Pritzker Goes to Bat for Commerce’s Proposed FY2015 Budget on Capitol Hill

The Commerce Department, home to NTIA, NIST and the U.S. Patent and Trademark Office, faced pressure on multiple fronts on Capitol Hill this week. Lawmakers in both chambers scrutinized Commerce Secretary Penny Pritzker, before a Senate Appropriations subcommittee Thursday and a House Appropriations subcommittee Wednesday, on the department’s proposed FY 2015 budget of $8.8 billion, 7 percent higher than in FY 2014. Key points of concern included Commerce’s management of patents, broadband projects and cybersecurity. Lawmakers also asked about the transition of the Internet Assigned Numbers Authority (IANA) functions, which NTIA has contracted out to the Internet Corporation for Assigned Names and Numbers (ICANN), to global multistakeholder governance, an issue hotly contested among other congressional committees recently.

Sen. Mark Kirk, R-Ill., brought up the “rolling story” that President Barack “Obama is going to give up control of the Internet to the UN or something.” He fumbled over the initials for ICANN and brought up the possibility of China asserting Internet influence, “which would totally interrupt those values” of the Internet as it exists now, Kirk said.

"I want to be absolutely clear,” Pritzker replied. “We are committed to a free and open Internet.” She said the Internet is already essentially run by this multistakeholder process and that NTIA simply oversees ICANN’s execution of the IANA contract: “We simply monitor whether that contract is being implemented effectively.” Commerce is committed to ensuring the Internet remains free and would “not accept a proposal where ICANN is replaced with a government or intergovernmental organization like the UN,” she said, saying the transition would not involve “handing over” control of Internet architecture to any government.

"The committee ought to block it,” said House Appropriations Commerce Subcommittee Chairman Frank Wolf, R-Va., on Wednesday during his hearing of the IANA transition. “We ought not go down this path.”

Rep. Andy Harris, R-Md., called the transition “the latest hot potato” in which Commerce would be “transitioning this to potentially foreign control.” He attacked the move for its implications and brought up Russia and Turkey as two countries that threaten the free Internet. “Once we let this slip out of our hands, once this is out of the box, there’s no putting the genie back in this bottle,” Harris said, also flagging how Congress funds the transition and has a role. Wolf said Harris “is exactly right.” ICANN has “matured enough to execute the contracts on its own, which it has been doing,” Pritzker told the House lawmakers. Pritzker shares the concerns about foreign control and “we will not proceed” if Commerce is not convinced the Internet will remain free, she said.

Commerce struggles with its broadband stimulus program projects, Department Inspector General Todd Zinser told Senate Appropriations Commerce Subcommittee lawmakers in written testimony (http://1.usa.gov/R6PJSR). The Broadband Technology Opportunities Program “entails the most challenging awardee spending issues,” Zinser said. As of March 17, 21 of the more than 200 BTOP projects had been closed, some with deadlines extended to Sept. 30, 2015, he said. His testimony outlined “the need for continued management attention” to awards and cited specific instances such as the Colorado grantee EAGLE-Net. The award closeout process is taking longer than expected, especially for infrastructure projects, Zinser said.

Pritzker emphasized in both chambers that Commerce has helped lay down 100,000 miles of broadband infrastructure. “To continue expanding broadband capacity and promoting policies to ensure a free and open Internet, the budget requests a total of $51 million for the National Telecommunications and Information Administration (NTIA), an increase of $5 million over FY14. This increase will support increasing wireless broadband access and critical telecommunications policy coordination,” Pritzker testified before the Senate (http://1.usa.gov/1qzGC7t).

Senate and House lawmakers pressed Pritzker on the need for a robust Patent and Trademark Office. “Our expectation is we'll receive about $3.4 billion worth of fees this coming year,” which will help Commerce “really address the IT system, which needs investment,” Pritzker said Thursday. “That was something that was a casualty in the FY13 situation.” Senate Appropriations Committee Chairman Barbara Mikulski, D-Md., pressed Pritzker to clarify the ’situation’ referred to the sequester, and Mikulski expressed desire for bipartisan change to “permanently cancel sequester” as a source of worry for government agencies. Sen. Jack Reed, D-R.I., referred to “the tightness of your budget, and that’s being mild,” speaking of the overall Commerce Department budget. Rep. Adam Schiff, D-Calif., said he’s “concerned that the current [patent] system is broken” and hopes to resolve problems through voluntary cooperative efforts. He mentioned a potential need to standardize take-down notices and he touched on problems with so-called “patent trolls” and demand letters -- concerns multiple lawmakers raised and pegged to congressional efforts to revamp patent law, ongoing in recent months.

"We currently have a backlog of about 600,000 patent applications,” Pritzker said, with hopes for getting down to around 450,000. Patent examiners require “an enormous amount of training,” she said. Mikulski referred to the struggles of the biotech community, which often needs approval from both the Patent and Trademark Office and the U.S. Food and Drug Administration.

The proposed budget for NIST is $900 million, with $91 million devoted to cybersecurity, research and private-sector partnerships, “standing sentry over American innovation” just like the Patent and Trademark Office, Mikulski said in her opening statement (http://1.usa.gov/1qlxvsX). Commerce “needs to be cyber-obsessed, creating ways to protect its own dot.gov systems, while working with the private sector to better protect dot.com,” Mikulski emphasized. “I want to be clear -- cybersecurity is not surveillance. Cybersecurity means understanding and protecting us and our information from criminals out to steal our credit card information and personal identities, and to rob companies’ intellectual property.” (jhendel@warren-news.com)