02/18/02; Vol. 16 No. 22
Telecom Picture Fuzzy in New Budget
By Patience Wait, Staff Writer
President Bush’s proposed budget for fiscal 2003
provides some promise but is hardly a windfall for the struggling telecommunications
industry.
“What we’re seeing right now is not a lot of new telecom money in this budget,” said Ray Bjorklund, vice president of Federal Sources Inc., a McLean, Va., research and consulting firm.
The proposed 2003 budget includes about $52 billion in spending on information technology products and services, evenly split between civilian and defense agencies.
FSI estimates the federal government will spend about $13.5 billion on telecom-related programs, $5.98 billion by civilian agencies and $7.52 billion by defense agencies.
Homeland security’s emergence as a key component of federal spending programs, with proposed spending of $37.7 billion, offers the most likely source of new telecom opportunities, industry officials and analysts said.
The administration, for example, is proposing $3.5 billion for local police and fire departments and emergency medical units that are “first responders” in time of crisis. Some of this funding would go toward improving communications systems, though not necessarily new capacity.
Among the telecom elements FSI had identified before the homeland security budget was released are the need to strengthen the National Communications System, including radio, satellite, wireless and communications continuity; wireless priority services; and improving land mobile radio interoperability.
Tony D’Agata, vice president and general manager of government systems, Sprint Communications Corp., Westwood, Kan., said Sprint has increased its resources for defense and intelligence areas to address government needs for homeland security. “Our goal is to help strengthencommunications and collaboration capabilities,” he said.
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Sprint started moving in that direction last fall on the heels of assisting the government following the Sept. 11 attacks.
“Since 9-11 there’s a large interest in redundant networks, network diversity — that is, more than one provider — increased security and managed services. It’s no longer business as usual on the government side,” said John Polivka, a Sprint spokesman. “There is the opportunity to continue with upgrades and to implement new technologies.”
Because the military relies heavily on sophisticated telecommunications, defense spending will be another big growth area, even if the opportunities are embedded in larger programs, said Lisa Crawford, president of the Crawford Group, a Washington consulting firm.
The same holds true for homeland defense.
“It’s interconnected to the whole global fight on terrorism, and that is going to create connectivity and information sharing among and between agencies that today, because of [current] laws, aren’t allowed to,” Crawford said. “That means hosting solutions and data sharing solutions [with] telecom to manage for them.”
Information security is one part of homeland security already getting a big boost. On Feb. 7 the House of Representatives voted 400-12 in favor of H.R. 3394, the Cyber Security Research and Development Act, which provides $880 million in funding to government agencies to research methods of improving computer and network security.
“A rising tide floats all boats, and homeland defense initiatives are very clearly a rising tide within the federal IT market,” said Payton Smith, manager of public-sector analysis with Input Inc., a Chantilly, Va., research firm. “I think telecom stands to benefit as much as any of the other technology sectors.”
For example, within the proposed Federal Aviation Administration budget, the line item for FAA telecommunications infrastructure rises from actual spending in fiscal 2001 of $66.9 million, to estimated 2002 spending of $81.2 million, to a request for $96.9 million in 2003.
Within the Justice Department’s “significant projects,” a telecommunications line item goes from $35.4 million in 2002 to $48 million in the 2003 request.
The president’s budget will go through many changes as it moves through the congressional approval process and lawmakers add programs and cut funding for others. One of the most visible ideas to be floated relative to improving the government’s security is GovNet, Cybersecurity Adviser Richard Clarke’s proposal to build a private, secure network for federal agencies.
The administration’s budget proposal includes
$5 million for a feasibility study for GovNet. The money is part of the
president’s $37.7 billion homeland security budget.