Waxman Cites ‘Serious Defects’ in FCC Reform Draft Bill

The draft has “serious defects” and would create “undue burden” on the FCC, said Commerce Committee Ranking Member Henry Waxman, D-Calif. Some provisions, like requiring conditions to be specific to a transaction, seem to be about addressing “outcomes with which we don’t agree,” he said. Others “appear to be about process for the sake of process,” requiring the FCC to do things it already does, he said. Communications Subcommittee Ranking Member Anna Eshoo, D-Calif., said the bill might prevent the agency from acting in the public interest, a standard established in the Communications Act.

Republicans supported using FCC reform legislation to rein in what they see as overregulation. Rep. Marsha Blackburn, R-Tenn., supported a controversial provision to require it to show market failure before making rules that might burden industry. “Congress should slam the FCC’s regulatory backdoor shut, lock it and return the keys to the free market,” she said.

Walden sees the draft as a “starting point,” he said. It’s Congress’ responsibility to ensure that the commission conducts its business with “transparency and accountability,” he said. “It’s not asking too much to have the FCC actually codify a set of best practices and operate by them … It’s not my intent to micromanage every decision and this legislation does not do that.” Committee Chairman Fred Upton, R-Mich., said the draft “preserves much of the agency’s flexibility,” and “in most cases, it simply directs the FCC to set its own rules on these matters.”

No member or witness objected to revising sunshine rules to allow three or more commissioners to meet privately, and several Democrats flagged it as one proposal they like. Eshoo -- who has a separate, bipartisan bill (HR-1009) to make the change -- said she supported the Walden proposal’s addition of language applying the provision to federal-state joint board meetings. Consumer Federation of America Research Director Mark Cooper said his only caveat is that full transcripts of those meetings should be released to the public. Former FCC Commissioner Kathleen Abernathy, chief legal officer of Frontier, said the change should be a top priority. “If you do nothing else, if you reform that one rule, many of these other concerns that you have would be immediately addressed,” she said.

Witnesses universally supported issuing proposed rule text before the commission votes, but Eshoo said she thought it shouldn’t be required in all instances. Witnesses also supported directing the FCC to make internal procedures to increase commissioner participation, and requiring the regulator to set shot clocks for orders. Cooper said shot clocks should not start until the FCC has built a complete record. That would avoid situations where a last-minute “data dump” prevents sufficient time for comments, he said.

It would be helpful to give the commission more guidance for making rules than the broadly written public interest standard does, said Free State Foundation President Randolph May. Requiring more economic analysis would lead to better decisions, he said. But Cooper said imposing a harm-based standard, as proposed in the draft, “will undermine the ability of the FCC to protect the consumer and promote the public interest.” It’s also not in the spirit of the Communications Act, he said. Tighter requirements for transaction conditions proposed in the draft would still leave commissioners with some discretion to make conditions to benefit the public, Abernathy said. Voluntary commitments to expand broadband made by Frontier in connection with a recent deal to buy landlines from Verizon could still have been made under the draft’s proposal, she said.

Cost-benefit analyses may be appropriate for some major rules, but would be burdensome if required for every rule, Waxman said. Walden said that President Barack Obama required by executive order administration agencies to do cost-benefit analyses, so independent agencies should do the same. Washington University School of Law Professor Ronald Levin said the executive order is more limited in scope, requiring analyses for only major orders. Cost-benefit analyses are “rigorous” and are expensive for agencies to conduct, he added.

Several Democrats panned a proposal to require notices of inquiry before starting rulemakings. “This could cause serious harm to consumers and public safety” in situations where the FCC must act quickly to address an emergency, said Rep. Mike Doyle, D-Pa. Walden noted the draft includes an exemption for emergencies as defined by the Administrative Procedure Act. The NOI proposal is a good concept but should specify circumstances when it is not required, said Broadband for America Honorary Co-Chair John Sununu, a former Republican senator from New Hampshire. Levin suggested adding a line saying that the FCC can skip the NOI if there is “good cause.” Requiring an NOI could increase the length of proceedings, May said. Congress should focus instead on proving the quality of notices of proposed rulemakings, which are sometimes too vaguely written, he said.

Comcast and Verizon supported the reform effort. “The discussion draft represents an excellent effort to codify regulatory reforms that have been discussed for many years in connection with proceedings of many different Commissions regardless of party or leadership,” said Kyle McSlarrow, president of Comcast/NBCUniversal in Washington, D.C. Verizon believes “many of the proposals … would increase transparency, improve efficiency, and assist in clarifying the role of the federal government in the communications marketplace,” said Senior Vice President Peter Davidson. He urged the Commerce Committee to also look “more broadly at substantive reform of the statutory framework that governs this important market for consumers and the economy.”