Summary: GAO was asked to review the Federal Communications Commission's (FCC) international telecommunications activities and its organizational structure and resources for fulfilling its international communications responsibilities. The review focused on FCC international activities relating to facilities, service and rate regulation, conferences, the treatment of foreign entities in the United States, and FCC coordination with other agencies on international telecommunications matters. Issues were also identified for future evaluation.
International telecommunications is of vital importance to the United States. International diplomatic and economic activity, military preparedness, and cultural exchange all depend on an adequate international telecommunications network. As the FCC budget has decreased, so have the resources allocated to FCC international telecommunications activities. Workyears allocated in 1983 for FCC international activities will decrease significantly from 1982, as will funds for international travel. FCC will decrease the participation at international conferences and preconference planning meetings. The impact of these reductions has not been studied. FCC recently has had to consider matters beyond its traditional expertise, such as foreign affairs, national security, trade policy, and reciprocal treatment of foreign firms. Although these considerations may require coordination with other Federal agencies, no formal process exists for such interaction. For the regulation of common carriers, FCC has used a form of price/earnings regulation that relies on rate of return/rate base regulation. Under this system, a regulatory agency attempts to simulate a competitive outcome by limiting a regulated firm's revenues. An audit report of international voice and record carriers indicated that carriers' rates of return might be excessive. FCC concluded that it was not necessary to begin a procedure for establishing reasonable rates of return for carriers. An official stated that FCC did not have the resources to prescribe depreciation rates for international carriers in some cases.
