House, Senate proposals – S.1784, H.R.3309, S.1780 and H.R. 3310 – look to increase transparency, efficiency, predictability of Commission’s activities

On November 2, Rep. Greg Walden (R-OR), Chairman of the Energy and Commerce Subcommittee on Communications and Technology, and Senator Dean Heller (R-NV) took the wraps off  legislation aimed at improving regulatory process at the Federal Communications Commission (FCC).  Just how might that be accomplished? According to the bills’ sponsors, by imposing a number of procedural constraints on the Commission that would force it to act more transparently, more efficiently, and within more predictable time frames.

As we’ve previously reported, over the last several years FCC process has at times been a source of bipartisan frustration.  Concern about the absence of certainty in how – and how fast – the process will run has developed into a mini-movement to revisit agency process.  Agency practices that have given rise to this alarm include: texts of orders not being released until weeks or months after their nominal adoption; “shot clocks” for agency action that are inconsistently applied (when they exist at all); unilateral control of the Commission’s agenda being wielded by the Chairman (allowing the Chairman to prevent action on matters that a majority of Commissioners might prefer to vote).

And, perhaps, the attention of a divided Congress is more easily attracted to an agency that asserts itself into areas where its statutory authority is at best indirect and, in the eyes of some, even nonexistent (hard to believe? check out the D.C. Circuit’s 2010 Comcast decision on net neutrality).

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.