Public Inspection File Rule: FCC Asks If It’s Really Necessary

Thanks to Paperwork Reduction Act, public file rule now out for comment

Here’s a surprise! The FCC has invited comments on whether or not the local public inspection file requirement is really necessary. Since the Commission has assiduously ignored – for more than five years – a petition for rulemaking seeking the abolition of those requirements, this invitation should puzzle some and thrill others.

As it turns out, the obligations imposed by the public file rules constitute “information collections” (in the parlance of our old friend, the Paperwork Reduction Act), and we all know what that means: periodically (like every three years) the FCC must justify such requirements to the Office of Management and Budget. The current OMB approval is set to expire on September 30, 2011, which means that, if the Commission plans to keep those rules on the books, it’s got to re-justify the rules to OMB’s satisfaction. That process entails two opportunities for public comment stretching over at least 90 days. With less than 180 days to go before expiration, the FCC has now started that process.

Unlike other Commission proceedings that get kicked off with much fanfare – public notices, Commissioners hailing “vibrancy”, “robustness”, “transparency” and the like, maybe even a webcast or blog – this one is more like a stealth item wrapped in an invisibility cloak flying under the radar. So far all we’ve seen is a blander-than-bland Federal Register announcement. 

But that doesn’t mean that the party hasn’t started, so come on down.

The public file rule for commercial broadcast stations may be found in Section 73.3526; for noncommercial stations, it’s in Section 73.3527. (Two other sections relating to political files – 76.1701 (cable operators’) and 73.1943 (broadcasters’) – are also included in the Commission’s inquiry.) As the FCC sees it, public files provide members of the local audience a quick and direct way of monitoring broadcaster performance. 

According to many broadcasters, though, such files are largely if not totally ineffective and unnecessary, since (in the reported experience of many of those broadcasters) the public seldom if ever inspects the files. From that perspective, the requirement to maintain the files is an empty make-work exercise that serves no purpose . . . other than to provide the FCC with a way to collect tens (if not hundreds) of thousands of dollars in fines from folks who happen not to have dotted all their public file I’s and crossed all their public file T’s. Related gripe: the broadcast renewal application form requires licensees to rat themselves out with respect to such miscues, dramatically reducing any enforcement burden the FCC might otherwise encounter.

Among the questions on which the Commission is now inviting comment are:

(a) whether the public file rules are “necessary for the proper performance of the functions of the Commission, including whether the [collected] information shall have practical utility”; and

(b) the accuracy of the Commission’s burden estimate.

As to the first question, the FCC already has an inkling. In January, 2006, our old friend, communications attorney David Tillotson, filed a petition for reconsideration urging that the public file rules be eliminated. After four months (and, we understand, some pushing by Tillotson), the Commission assigned his petition a file number (RM-11332) and issued a public notice. Don’t remember that notice? That’s not a surprise, as it was another one of those stealth/invisible/under-the-radar items, tersely describing Tillotson’s proposal only as involving some unspecified “amendment” of the rules. (Here’s a link to it.)

But even with that lack of official drum-beating, the petition attracted more than 30 comments. Only three of those indicated any support at all for the existing rules (and one of those supporting commenters referred to the requirement as “a pathetic vestige”. With friends like that . . .). The opposing commenters were broadcasters – many with decades of experience in the industry – attesting to the fact that the public has historically shown virtually no interest in the public file.

As to the question of the FCC’s “burden estimate”, get set for a chuckle.

According to the Federal Register notice, the Commission calculates the “Estimated Time per Response” – which we understand to mean the total time that each broadcaster spends to assure compliance with the public file requirement – to be “2.5-109 hours”. The notice provides no breakdown of those numbers; indeed, it doesn’t even indicate whether the time estimate involves weekly, monthly or annual increments. But back in 2008, the FCC provided OMB with this relatively detailed set of estimated annual burdens:

So the “2.5 hour” low-end estimate presumably relates only to cable systems. In the 2008 estimates full power broadcast stations all clocked in at least 110.25 hours per year – exceeding the FCC’s current stated high-end estimate of 109 hours. And that’s just for radio stations. If our math is right, the estimated burden for commercial TV stations in 2008 was 191.25 hours.

The PRA rules provide that an agency’s burden estimate must be “specific” and “objectively supported”. Since the 2011 notice provides no real detail about the provenance of its estimates, we can’t say whether it meets those criteria. But the public file requirements haven’t changed substantially since 2008, and our guess is that FCC’s 2011 time estimates are based on the same calculations as the 2008 estimates above. (That guess is bolstered, at least in our minds, by the fact that the Commission’s 2011 estimate of “total annual burden” is 1,831,706, which just so happens to be the identical seven-digit figure it came up with in 2008. Coincidence? We think not. By the way, while the 2011 notice does not indicate what unit the FCC might be talking about there – 1,831,706 days? pieces of paper? monkeys with typewriters? holes to fill the Albert Hall? – the 2008 report to OMB makes clear that that refers to hours.)

This, of course, is not the first time we have seen such an extravagant – and risible – time estimate from the Commission.  But the real punch line is the Commission’s estimate of the “Total Annual Cost”, which we understand to mean how much it should cost the regulated party to comply with the rule. According to the FCC, that would be (get ready for it): “None”. (Note that the Commission’s notice is not a model of clarity, so it’s possible that the “Total Annual Cost” here does not refer to the cost to the regulated party – but, if not, then who does it refer to?)

As with its time estimates, the current Federal Register announcement gives us no breakdown or explanation for this cost estimate. But again, the FCC’s 2008 submission to OMB is instructive. There, using the “hourly burden” estimates indicated above, the Commission calculated that the “Total Annual ‘In-house’ Cost” comes to $37,469,148. Yet even then, the Commission still concluded that the “Annual Cost Burden” would be “none”.

There is obviously considerable room for clarification by the FCC on all this.

The public file rule might serve some valid purpose – but, since the Commission has never done anything to investigate the validity of that proposition, nobody can say for sure. Given the fact that the Tillotson petition has been stuck in (or perhaps behind) some bureaucratic drawer for five years already, we can probably assume that the FCC is not enthusiastic about launching such an investigation on its own.

But the Paperwork Reduction Act requires the Commission to justify these rules, so like it or not, the FCC has got to invite and, theoretically, consider comments about them: do they serve a useful purpose, are the FCC’s burden estimates valid and, if so, does the supposedly useful purpose justify the supposedly valid burdens? More importantly, the Commission must satisfy the OMB that the FCC’s assessment is correct.

In other words, anyone who has any thoughts about the public file should take advantage of this opportunity to articulate them to the FCC. The Commission will be accepting comments through June 17, 2011. After that, the Commission will bundle up any and all comments submitted and send them over to OMB, along with a statement in support of the rules (assuming that the Commission is not persuaded by the comments to drop the rules entirely). OMB will then provide an additional 30-day comment period.  If OMB declines to approve the rules, the FCC will be unable to enforce them.