House GOP Draft Seeks to Speed FCC Process, Slow Regulation

"There are no statutory requirements in place to ensure that the Commission follows best practices from issue to issue and from one commission to the next,” said a GOP majority memo dated Monday. “Legislation should refine the Commission’s processes while providing the agency with some flexibility that -- in the words of Commissioner [Robert] McDowell -- ‘can’t be abused.'” FCC Chairman Julius Genachowski and commissioners McDowell and Michael Copps declined to comment. Commissioner Mignon Clyburn didn’t respond to a request for comment.

The Communications Subcommittee’s top Democrat, Rep. Anna Eshoo of California, is still reviewing the draft bill, but is pleased that Walden included the proposal from her bipartisan bill (HR-1009) to allow three or more commissioners to meet privately, the Eshoo office said. Oversight Subcommittee Chairman Cliff Stearns, R-Fla., said he wants a full rewrite of the Telecom Act, but “this draft legislation appears to be a good start.” At Wednesday’s hearing, Stearns hopes to learn “more about congressional oversight of the FCC reform process and legislation addressing overregulation at the FCC."

The Walden draft includes proposals “that will significantly increase transparency and guarantee the FCC compiles a better record for decisions,” said Brad Ramsay, general counsel of the National Association of Regulatory Utility Commissioners. Ramsay is scheduled to testify at Wednesday’s hearing. NARUC has previously endorsed sunshine reform to increase communications between commissioners and other federal-state joint board members. The state regulator association hasn’t taken a position on every section of the draft, and thinks a few more reforms are needed, Ramsay said. “Nonetheless, this draft provides an excellent starting point for a bipartisan bill that could pass in this Congress."

Former FCC Commissioner Harold Furchtgott-Roth worries about letting small groups of commissioners meet behind closed doors, he said in an interview. Furchtgott-Roth, director of the Hudson Institute’s Center for Economics of the Internet, was in the minority when he served on the commission. Requiring the presence of commissioners from both parties and an attorney from the General Counsel’s office provides “no comfort,” Furchtgott-Roth said. However, the former commissioner supports shot clocks provided they are actually followed. And he supports requiring that merger approval conditions narrowly relate to the specific transaction. The FCC at times has made rules not required by law, and in other instances neglected to do things required by the law, such as a providing a biennial review of telecom regulations required under Section 11 of the Communications Act, Furchtgott-Roth said.

"Some of the sunshine provisions are fine,” but Public Knowledge believes the draft is mostly about “regulating the regulator,” said a spokesman for the public interest group. “The FCC was established in the Communications Act to make policy and decisions in the public interest,” he said. “The market failure tests and associated requirements add a new, unnecessary element to the Commission’s decision-making authority.”

Several of the draft bill’s proposals “will materially improve the way the FCC does business and reaches decisions,” said Free State Foundation President Randolph May, who plans to testify at Wednesday’s hearing. “I am going to suggest another reform or two that should be adopted as well that would help ensure that the FCC’s decision-making process reflects today’s competitive marketplace realities."

Sunshine and Shot Clocks

One of the draft bill’s biggest changes revises sunshine rules to allow three or more commissioners to meet privately. Such a meeting would be lawful if commissioners from both parties and an attorney from the Office of General Counsel are present. No votes could take place, and participants would have to work for the FCC or be a member of a federal-state joint board. The rule also would apply to meetings of federal-state joint boards. After meeting, the FCC would have to disclose on its website who attended and what they discussed.

The draft requires the FCC to justify new regulations that might burden industry or consumers. In a rule, the FCC would have to identify market failure or consumer harm, perform a cost-benefit analysis and set up a procedure to periodically review the rule. Along similar lines, the draft limits FCC conditions on transactions to requirements that are “narrowly tailored to remedy a harm that arises as a direct result of the specific” transaction under review. The FCC also could only apply a condition that it could also adopt separately under its rulemaking authority. The FCC could not consider a voluntary commitment unless it followed the same rules.

The FCC would have to issue a notice of inquiry before starting any rulemaking, and could not cite an NOI more than three years old. The notice of proposed rulemaking would have to contain specific text of the proposed rule and allow 30 days for comments and an extra 30 days for reply comments. The FCC would have to issue a final rule within three years of releasing the NPRM. The draft also would require the FCC to establish shot clocks for any order, decision, report or action on any filing seeking commission action. The FCC would have to set up and follow a release schedule for reports, and release orders within seven days of adoption. And the agency would have to report to Congress whenever it missed deadlines. Twice a year, the FCC would have to send Congress a “scorecard” about progress meeting shot clocks.

The draft language would enable a commission majority not including the chairman to add items to the FCC agenda, provided a member from each party signed on. The FCC would have to establish internal procedures to ensure commissioners have sufficient time to review pending orders and would have to publish draft orders before open meetings. The agency would have to seek comment on reports and set up procedures to give the public time to review ex parte filings on which the FCC plans to rely. And the FCC would have to publish a list of draft items under consideration by commissioners. Every two years, the FCC would have to send Congress a report on the state of the communications market.

Testifying at Wednesday’s hearing are: May, Ramsay, Broadband for America Co-Chair John Sununu, Frontier Chief Legal Officer Kathleen Abernathy, Consumer Federation of America Research Director Mark Cooper and Ronald Levin, a professor at the Washington University School of Law. FCC commissioners testified about process reform at the subcommittee’s hearing last month (CD May 16 p1). Wednesday’s hearing is at 10:30 a.m. in Room 2123, Rayburn House Office Building.