide usage
threshold speeds. In rural areas nearly one-fourth of the
alerts before and after consumers exceed their
population, 14.5 million people, lack access to such
plan limits. Bill shock is a sudden and unexpected
service. In tribal areas, nearly one-third of the
increase in monthly wireless bills that happens when
population lack access. The report concludes that
consumers’ unknowingly exceeding plan limits for
until the FCC’s Connect America Fund reforms are fully
voice, data and text, or get hit with unexpected
implemented, these gaps are unlikely to close, and
international roaming charges.
broadband is not yet being deployed in a reasonable
and timely fashion.
Foster public participation in reform and rule making
The FCC’s Media Bureau reported on the status of
The way television broadcasters inform the public
competition in the market for the delivery of video
about how they are serving their communities was
programming. The 14th Video Competition Report
modernized by creating an online public inspection
noted that the significant recent developments in the
website (https://stations.fcc.gov), and requiring all
provision of video to consumers were the increased
full-power television broadcasters to upload public
deployment of digital technology, consumers’
inspection documents to the site. Broadcasters
increasing demands for access to video programming
affiliated with the top four national TV networks in
anywhere and anytime, and the evolution of online
the top 50 television markets also were required to
video from a niche service into a thriving industry.
upload their political files to the website.
Ensure effective and modern communications with
The FCC worked to improve regulatory processes
consumers, Congress, the communications industry,
consistent with President Obama’s Executive Orders,
and fellow federal, state, tribal, and local agencies
including integration of more rigorous cost-benefit
analysis into rulemaking proceedings; reduction of
The FCC Chairman joined federal, state and local
agency backlogs; and retrospective analysis and
officials, as well as representatives of wireless carriers,
elimination of regulations that were overly burdensome,
to announce new initiatives to combat massive
out of date, or otherwise impeded economic growth
smartphone and data theft. Initiatives include: (1)
and development. From January 1, 2010, through
implementing a database to prevent the use of stolen
the end of FY 2012, the FCC eliminated over 260
smartphones; (2) encouraging users to lock their phones
outdated rules and regulations.
20 | Summary of Performance & Financial Information FY 2012
Create and sustain an organizational culture that
industry. Small, minority and women business owners
encourages diversity, innovation, accountability, and
interested in telecommunications, broadcasting, or
continual improvement
related businesses, heard presentations by finance
experts. These experts discussed challenges and
The FCC’s Office of Communications Business
strategies for obtaining public- or private-sector
Opportunities hosted a Capitalization Strategies
financing for entrepreneurs, and covered strategies
Workshop focused on capital acquisition for small
for services that provide support to businesses in the
and diverse businesses in the communications
communications industry.
fcc.gov | 21
Public Safety and Homeland Security
safety, health, defense, and emergency personnel, as well as all consumers
in need. The Nation’s critical communications infrastructure must be reliable,
interoperable, redundant, supportive of all needed services, and rapidly restorable.
Promote the reliability, security, rapid restoration, and
public safety implications. Interference can come
survivability of the communications infrastructure
from a wide array of sources, from cell jammers and
baby monitors to equipment on docked ships or
On June 28, 2012, the FCC’s Disaster Information
other intentional or malicious sources.
Reporting System (DIRS) began accepting disaster
outage information on interconnected Voice over
Facilitate deployment of public safety technology
Internet Protocol (VoIP) and broadband Internet
services. DIRS is a voluntary, web-based system
The Commission proposed rules and asked for
administered by the FCC’s Public Safety and Homeland
comment on a number of issues involved in improving
Security Bureau that communications providers can
spectrum efficiency and encouraging greater use
use to report communications infrastructure status
of the 4.9 GHz band for public safety broadband
and situational awareness information during times of
communications. Improved use of the 4.9 GHz band
crisis. Information submitted in DIRS provides the FCC
will facilitate wireless local area networks for incident
with an important level of awareness regarding the
scene management, fixed point-to-point surveillance,
status of communications during and immediately
and support for dispatch operations and vehicular or
after a disaster. Expanding DIRS to interconnected
personal communications. Using 4.9 GHz spectrum,
VoIP and broadband Internet services recognizes that
public safety users can set up temporary networks
consumers, businesses, and government agencies
that support data, voice, and video communications
increasingly rely on these services for everyday and
at scenes of emergencies; monitor sensitive locations
emergency communications needs, including 9-1-1.
remotely with point-to-point video links; and set up
city-wide Wi-Fi networks to give first responders
The Commission adopted a Notice of Inquiry to
dedicated broadband access.
explore the use of Deployable Aerial Communications
Architecture (DACA) technologies. DACA technologies
The Wireless Priority Service (WPS) is a program that
are aerial technologies such as unmanned aerial
authorizes cellular communications service providers
vehicles, weather balloons or existing aircraft that
to prioritize calls over wireless networks. Participation
could provide emergency communications during or
in the WPS program is voluntary. The WPS program
immediately after a major disaster when terrestrial
facilitates the deployment of public safety technology
communications infrastructures may be disrupted.
and increases the chances that critical users, such as
first responders, will be able to use cell phone services
On November 9, 2011, the FCC and the Federal
in an emergency. The FCC sets the rules and policies
Emergency Management Agency conducted the
for the WPS program, while the Department of
first-ever nationwide test of the Emergency Alert
Homeland Security (DHS) manages the WPS program.
System (EAS). The purpose of the test was to assess
In 2008, the FCC began an outreach program to
the reliability and effectiveness of the EAS as a way to
increase participation in WPS. Since that time,
alert the public of national emergencies.
WPS participation increased more than 150%. The
program experienced a 6% increase in participation
The FCC’s Enforcement Bureau addressed more
during FY 2012.
than 1,000 interference cases, 823 of which had
22 | Summary of Performance & Financial Information FY 2012
The Commission established the
Telecommunications Service Priority
(TSP) program to support priority
restoration of communications services
that support national security and
emergency preparedness missions during
disasters, including terrorist attacks. DHS
oversees day-to-day operation of the
TSP program. The TSP program directs
telecommunications service providers (e.g.,
wireline and wireless phone companies) to
give preferential treatment to users enrolled
in the program when they need to add new
lines or have their lines restored following
a disruption of service. Any federal, state,
or local government entity that relies on
telecommunications services to accomplish
its national security and/or emergency
planning mission can qualify for TSP. In
2004, the Commission began an outreach
program to inform 911 administrators of
the TSP program and to expedite their
enrollment. The Commission has also
sought to increase the TSP participation
of the federal government, hospitals, and
state and local governments. Participation
by all of these telecommunications users
increased four-fold since 2004. The
program experienced an 8% increase in
participation during FY 2012.
Maintain a clearinghouse of information
for the public safety community
The FCC released the Small Biz Cyber
Planner, a new easy-to-use online tool
to help small businesses customize their
own cybersecurity plans. The online tool
is available at www.fcc.gov/cyberplanner.
The Small Biz Cyber Planner enables any
small business to create a customized
guide tailored to its cybersecurity needs by
answering a few basic questions. By using
this tool and implementing the planning
guide, businesses can protect themselves,
their information, and their customers from
cyber threats.
fcc.gov | 23
International
interconnected world. The FCC will promote sound telecommunications policies
globally and will strongly represent U.S. interests internationally.
Be a world-leader by promoting sound
65 draft proposals that were placed on Public Notice
policy worldwide
for comment. FCC staff worked extensively within
the interagency preparatory process to develop U.S.
The FCC actively participated in preparatory activities
positions for WRC-12 that, to the maximum extent
for the World Conference on International
possible, reflected private sector priorities.
Telecommunications (WCIT). The International
Telecommunications Regulations were last negotiated
FCC Chairman Julius Genachowski participated
in 1988, and there was broad consensus that they
in high-level discussions with U.S. and Mexican
needed to be updated to reflect the dramatically
telecommunications officials at the State Department,
different information and communication technology
where the U.S. signed two protocols with Mexico
landscape of the 21st century. During FY 2012,
for sharing spectrum in the 800 MHz and 1.9 GHz
the FCC’s International Bureau worked with its
bands along the U.S.-Mexican border. These actions
counterparts at the State Department, National
will help support commercial broadband services and
Telecommunications and Information Administration,
public safety mission-critical voice communications
Department of Defense and other agencies
along the border and throughout the United States.
to develop a unified position on international
telecommunications services and Internet policy.
Promote pro-competitive and universal access
Additionally, senior FCC staff participated in a host
policies worldwide
of bilateral discussions, participated in various
ITU meetings, and led discussions with foreign
For the first time since 1996, the FCC initiated a
counterparts in order to effectively advocate for U.S.
wholesale review of its Part 25 rules, governing
positions on open Internet and other issues, and to
licensing and operation of space stations and earth
place the U.S. in the strongest position possible in
stations which transmit radio frequency signals
advance of the WCIT.
between the ground and satellites. This Notice of
Proposed Rulemaking would eliminate unnecessary
Advocate U.S. spectrum interests in the
technical and information filing requirements, update
international arena
rules to better accommodate evolving technology,
and simplify existing requirements. The Commission
The World Radiocommunications Conference (WRC) is
aims to give satellite licensees the flexibility to provide
a treaty-level forum held every three to four years to
innovative services while ensuring an operating
decide allocations of spectrum for the deployment,
environment free from harmful interference.
growth and continued usage of all types of radio
services. WRC-12 was held in Geneva, Switzerland,
In the last year, the FCC International Bureau made
from January 23 to February 17, 2012. The FCC
historic progress in reducing the number of backlogged
actively contributed to U.S. success at the
space station applications. At the end of FY 2012,
conference. The FCC team solicited public views and
the number of backlogged space station applications
recommendations on WRC-12 issues under the aegis
was at an all-time low.
of the WRC-12 Advisory Committee, which produced
24 | Summary of Performance & Financial Information FY 2012
FY 2012
Financial
Information
fcc.gov | 25How We Managed Our Funds:
Message from Our
Chief Financial Officer
I am pleased to present the Commission’s financial statements for fiscal year(FY) 2012 and to report that the Commission’s auditors issued an unqualified
opinion on each of the Commission’s financial statements for FY 2012.
Furthermore, I am proud to say that this is the seventh straight fiscal year the
Commission has received an unqualified opinion. The Commission is proud of
the work of its staff to obtain and maintain an unqualified opinion.
26 | Summary of Performance & Financial Information FY 2012
During FY 2012, the Commission launched a new Office of Management and Budget Circular No. A-123
internal controls process that distributes responsibility down to each Bureau and Office. This new process
enables Commission managers to be more involved in and responsible for the internal controls established
throughout the Commission, and requires the Bureau and Office chiefs to provide attestations to the
Managing Director and the Chairman.
Throughout FY 2012, 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 2011
audit report. The Commission closed findings relating to its information technology control deficiencies and
made progress in resolving findings related to its financial management systems; however, there is still work
to be done. In addition, the Commission successfully launched a new mechanized Acquisitions process that
is incorporated into its core financial system. The new Acquisitions process will assist the Commission by
providing more timely procurements and better tracking of obligations.
Significantly, for FY 2012 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 2012 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 2013 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.
Mark Stephens
Chief Financial Officer
February 15, 2013
fcc.gov | 27
Key FY 2012 Financial Management
Accomplishments
AreaAccomplishment
The FCC streamlined a number of its processes to strengthen efficiency,
effectiveness and internal control practices.
During FY 2012, the Commission re-engineered business processes allowing
Process Improvements
component entities to transfer delinquent debt directly to the Department of
Treasury. Prior to this change, component entities sent delinquent debt to the
FCC for additional collection efforts and, if necessary, transfer to the Treasury.
In addition, the Commission implemented a paperless electronic routing
system for all travel requests, approvals and reimbursements.
The FCC continues to increase efficiencies and effectiveness using the
Financial Systems Modernization
core financial system implemented in FY 2011. The Commission worked
collaboratively with a “tiger team” to resolve high priority post implementation
issues to fully leverage system functionality.
The FCC’s ongoing partnership with the Small Business Administration led to
increased contract awards to both small and small disadvantaged businesses.
The Commission successfully re-competed and leveraged all major IT contracts
Procurement
resulting in cost savings across all IT services.
Additionally, the FCC established a formal Contracting Officer’s Representative
(COR) training program and published a COR manual to define roles and
responsibilities and implemented a Compliance Officer position to promote
internal controls and conformity with acquisition rules and regulations.
Converted paper-based data into electronic and machine-readable structured
formats. This availability dramatically increased the transparency of more than
$3 billion in policy spending and economic activities. Included in these activities
are data disclosures related to schools and libraries communications spending
Green Initiatives
(the E-Rate program), the Mobility Fund Map, as well as the Lower Power FM
Map. In addition to increasing transparency, the availability of this data in
electronic format significantly advances “green” initiatives and promotes
user access.
Expanded the recycling program at FCC Headquarters location.
The FCC’s FY 2012 Agency Financial Report, found at http://www.fcc.gov/encyclopedia/fcc-strategic-plan,
contains a full list of FY 2012 Financial Management Accomplishments, the full audit report from the external
auditor, and our Summary of Management Assurances, among other financial information.
28 | Summary of Performance & Financial Information FY 2012
Our Financial Results
This section contains condensed financial statement information, a description of our major balance sheetcomponents, 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 website at http://www.fcc.gov/encyclopedia/fcc-strategic-plan.
Changes in Financial Position in FY 2012 (consolidated)
Net Financial Condition
(Dollars in Thousands)
2012
2011
Intragovernmental
Fund Balance with Treasury
$361,739
$494,340
Investments
6,548,090
5,822,843
Accounts Receivable
1,574
1,097
Other
–
2,436
Total Intragovernmental
$6,911,403
$6,320,716
Cash and Other Monetary Assets
$139,322
$213,944
Accounts Receivable, net
875,088
831,072
Loans Receivable, net
335
4
General Property & Equipment, net
56,832
60,461
Other
13,024
13,053
Total Assets
$7,996,004
$7,439,250
Intragovernmental
Debt
$ –
$50,300
Other
168,897
220,249
Total Intragovernmental
$168,897
$270,549
Accounts Payable
$110,523
$92,976
Deferred Revenue
62,971
93,053
Prepaid Contributions
85,849
77,362
Accrued Liabilities for Universal Service
752,423
633,967
Other
39,578
35,804
Total Liabilities
$1,220,241
$1,203,711
Unexpended Appropriations
$4,251
$15,105
Cumulative Results of Operations
6,771,512
6,220,434
Total Net Position
$6,775,763
$6,235,539
Net Cost of Operations
$9,536,699
$8,820,764
Total Budgetary Resources
$14,297,518
$12,904,395
fcc.gov | 29
Assets
The chart below presents the total assets of the Commission as of September 30, 2012. The large Investmentsbalance of $6,548.1 million results from carryover in the USF Schools and Libraries and Rural Healthcare programs
that has grown since the programs’ inception as a result of annual contributions that have exceeded annual
distributions. The Accounts Receivable balance of $875.1 million is primarily composed of USF receivables
totaling $791.9 million.
Other Assets
13,024
Intragovernmental Investments
6,548,090
Accounts Receivable, net
875,088
Remaining Intragovernmental Assets
363,313
2012 Total Assets b
Cash and Other Monetary Assets
y Categor
139,322
Loans Receivable, net
335
y (Dollars in Thousands)
General PP&E
56,832
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
82%
$6,548,090
Accounts Receivable, net
11%
$875,088
Remaining Intragovernmental Assets
5%
$363,313
Cash and Other Monetary Assets
2%
$139,322
General PP&E
<1%
$56,832
Other Assets
<1%
$13,024
Loans Receivable, net
<1%
$335
Total Assets
$7,996,004
30 | Summary of Performance & Financial Information FY 2012
Liabilities
The chart below presents the total liabilities of the Commission as of September 30, 2012. The Commission’smost significant liabilities are Accrued Liabilities for Universal Service of $752.4 million and Intragovernmental of
$168.9 million, which accounted for over 75% of total liabilities as of September 30, 2012. The Accrued Liabilities
Accounts Payable
for Universal Service repr
1
$ 10,523 0.0905747
esent the expected October (FY 2013) payments for the Telecommunications Relay
Deferred Revenue
Service Pr
62,971
$
0.0516054
ogram and the Universal Service Fund High Cost and Low Income Programs. Total Intragovernmental
Prepaid Contributions
85,849
$
0.0703541
is primarily composed of custodial collections earned on Spectrum auctions and miscellaneous receipts.
Total Intragovernmental
$ 168,897
0.1384128
Other
39,578
$
0.0324346
Accrued Liabilities for
Universal Service
$ 752,423
0.6166184
$ 1,220,241
2012 Total Liabilities by Category (Dollars in Thousands)
Accounts Payable
Deferred Revenue
Prepaid Contributions
Total Intragovernmental
Category
%
Liabilities
Other
Accrued Liabilities for Universal Service
Accrued Liabilities for Universal Service
62%
$752,423
Total Intragovernmental
14%
$168,897
Accounts Payable
9%
$110,523
Prepaid Contributions
7%
$85,849
Deferred Revenue
5%
$62,971
Other
3%
$39,578
Total Liabilities
$1,220,241
Net Position.
As of September 30, 2012, the agency’s total net position was $6,776 million, consisting ofCumulative Results of Operations of $6,772 million and Unexpended Appropriations of $4 million.
fcc.gov | 31
Costs
The chart below presents the total gross costs of each Commission program as of September 30, 2012.The costs are aligned with the six strategic goals of the Commission: Competition and Innovation, Continual
Improvement, Consumers, Broadband, Public Safety and Homeland Security, and International. Gross costs
for each goal are presented individually while revenue is presented in total rather than by goal. The program
Competition & Innovation
costs for the USF, TRS, and NANP ar
9,739,491
0.974246732
e included within the Competition and Innovation strategic goal. The
International
Commission’s subsidy costs for the Spectrum Auction Loan Pr
10,126
ogram ar
0.001012909
e included with the Competition and
Consumers
Innovation strategic goal. As a r
52,200
0.005221595
esult of the accounting for these activities, the cost for these goals may be
Broadband
48,428
0.00484428
significantly higher than the cost of the five other goals. Contributions received for the USF and TRS programs
Other
-5
-0.000000500
ar
Continual Improvement
98,582
e shown on the Statement of Changes in Net Position and do not directly of
0.009861213
fset the cost of these programs
Public Safety and Homeland Security
on the Statement of Net Cost.
48,123
0.004813771
9,996,945.00
2012 Total Gross Costs (Dollars in Thousands)
Compe&&on & Innova&on
Interna&onal
Category
Consumers
%
Broadband
Gross Costs
Competition & Innovation
Other
97%
$9,739,486
Con&nual Improvement
Continual Improvement
1%
$98,582
Public Safety and Homeland Security
Consumers
1%
$52,200
Broadband
1%
$48,428
Public Safety and Homeland Security
<1%
$48,123
International
<1%
$10,126
Total Gross Costs
$9,996,945
32 | Summary of Performance & Financial Information FY 2012
Budgetary Resources
The Commission receives most of its budgetary authority from Congressional appropriations. Budgetaryresources consist of the resources available to the Commission at the beginning of the year (carried forward),
plus appropriations, spending authority from offsetting collections, and other budgetary resources received
during the year. The Commission had $14.3 billion in budgetary resources of which $11.1 billion was obligations
incurred and $3.2 billion remained unobligated. The graph below presents the status of budgetary resources
comparatively between FY 2012 and FY 2011.
2012
2011
Obligations Incurred
$ 1
1,090,551 $ 10,139,788
Unobligated Balance
$ 3,206,967
$ 2,764,607
$ 14,297,518
$ 12,904,395
Status of Budgetary Resources – FY 2012 and 2011 (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
2012
2011
Obligations Incurred
$11,090,551
$10,139,788
Unobligated Balance
$3,206,967
$2,764,607
Total Budgetary Resources
$14,297,518
$12,904,395
fcc.gov | 33
34 | Summary of Performance & Financial Information FY 2012
Financial Management Indicators
Financial Management Indicators for FY 2012Indicator
Status
Debt Management
Eligible delinquent debt transferred to Treasury
75.6%
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 payments for vendor invoices (per Prompt Payment Act)
97.6%
Percentage of interest penalties to vendor invoices paid
0.004%
Timely payments for Centrally Billed Accounts for travel*
100%
Timely payments for employee Purchase Cards*
100%
Percentage of travel vouchers processed within 10 business days
82.6%
*The Office of Management and Budget threshold for delinquency is 61 days.
fcc.gov | 35
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