Subject: [NEXTEL-1] FCC'S - "FLY OUT FRIDAY" Comes To An End..

From: Marcelrf <[email-masked]>
Date: Thu, 26 Feb 2004 06:53:00 -0500

WASHINGTON, February 23, 2004 — The National Association of Broadcasters
is one of Washington's most influential business lobbying groups, so
it's no surprise that all five members of the Federal Communications
Commission will be attending the group's annual convention in Las Vegas
this April.

But unlike last year, the trip is being
paid for by the FCC, not the broadcasters.

FCC Chairman Michael Powell ordered
an end to the controversial practice of
accepting free travel and entertainment
from industries it regulates after near
universal condemnation of the practice
by the public and significant pressure
from a powerful member of the House
Committee on Appropriations.

For years, the FCC and its high-ranking
staff have been flown all over the world
by organizations like the NAB and the
National Cable and Telecommunications
Association to attend industry-sponsored
conventions and events and spend quality
time with top industry representatives.
Government watchdogs have
complained the practice is a clear
conflict of interest.

"I think it's a no-brainer," said author,
media activist and persistent critic of
the FCC Robert McChesney. "To me
it's Ethics 101. It's a classic case of
the appearance of impropriety—even if
there isn't any."

The practice was disclosed in detail in a May 2003 report from the
Center for Public Integrity. The report raised the ire of the public as
well as U.S.  Rep. Frank R. Wolf, R-Va., a member of the House Committee
on Appropriations and chairman of the subcommittee that oversees the
FCC's budget.

"We met with Chairman Powell and he committed to end the travel," Wolf
told the Center. "No more travel paid for by industry."

The new policy is reflected in the $375 billion spending bill signed
into law by President Bush on January 23. "The conference agreement
includes a level of funding that is sufficient to accommodate
mission-critical travel," reads a House-Senate conference report
accompanying the bill.

Despite that language, the FCC received about $7 million less in its
current appropriation than what it asked for.
FCC spokesman David Fiske told the Center that even with less money, the
agency still was able to shift more money to the travel budget of the
five commissioners. The allotment has increased from $1,413,000 in
fiscal 2003 to $1,734,000 this year, an increase of $321,000.

"This level was set in large measure to allow the commission to spend
more travel from our appropriated funds and to decrease
regulated-industry-funded travel," he said.

Last year, all five commissioners, in addition to 12 other FCC staffers,
went to the convention in Las Vegas at a total cost of $26,309 to the
NAB, according to travel records obtained by the Center.

Background

Last May, the Center released a report chronicling how FCC officials had
been showered with nearly $2.8 million in travel and entertainment
expenses over the past eight years, most of it from the
telecommunications and broadcast industries the agency regulates.

The report received extensive media coverage. Following its release,
Senate Energy and Commerce Committee Chairman Sen. John McCain included
language in the FCC's reauthorization bill that would eliminate the
practice, but it has yet to pass.
The issue was raised again on Capitol Hill, this time in the House,
during debate over the FCC's budget in July.
"One commissioner, who has only been a commissioner since July 2001,
took 12 trips valued at over $14,000," Wolf said, referring to figures
from the Center report. "One career employee took 104 trips valued at
$150,000, including (trips) to France, Japan, Singapore, the United
Kingdom and Sweden. That means the regulatees are paying for the trips
of the regulators."

The Center's travel report also received attention from the General
Accounting Office—Congress's investigative arm. A GAO investigator asked
for and received several copies of the Center's report last summer.

On July 25, Wolf penned a letter to Powell stating he was "extremely
troubled" concerning "travel of FCC staff and commissioners" and asked
Powell to take steps to end the practice.

"In this town, perception often becomes reality, so I sincerely believe
it would be in the best interest of the FCC—and the American public—if
the travel of FCC commissioners and staff were only through appropriated
funds," wrote Wolf.
In his letter to Powell, Wolf took particular issue with contentions by
both FCC and communication industry officials that the agency did not
have an adequate travel budget.

"For the record, the FY 2003 budget request for the FCC was fully funded
and represented more than a 100 percent increase over what your agency
spent on travel in FY 2001," wrote Wolf. "Nevertheless, if money remains
an issue, I would be willing to work with you to address the problem."

In his response, Powell said the FCC had adhered to all ethics laws and
guidelines related to travel, but he conceded that "certain travel paid
for by industries that we directly regulate can create an appearance of
impropriety, even when such travel is fully authorized by federal law."

"Travel to industry conventions, trade shows and academic symposiums are
important to our mission," wrote Powell. "I believe, however, as you do,
that such travel would be better funded by government appropriations so
as to remove any hint of impropriety."

In his response to Wolf, Powell sought a $500,000 increase in the 2005
fiscal budget which begins in October. Fiske said that increase is not
included in the commission's budget request to Congress for fiscal 2005.

No more business as usual

It is not certain how many federal regulatory agencies accept free
travel from industries they regulate. Wolf says that the practice is not
accepted at the Securities and Exchange Commission.

The travel exposé was released shortly before the FCC approved rules
that would greatly relax ownership restrictions on broadcasters. The
report, combined with intense public interest in the ownership debate,
likely forced a change, according to McChesney.

The FCC's ownership decision was met by hundreds of thousands of
complaints from citizens, and resulted in a number of legislative
efforts to roll back the rules. A federal appeals court in Philadelphia
stayed their implementation and recently heard arguments both pro and
con.

The FCC voted 3-2 to raise the total number of households a single
broadcaster may reach to 45 percent, up from 35 percent. Following
negotiations between the White House and members of Congress, the limit
was set at 39 percent.
Among the funders of FCC travel were Viacom and News Corp. Both media
companies own television outlets that reach more than 35 percent of
households, but fewer than the new 39 percent cap.

Wolf said he considered stronger language in the appropriations bill,
but withdrew it because Powell was "very, very amenable to a change."

He added that the change likely would not have happened were it not for
the Center's study. "Honestly had your stories not run I don't know that
there would have been the attention to it, and it would probably still
be going on."

Taxpayers pick up tab

Generally speaking, it's not considered good public policy for a
regulatory agency to rely on funding by the businesses it oversees to
pay for its travel and expenses. But NAB spokesman Dennis Wharton said
taxpayers may not feel that way.
"To the critics I would ask, is it better to have taxpayers paying the
freight for these trips? And I would hazard a guess that many taxpayers
would suggest the answer is no," he said.

But even that point can be argued, given that almost all of the FCC's
$274 million pot of revenue consists of regulatory fees paid by
industry.

Despite the chairman's order and congressional scrutiny, not all travel
by the FCC and its employees will be paid for strictly with FCC funds.
Fiske said there may be some exceptions for non-profit organizations
that are not regulated by the FCC.
In addition, some lower level staff and technical people may still fly
on the industry's dime "to the extent that it happens at all," he said.
But those requests will undergo "strict scrutiny" by FCC senior
managers. "As far as the high level, the decision makers, that is what
he [Powell] is generally referring to in respect to ending the
practice."

Jeffrey Chester, executive director of the Center for Digital Democracy
and another frequent FCC critic, said the change is significant.

"I think that one of the ways that the regulatory process has been
captured routinely by industry is this kind of stealth junketing that's
going on," he said.

He added that the shift in policy is an "important breakthrough for the
public because it pierces this private club based in Vegas, New Orleans
and Palm Springs that the industry has created for the FCC over the
years."

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