While supporting the decision, Commissioner O’Rielly criticizes FCC’s “cost/benefit” analysis

In what four out of five FCC Commissioners seem to view as a no-brainer, the Emergency Alert System just got three more event codes and two slightly-revised geographic location codes. The odd man out? Commissioner O’Rielly. He doesn’t question the potential utility of the new/revised codes, but he does take issue with the cost/benefit analysis endorsed by his colleagues. We’ll get to that shortly.

The three new event codes are EWW, SSA and SSW, which stand for “Extreme Wind Warning”, “Storm Surge Watch” and “Storm Surge Warning”, respectively. We all know by now that event codes are elements included in the message issued when an authorized official initiates an EAS alert. The several dozen specific codes mandated by the FCC – you can find them in Section 11.31(e) of the rules – range from “Avalanche Watch” through “Volcano Warning” and on to “Winter Storm Watch”, and include three separate hurricane-related codes.

According to the National Weather Service, however, the three hurricane-related event codes already on the books – i.e., HUW (for Hurricane Warning), HUA (for Hurricane Watch) and HLS (for Hurricane Statement) – only “apply generally to the hurricane event itself, and are not specifically tailored to warn of extreme sustained surface winds associated with a Category 3 (or greater) hurricane.” Hence, in the NWS’s view, additional, more narrowly-defined, event codes are called for to permit officials to provide more accurate warnings.

Historically, NWS had improvised a bit, using the Tornado Warning heading to advise of high winds associated with Hurricane Charlie in 2004 – but that caused confusion among the public and led to “the dissemination of incorrect risk-avoidance advice”. Since 2007 NWS has been using the EWW code in connection with its own weather alert radio system warnings. But EAS participants have been reluctant to add that particular code to their systems because the FCC hadn’t blessed it by including it in the rules.

Now we can consider it blessed, along with SSA and SSW.

In accepting the NWS’s view that more finely-tuned EAS alerts would benefit the public, the FCC rejected the one nay-sayer among its commenters. That nay-sayer, EAS equipment manufacturer TFT, had argued that, with a general hurricane alert already in effect (as would almost invariably be the case before storm surge or high wind warnings would kick in), the public would not likely discern the finer distinctions afforded by the new codes. And, frankly, that’s not an unreasonable observation, particularly in this day and age when meteorological science provides days’, if not weeks’, worth of notice of an impending hurricane. But the FCC was not persuaded.

As for the revised geographic codes, the changes are relevant to you only if you happen to be in the areas defined as “location code 75” or “location code 77”, which cover offshore marine areas in the Atlantic and Gulf of Mexico. The end point for both used to be Bonita Beach, Florida, but the NWS has changed the end point it uses when triggering weather alerts in these areas to Ocean Reef, Florida. Accordingly, it asked the FCC to change the specifications for those location codes in Section 11.31(f), and the FCC was happy to accommodate that request. (TFT objected to this change, too, arguing that those codes are not widely used and any inconsistencies between the FCC’s definition and the NWS’s “will not be meaningful to the public”. The Commission, however, has opted for consistency.)

What does this mean for EAS Participants? Not much, at least for now. As it turns out, because EAS is a voluntary system, the FCC is not inclined to require Participants to upgrade their existing gear to accommodate the new codes. The Commission’s reluctance in that regard is bolstered by the fact that the new codes relate to relatively limited geographical areas – and Participants in those areas are likely to be “highly motivated” to make the changes on their own. So if you’re an EAS Participant, you can modify your existing gear or not, as you wish.

The same is not true for EAS equipment manufacturers. The Commission has decided that manufacturers must “integrate these codes into equipment yet to be manufactured or sold, and make necessary software upgrades available to EAS Participants no later than six months from the effective date of the rule amendments.” Oddly, though, it does not appear that the FCC’s order specifies what that effective date will be. (We anticipate a correction or clarification on that reasonably soon; check back here for updates.)

And EAS Participants are not entirely off the hook. As of one year after the new rules’ effective date (whenever that may be), anybody replacing their current EAS equipment will have to install gear capable of receiving and transmitting the new codes. Whether the replacement gear is new or used, it will have to accommodate the new codes. (FWIW, the NWS does not plan to start using the new codes in its alerts until the 2017 Atlantic Hurricane Season.)

Now, about that cost/benefit analysis.

The Commission concludes that the benefits of these changes clearly outweigh the costs. It figures that the costs are likely to be minimal, since manufacturers assure it that upgrading existing equipment will impose only minimal burdens on EAS Participants. But, as Commissioner O’Rielly observes, the only dollar figure the FCC comes up with on that score is based, inexplicably, on an estimate of the time that it will take EAS Participants to complete the ETRS forms in connection with the EAS test report procedure recently adopted by the FCC. But the completion of online forms does not necessarily tell us anything about the level of difficulty of upgrading equipment, so the FCC’s cost estimates are essentially non sequiturs. Additionally, O’Rielly notes that no dollar figures at all have been associated with the costs which manufacturers will face in upgrading their products. So, in O’Rielly’s view, there is no valid cost estimate on the table.

Ditto on the benefits side. The Commission figures that, if use of the codes saves only one life, that will be worth $9.1 million – based on a U.S. Department of Transportation determination of the “value of a statistical life”. For sure, that would be a heap of benefit … if the new codes would save a life. But, according to O’Rielly, “there is no evidence that the current hurricane and other severe weather codes have been insufficient in protecting life and property or that the updated marine location codes are regularly used”. So while it may seem a reasonable guess that more specific high wind or storm surge warnings might provide some greater measure of protection, it’s at best a guess because there does not appear to be any solid evidentiary basis for it.

This is the second time in as many weeks that Commission O’Rielly has taken his colleagues, and the Commission’s staff, to task for their lack of critical analysis relative to seemingly minor aspects of Commission decisions. But are they really minor aspects? Here, for example: If the Commission is purporting to justify its decision based on a cost/benefit analysis, shouldn’t that analysis be demonstrably valid, with actual support in the evidentiary record? If there is no such support, shouldn’t that be acknowledged and addressed? And if the FCC fails to do so, what does that say about the legitimacy of the rest of the decision?

In this particular case, the question is probably inconsequential: the Commission adopted the new/revised codes unanimously (O’Rielly dissented only with respect to the cost/benefit analysis), and it seems unlikely that the decision will be appealed. But O’Rielly may be doing his colleagues and the staff a favor by calling their – and the public’s – attention to the fact that corners are being cut in the decision-making process. Whether it’s an obviously unsupported cost/benefit “analysis” or citation to statutory sections that do not support the proposition for which they are cited, such flaws undermine the fundamental reliability of the FCC’s decisions. O’Rielly’s recent dissents have, if nothing else, encouraged everyone to read Commission decisions more critically than they might otherwise have. Ideally, this in turn will encourage the Commission (and those drafting its decisions) to take greater pains to insure that the agency’s decisions are well-founded and defensibly analyzed.