FCC to OMB: "No mas!"

One of the pleasant vestiges of 1980 is the Paperwork Reduction Act, a law intended to curb the excesses of federal regulatory agencies by mandating independent review of all new regulations which impose paperwork burdens on the public.  The idea was that agencies must quantify and justify such burdens before imposing them on regulated industries or the public.  The Office of Management and Budget (OMB) was appointed to be the final checkpoint on the regulatory assembly line to ensure that agencies were not overstepping.  This, of course, was in the era when "big gov’ment" was Public Enemy #1, and "paperwork" was a dirty word. 

There’s obviously been some slippage since 1980 as the FCC has imposed burden after burden on the telecom industries, many of which involve considerable expense and reams of paperwork in the form of periodic reports or record-keeping.  The vast majority of these regs have been rubber-stamped with OMB approval.   (Ironically, the process actually increases the amount of paperwork generated by an agency as part of its justification of the paperwork it is imposing on others.)

That’s why it was satisfying last week to see OMB manfully exercise a rare veto over an FCC rule.

Specifically, the FCC had adopted rules which imposed an obligation on the largest cellular carriers to maintain eight hours of emergency battery back-up at cell sites. (This was a knee-jerk reaction to difficulties encountered during Hurricane Katrina when many cell sites lost electrical power and could not operate for hours or days.)  The rule elicited howls of protest from the affected carriers who challenged the procedures used by the FCC in adopting the rules as well as the enormity of the burden which had rather casually been imposed.

The tenuousness of the FCC position was first confirmed when the reviewing court of appeals granted a stay of the rules — an indication that it considered the appeal to have substantial merit. When it came time for oral argument, the Court suddenly became interested in the Paperwork Reduction Act. Since OMB had not yet signed off on the rules, the court decided that the case was not yet ripe for action.   If OMB ultimately rejected the rules, the Court reasoned, the Court would have wasted its time reviewing the substance of the rules — and courts never decide cases if they don’t have to. The case was therefore remanded to the FCC to await OMB action.  

It turns out that the Court’s reticence was well-founded. OMB did reject the rules as being unjustifiably burdensome. While an agency can contest the OMB’s determination, the FCC has decided not to do so. The rules are therefore ineffective unless and until the FCC revises them and justifies whatever burden is then created.  The FCC has now announced that it is throwing in the towel and going back to the drawing board on these rules, so the world is temporarily safe from battery back-up requirements.

The larger lesson here, though, is that the Paperwork Reduction Act remains a viable, if little used, salient in the public’s thin defenses against the onslaught of federal regulation. This decision may invigorate the industry to aggressively challenge FCC regulations at the OMB level with the hope that somebody over there is now actually listening.