Republican Control of the Senate Expected to Mean More, Deeper Oversight of FCC

Four years ago, then-FCC Chairman Julius Genachowski faced a new battery of questions after Republicans gained a majority in the House, though the Senate remained under the Democrats (see 1011040114). But Genachowski on the whole fared better than Kevin Martin, who spent much of his last two years as chairman dealing with a House Commerce Committee investigation after Democrats retook the House in the 2006 election (see 0611090132). Industry lawyers notes that when the same party controls both chambers congressional staffers can coordinate on hearings and the questions they ask, drilling down deeper on key issues.

Four years ago, there were also many questions on the future of net neutrality in light of the congressional shakeup. Those questions were answered the next month when the FCC approved the first version of net neutrality rules 3-2 over strong objections from the two Republican members of the commission at the time (see 1012220089).

Industry officials observed that, unique among FCC chairmen, Wheeler was a longtime lobbyist who knows especially well how to work Capitol Hill. Those skills will come into play more than ever, these officials said. Wheeler “is better equipped than his predecessors” but “shouldn’t underestimate the difficulty he is going to have,” said a wireless industry lawyer and FCC veteran. The FCC staffers who will be detailed to respond to questions from the Hill are the same staffers responsible for developing agency policy, industry officials noted.

Sen. John Thune, R-S.D., is widely expected to become chairman of the Commerce Committee, taking over from Jay Rockefeller, D-W.Va., who did make FCC oversight hearings a priority for the committee (see 1411050043). Sen. Mitch McConnell, R-Ky., minority leader, is expected to be the next Senate majority leader after cruising to victory Tuesday.

FCC Under Republicans

Past FCCs have been productive when both chambers were Republican controlled, recalled insiders from those times.

Telecom lawyer John Nakahata of Harris Wiltshire had to deal with a Republican-controlled Congress as chief of staff to Democratic FCC Chairman William Kennard. “While having both houses of Congress controlled by the opposite party clearly makes a more difficult operating environment for the FCC, the FCC can still move forward with contentious issues,” Nakahata said. “For most of Chairman [Reed] Hundt’s tenure and all of Chairman Kennard’s, the Republicans controlled both the House and the Senate.” During that period, the FCC held the first spectrum auctions, implemented the 1996 Telecom Act, including the creation of the USF, implemented the World Trade Organization Basic Telecommunications Agreement and reviewed “many difficult telecommunications and media transactions,” Nakahata said. “Those years were not short on controversy.”

The change is “going to have a modest, incremental effect,” said Andrew Lipman, a longtime telecom lawyer at Bingham. “I wouldn’t say that it would have a material effect on decision-making or the commission’s priorities or time management. There probably will be somewhat more intrusive questioning and oversight hearings and probably more letters from the Hill." Thune likely will emphasize different issues than Rockefeller, including USF subsidies to rate-of-return carriers, a la carte programming in cable and infrastructure reform, Lipman said.

Hundt said Wheeler alone does not face a challenge -- the gauntlet has also been thrown down for Republicans Ajit Pai and Mike O’Rielly since GOP leaders in Congress are emphasizing they want to get things done. “The clear message to O’Rielly and to Pai is to find items that can compromise on with Tom Wheeler and the Democrats,” he said. “Their House and Senate patrons are clearly telling them to stop opposing everything and figure out where you can compromise.” Hundt said Wheeler has a long history in Washington of working with members on both sides of the aisle.

“Congress has the potential to make a chairman’s life very difficult,” said ex-Republican Commissioner Robert McDowell, now at Wiley Rein. But McDowell doesn’t think the change in the Senate will have a major effect on what Wheeler pushes forward the next two years. “Certainly, Congress can consume his time by calling him up to test before a variety of committees, everything from the Commerce committees, to Judiciary to Budget to Foreign Relations,” he said. “That will not necessarily impair the pursuit of his agenda.” The big question is the extent to which there will be cooperation between the administration as a whole [and the Congress] as there was after the 1994 elections, when Republicans took control of the House and Senate two years into the presidency of Bill Clinton, McDowell said. “No one knows that answer for sure."

Rough Ride Foreseen

“When the opposing party takes control, it typically means a rougher ride for the chairman, especially if a chairman is less willing to moderate and compromise,” said Rick Kaplan, executive vice president at NAB and former top aide to Genachowski. “It will be very interesting to see if Chairman Wheeler will take in stride the additional oversight that will clearly come. Congress can be quite proprietary of the FCC -- it is a creature of Congress, after all -- and it will expect the FCC to be responsive to its direction.”

The Republican takeover means Congress can pass a Telecom Act rewrite that fundamentally “renders” much of what the FCC does as “really extraneous,” said Seton Motley, president of Less Government. There will be more hearings on net neutrality and Title II reclassification, he predicted. Motley said Thune is deeply engaged on telecom issues.

Republicans “can either spend the next Congress shaking their fist at the FCC or they can actually hammer out a compromise that will get either the administration or enough Congressional Democrats on board to override the president's veto,” said Berin Szoka, president of TechFreedom. “Neither McConnell nor Thune seem to have much interest in theatrics, and both have track records of reaching across the aisle to get deals done.”

“Aggressive oversight will be an annoyance, but Chairman Wheeler has demonstrated the ability to take the heat at difficult hearings,” said Georgetown Law Institute for Public Representation Senior Counselor Andrew Schwartzman. President Barack Obama would likely veto any efforts to override the FCC using the Congressional Review Act, he added. The greater threat is from appropriations riders that effectively overrule, or prohibit FCC actions, Schwartzman said. “I suppose the president might be willing to veto an appropriations bill that tried to override a net neutrality decision, but he probably wouldn't be able to veto riders about lesser matters."

There is widespread agreement on issues that need to be addressed, from improving emergency calls to rural call completion to retransmission consent and the high cost of cable, said Public Knowledge Senior Vice President Harold Feld. “There are successful models for this kind of mid-term switch, notably with Reed Hundt and Kevin Martin. Both were nevertheless able to accomplish extremely significant things despite a hostile Congress elected in a wave.” But Feld said working with a Congress under the control of another party is tough. “There are ways a Republican Congress can make things difficult,” he said. “In particular, the likelihood of changes to the law getting tucked into appropriation measures or other ‘must pass’ regulation becomes much more difficult to counter.”

Communications lawyer Scott Harris of Harris Wiltshire said he doesn't expect major changes in how the FCC moves forward as a result of the election. Harris, former chief of the FCC International Bureau, said: “To their credit, Chairman Wheeler and his team have been focused intently on making what they believe is the right policy call on every issue they’ve tackled -- and have paid little attention to the politics of the moment.”

"The election results ought to give pause to Chairman Wheeler,” said Free State Foundation President Randolph May. “The country obviously is in no mood to approve of a federal government agency that seems too eager to regulate in the absence of no demonstrable consumer harm or market failure.”