“Effective dates” can be hard to pin down,  thanks to contradictions, omissions and an overall lack of clarity by the FCC – take Form 477 as an example

The November 7, 2011 edition of the Federal Register contained what appeared at first blush to be a fairly routine notice that certain rules had received approval from the Office of Management and Budget (“OMB”) and were therefore going into effect as of the publication of that notice.   But when we lift up that seemingly innocent flat rock of a notice, we observe a swarm of ugly questions about just how and when FCC rules become effective. Because FCC regulations have the force of law and are enforceable by fines in thousands and even hundreds of thousands of dollars, it is critical that the public know exactly when compliance is required. Yet that seemingly simple detail – when do we have to obey a new rule? – can be hopelessly obscure, as was certainly the case in the proceeding referenced in the November 7 notice.

That proceeding involved amendments to Form 477, but the same question – i.e., when does a requirement become “effective” – applies to many other FCC proceedings.

Form 477 is required to be filed twice a year by CMRS and broadband providers. In 2008 OMB had approved it through June 30, 2011. But that approval did not include a number of changes to the form which the Commission had adopted in March, 2008, but had not released until three months later. When it did release the order setting out those changes, the Commission stated that the changes “SHALL BE EFFECTIVE 30 days after publication of notice of the Report and Order and Further Notice in the FEDERAL REGISTER, subject to Office of Management and Budget (OMB) approval for new or modified information collection requirements.” On July 2, 2008, the text of the Report and Order was published in the Federal Register with the following notation:

The amendments to §§1.7001 and 43.11 in this document contain information collection requirements that have not been approved by the Office of Management and Budget. The Federal Communications Commission will publish a document in the Federal Register announcing the effective date.

On Christmas Eve, 2008, the FCC sent the new rules, including the revised Form 477, over to OMB for its review pursuant to the Paperwork Reduction Act. OMB signed off on the new rules and the revised form on January 30, 2009 – but the revised form was approved for only one year (rather than the usual three), i.e., through January, 2010. OMB was apparently concerned about the burdens the revisions would impose on entities required to complete the form, so OMB insisted that the FCC come back in a year, after re-evaluating the reporting requirements and methods.

Usually, once OMB approval has been granted, the FCC publishes a brief notice in the Federal Register alerting everyone that the rules (a) have been approved by OMB and (b) are effective as of the date of that notice.

Not this time.

It wasn’t until November 7, 2011 that the FCC published the notice declaring that the rules were effective as of that date.  That lag time – from 2009 to 2011 – was noteworthy in and of itself. But further examination of the OMB website reveals even more interesting information.

It turns out that, when the one-year approval issued by OMB in January, 2009, expired in January, 2010, the FCC went back for a full three-year approval, which OMB duly granted (through April 30, 2013) – but not until April 26, 2010, i.e., more than a month after the March, 2010 deadline for filing Form 477.  So the revised version of Form 477 would appear not to have been approved at all by OMB for that particular filing opportunity.  The November 7 Federal Register notice doesn’t mention that.

And even though the form had technically been approved by OMB since 2009 (assuming we ignore that gap in 2010), the FCC apparently failed to notify the public (including all affected regulatees) of any OMB approval until November, 2011. Since the Commission itself had specified that the revised rules and form would not be effective until the Commission published a Federal Register notice announcing the effective date, it would appear that Form 477, as revised in 2008, did not become effective until November, 2011.

Of course, everyone in the industry had used the new form twice a year starting in March, 2009, justifiably assuming that the form and its information requirements had become effective. Imagine their surprise when the Federal Register announced that the new reporting requirement had not really become effective until November, 2011!

When it comes to completing Form 477, we’re not talking about a minor chore that can be tossed off in a couple of minutes. According to the FCC’s own estimate (submitted to OMB in the FCC’s February, 2010 re-submission of the form), the burden of filling in Form 477, per semi-annual response, was a whopping 289 hours – and that estimate was reduced from the Commission’s original 2008 estimate of 337 hours.   Let’s do the math: 289 hours twice a year equals 578 hours, divided by 40 hours/week (i.e., a standard work-week) equals more than 14 weeks. In other words, completion of the form could be expected, on average, to require the full-time attention of a single employee for more than 14 weeks, or more than three months each year.

In view of this burden, it’s not unreasonable to expect the FCC to be clear as to when the requirement has taken effect.

But a glance at the Code of Federal Regulations, which would normally be the authoritative reference on an issue like this, only confuses the issue further. Section 43.11 of the 2009 edition sets forth the text of the revised reporting rule, but includes a footnote stating that it “will not become effective until approval has been given by the Office of Management and Budget.”   And over in Section 0.408, a section in which all OMB control numbers and their related expiration dates are maintained, the expiration date for Form 477 is listed as “06/30/11”. But that’s the expiration date for the old version of the form, not the version as revised in 2008.

For an agency information collection requirement to become effective, the Paperwork Reduction Act provides only that the OMB must approve that requirement. As far as we can tell, there is no separate requirement that the FCC or OMB publish a Federal Register notice reflecting OMB’s approval.   So, theoretically, a rule adopted “subject to OMB approval” could become effective immediately upon OMB approval without further action by the FCC. But how would anybody know that the rule had become effective since OMB does not itself publish its approval actions? And why would anyone even think to delve into the deep weeds of the OMB’s records to see if OMB has indeed issued its approval when the Commission has clearly and unequivocally stated that the Commission would announce the effective date in the Federal Register?

Let’s say you are a regulated company and you have to file some information with the FCC, subject to heavy civil penalties and potential damage to your good standing as a licensee if you don’t file, or if you file the wrong information.   Did the pertinent “information collection” requirement that tells you what you have to file become effective when the FCC formally voted to adopt it? Did it become effective when the text was released? Did it become effective 31 days after it was published in the Federal Register? Did it become effective when OMB approved the requirement? Did it become effective when the form bearing the OMB control number was posted? Or did it become effective when the FCC published the OMB approval and announced that it was now “effective” – a date that, in the case of Form 477, occurred more than three years (and six separate filing opportunities) after the information collection was technically adopted by the Commission?

You make the call. Good luck.

Notwithstanding the uncertainty about when the rule went into effect, few would disagree that it makes no sense for the FCC to adopt a rule in March, 2008 – presumably because the rule was in the public interest – only to have that rule sit in limbo until November, 2011 as a result of the Paperwork Reduction Act.    The FCC has recently pledged to get its orders out more quickly after they are adopted, but how about tying up the rest of the loose ends, too?