CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

As far as the FCC was concerned, “reasonable” here meant that local governments should be expected to take no more than 90 days to act on collocation requests and 150 days to act on all other requests. In this context, “collocation requests” involve modifications to already existing wireless facilities, including addition of an antenna to an existing tower as long as the change doesn’t involve a “substantial increase in the size of the tower”.

So the pressure is on for localities to act on wireless siting proposals: if they don’t meet the Commission-imposed time limits, the siting proponents have a prima facie argument that the locality is in violation of the Communications Act. That immediately puts the locality on the defensive (although, since the “shot clock” time frames are just presumptions, the local governments do have the opportunity to try to rebut those presumptions).

The Texas municipalities of San Antonio and Arlington challenged the Commission’s declaratory order on a number of grounds, both procedural and substantive. The Fifth Circuit had little trouble brushing all the quibbles aside. 

Actually, the Court needed brush only Arlington’s quibbles aside. In a ruling of key interest to communications law practitioners, the Court dismissed San Antonio’s petition. San Antonio, which did not seek reconsideration at the Commission, did not file its own request for judicial review until after the FCC had disposed of others’ petitions for reconsideration. Too late: the Court reasoned that San Antonio’s time for seeking review ran from the original FCC action date, not the date of FCC action on the reconsideration petitions.   Since the action on those petitions simply affirmed the original decision, the FCC’s reconsideration action was not a separate and independent event opening a new opportunity for appeal by San Antonio.   These procedural niceties keep lawyers awake at night but have the opposite effect on lay readers, so we won’t discuss them further here. The net result was that a couple of arguments raised by San Antonio but not by Arlington could be ignored by the Court.

With respect to the nitty-gritty substantive issue in the case – i.e., are the 90 and 150 day limits valid? – the Court concluded that the FCC’s judgment was reasonable and entitled to the level of deference courts normally afford agency decisions (at least when the judges can make sense out of the agency’s reasoning). Importantly, the Court observed that the FCC’s “shot clock” limits are not absolute. That is, failure by a local government to meet those time limits does not automatically mean that that locality has per se violated the 1996 Telecom Act. Rather, it merely means that the burden shifts to the locality to explain its failure to meet the applicable deadline. Such explanations might, in the Court’s view, hinge on “extenuating circumstances”, or possibly on the wireless applicant’s own failure to submit requested information.  Alternatively, the local government might note that it was acting diligently in its consideration of an application, that the necessity of complying with applicable environmental regulations occasioned the delay, or that the application was particularly complex in its nature or scope. Essentially, the Court seemed to view the Commission’s 90/150-day limits as guidelines, entitled to deference but not absolutely and irrevocably binding in all circumstances.

To get to that point, the Court made reasonably quick work of a variety of procedural complaints advanced by Arlington. While the Commission’s method of dealing with CTIA’s initial request may not have conformed precisely with requirements of the Administrative Procedure Act – when it adopted its declaratory order, was the FCC engaging in “rulemaking”, “adjudication”, or some other activity? – the Court concluded that any FCC deviation from the procedural straight-and-narrow was harmless.

The Court did spend a fair amount of time grappling with Arlington’s argument that Congress hadn’t given the Commission the authority to put specific limits on the “reasonable period of time” language in the 1996 Telecom Act. Truth be told, the scope of the FCC’s authority is not at all clear here, but the Court determined that the statute, and the legislative history underlying it, were ambiguous. Given that ambiguity, the Court concluded that the FCC was entitled to do what it had done below. And, as noted above, the Court was inclined to defer to the Commission’s substantive determination.

Where, then, does the Court’s decision leave us? Wireless operators and/or tower companies are entitled to assume that, once they have filed all information required by a local jurisdiction, the jurisdiction will act on their siting applications within the applicable 90- or 150-day time period. If the local government drags its feet beyond that time frame, the aggrieved party may seek judicial intervention because of the locality’s failure to meet the FCC’s presumptive time limits. The threat of such litigation might be enough to cause the local officials to act on the construction proposal – but there’s no guarantee of that. As the Fifth Circuit seemed to emphasize, the locality could still cling successfully to a variety of excuses or explanations for its tardiness. In the end, the siting proponent will have the burden of persuading the court that the locality’s delay has been unreasonable.

Nevertheless, at least we have a clear starting point with which to mark the approximate outlines of local governmental delay. Ideally, that will prove useful to all concerned.

These bills are not the first evidence of Congressional unrest in this area. Chairman Walden has repeatedly expressed an interest in improving transparency, predictability, and consistency at the FCC.  Other Republican members have been vocal in their dissatisfaction with FCC net neutrality proposals and the conduct of merger reviews.  Democrats, too, have had their say on how to best improve process, including Rep. Anna Eshoo (D-CA), sponsor of the Federal Communications Commission Collaboration Act, aimed at changing the statutory sunshine rules that some say inhibit Commissioners from interacting in the most efficient way.

The latest step has been the introduction in the House and Senate of two pairs of essentially identical bills: S.1784 (Heller) and H.R.3309 (Walden), intended by its sponsors to increase transparency and efficiency in FCC procedures; and S.1780 (Heller) and H.R. 3310 (by Rep. Steve Scalise (R-LA) with Walden as cosponsor), which would consolidate the reporting obligations of the FCC in order to improve congressional oversight and reduce reporting burdens.) Walden’s Communications Subcommittee plans to mark up the legislation on Nov 16. The sponsors have released a summary of the bills’ goals, which you can read here.

In the nitty-gritty details of the bills there are some interesting highlights. When issuing a notice of proposed rulemaking (NPRM), the Commission would have to:

• provide comment and reply comment periods of at least 30 days each;
• expressly identify a previous action (e.g., Notice of Inquiry, prior NPRM, court order) in the preceding three years from which the new NPRM is a “logical outgrowth”. Alternatively, the FCC could make a finding that the new NPRM will create no “additional burdens on industry or consumers” or that an NOI would be “impracticable, unnecessary or contrary to the public interest”;
• include the specific language of the proposed rule or rule amendment; and
• propose “performance measures” by which the effectiveness of the new/amended rule would be measured.

In adopting new rules or amending existing ones, the Commission would: first have to identify and analyze the “specific market failure, actual consumer harm, burden of existing regulation, or failure of public institutions that warrants the adoption or amendment”; and then provide a “reasoned determination” that the benefits of the proposal would outweigh its costs. Adopted rules/amendments would also have to include “performance measures” based (to the extent possible) on data already collected by the Commission.

Presumably to avoid the problem encountered particularly during the tenure of former Chairman Kevin Martin – when Commissioners complained of not receiving proposals on which they were expected to vote until immediately before the vote was to be taken – the Commission would be required to adopt rules providing for “adequate deliberation”. These would include making the text of agenda items available to the public “in advance” of open meetings.

Out of concern that existing sunshine rules may sometimes create less, not more openness, a bipartisan majority of Commissioners could hold a closed-door meeting if: there were no votes; participation is limited to Commissioners, staff, members of joint boards or their staffs; and an attorney from the Commission’s General Counsel is present.

To prevent a Chairman from unilaterally, and indefinitely, withholding proposals from a vote, the bills would require new FCC procedures allowing a “bipartisan majority” of Commissioners to: direct the staff to prepare draft orders for Commission vote; and then to put such drafts on the agenda for decision.

The Commission would have to develop deadlines for resolving any and all types of requests for FCC action. While the bills provide no guidance as to any particular time periods the sponsors might have in mind, the fact is that any deadlines would likely be preferable to the current situation, where virtually no internal processing deadlines exist at all.

The Commission’s ability to impose conditions on transactions (e.g., assignments of license or transfers of control) would be narrowed substantially. Such conditions would have to be “narrowly tailored to remedy a harm that arises as a direct result of the specific transfer or specific transaction”. Perhaps more importantly, the Commission could impose a condition only if it could impose such a requirement “under the authority of a specific provision of law”. This is presumably directed to the FCC’s recent inclination to achieve indirectly, through “conditions”, goals that it could not achieve directly through regulation. This limitation would apply as well to supposedly “voluntary” commitments made by parties seeking FCC approval. This practice was evident in the approval of the NBC/Comcast merger, where NBC/Comcast agreed to a number of “voluntary” commitments that the Commission itself did not have the authority to impose.

The bills would also require the Commission to prepare a number of reports on various aspects of its operations, including the status of pretty much anything pending before the Commission at any time. A new report, to be submitted to Congress every other year, would broadly assess the state of competition in the “communications marketplace”, a marketplace encompassing any and all communications technologies.

These are broad proposals that would substantially alter, if not the way the current FCC conducts much of its business, then the way future Commissions are required to do business. The prospects for passage are far from clear – and the November 16 markup should further clarify the bill’s level of support – but the fact that that process has been formally initiated should send a clear message to the FCC that change may be on the way.

The process generally starts when the Commission receives a complaint about an alleged rule violation, or possibly turns up a violation on its own during a field inspection. 

The first step is for the Commission (or one of its Bureaus) to issue a Notice of Apparent Liability (NAL) describing the alleged violation and proposing a penalty amount. The NAL gives the licensee a chance to tell its side of the story. If that story doesn’t convince the Commission to back off (and it almost never does), the next step is a Forfeiture Order recapitulating the facts, addressing any arguments raised in the licensee’s response to the NAL, and ordering payment of the fine within 30 days. 

Just because the FCC “orders” a licensee to pay, the licensee doesn’t have to pony up. Instead, it can sit back and do nothing, and the FCC cannot hold that against the licensee. Rather, the burden is then on the Commission to refer the matter to the Department of Justice (DoJ) to sue the licensee for the amount of the fine. And get this – the trial is what they call “de novo”, which means that the burden is on the government to go back to square one and prove that the licensee really did violate the rules. The licensee, in turn, gets to challenge every element of the FCC’s case. 

Obviously, this multi-step process tends to drag on, with extended delays possible at each step of the way. The final step – i.e., convincing DoJ to sue – is often the ultimate roadblock, since DoJ tends to have better things to do with its scarce litigation resources than to file nickel-and-dime lawsuits for petty violations of obscure regulations.

Working against the FCC all along the way are two statutes of limitations.

The first limits the time within which the FCC may issue an NAL. The Communications Act (47 U.S.C. § 503(b)(6)) specifies that the FCC cannot issue an NAL for conduct which occurred either (a) more than one year prior to the NAL or (b) prior to the commencement of licensee’s current license term, whichever is earlier. The first aspect of that limit – the one-year cap – is straightforward. The second aspect not so much. A licensee’s “current” license term extends until its next renewal application is granted. That means that the FCC can avoid the one-year limit on NALs simply by sitting on the renewal applications of stations against which complaints have been lodged. Stations caught in that posture are said to be subject to an “enforcement hold” on their renewals. This happens routinely, as many TV licensees targeted by, e.g., indecency complaints can attest.

The second limit is the five-year bar imposed by 28 U.S.C. §2462, mentioned above.

Importantly, it appears that that five-year limit counts down irrespective of any procedural devices (for instance, “enforcement holds”) the FCC may deploy to keep the ball in play. That is, while Section 503 may enable the FCC to delay indefinitely the issuance of an NAL, Section 2462 does not appear to be so forgiving. So while the FCC dilly-dallies with its own processing of alleged violations, the clock is still running against the government’s ability to collect even if a violation is ultimately found to have occurred.

All of this should be of interest to any licensee whose renewal application happens to have subjected to an “enforcement hold” arising from a pending complaint (or a violation which the licensee itself reported in its most recent renewal application). Licensees in that situation might want to get out the calendar and start counting the years. Even if the FCC may have tried to keep its options open by not granting the renewal application, the five-year limit in Section 2462 might still pull the rug out from under the Commission.

The first question is: when does that five-year period start for purposes of the statute of limitations? That’s not cut-and-dried. At least one federal court of appeals has assumed that the five-year period begins when the violation occurs – for example, when the allegedly indecent material is broadcast by the target station. An alternate possible starting point would be the date on which the Commission officially learned of the possible violation (by, e.g., receiving a complaint or inspecting the station). 

Unfortunately, the date for calculating the start of the five-year Section 2462 limitation in the context of FCC enforcement actions has not been definitively identified by any court, yet. But while it’s possible that the creative minds at the Commission could conceivably come up with some other alternatives, the two described above are the most obvious. And, indeed, the Enforcement Bureau seemed tacitly to suggest in a couple of high profile indecency forfeiture cases in 2008 (i.e., the “Married by America” and “NYPD Blue” proceedings) that the five-year statute of limitations period begins running on the date of broadcast.

The question has recently been teed up by several licensees who were targeted back in May with five-digit fines for alleged children’s television violations. (We described the NALs in the May, 2010, Memo to Clients.) The licensees have asked that the FCC rescind the NAL’s issued because the supposed violations occurred more than five years ago and were reported to the FCC in the licensees’ respective renewal applications, all of which were filed more than five years ago. The argument is clear: if, because of the passage of time and the operation of Section 2462, the FCC can’t in any event collect any fines even if the violations did occur, then no purpose is served by issuance of an NAL (or Forfeiture Order) at this point. We’ll keep an eye on how that argument fares and report back as developments warrant.