FCC Staff Actions in Wheeler's Final Days Subject to GOP 'Midnight Regulation' Scrutiny

Other staff actions under Wheeler -- some raising outside criticism -- could also be reviewed, though now-Chairman Pai hasn't specified his course. Some in interviews offered fresh criticism after receiving our compilation of about 30 significant staff actions taken in January before Wheeler departed last week. One such action couldn't be reviewed, an admonishment of T-Mobile over customer privacy. That's because it was quickly pulled back by the FCC, citing unspecified errors (see 1701180074).

Pai said Jan. 11 that Wheeler was spending his last days in office the same way he "spent the last few years -- cutting corners on process, keeping fellow commissioners in the dark, and pursuing partisan, political agendas that only harm investment and innovation" in the market. "This time the midnight regulations come in the form of a Bureau-level report casting doubt on the legality of free data offerings -- offerings that are popular among consumers," Pai said in a statement on the zero rated item: "This report, which I only saw after the FCC released the document, does not reflect the views of the majority of Commissioners. Fortunately, I am confident that this latest regulatory spasm will not have any impact on the Commission’s policymaking or enforcement activities following [the Jan. 20] inauguration." O'Rielly said the report "is a shame, but it will soon be lost to irrelevance" (see 1701110070).

Pai and O'Rielly also hammered a Jan. 4 Media Bureau order denying petitions for the full FCC to reconsider a decision they said "imposed unnecessary reporting requirements" on noncommercial educational TV stations. "The Commission’s ruling no longer enjoys the support of the majority of Commissioners -- nor is there a majority that supports today’s Media Bureau decision -- so it was wrong for the Bureau to bypass Commissioners and reaffirm these reporting requirements unilaterally," they said in a statement on the denial. "Procedurally, it’s just another example showing why the Commission’s use of delegated authority needs to be fixed. The good news is that today’s decision need not be the final word. We encourage public broadcasters to file an application for review so that the newly constituted Commission will have an opportunity to revisit this matter" (see 1701040069). A public broadcaster group said it would seek review (see 1701050069).

The Republicans questioned Jan. 6 Media Bureau orders admonishing Scripps and some other broadcasters (here, here) for violating political advertising disclosure rules. Pai and O'Rielly said they agreed with much of the substance of bureau rule clarifications and believed consensus could have been reached. "Sadly, we were never given that chance and these orders thus will need to be revisited in the new Administration,” they emailed then. “It is disappointing that even in its final days, Commission leadership continues to lean on the crutch of delegated authority while excluding Commissioners from the process” (see 1701090064).

Local number portability administrator Neustar recently asked the FCC to reverse a Jan. 6 staff letter siding with North American Portability Management in a dispute over confidentiality protections in the LNPA transition to iconectiv (see 1701190030 and 1701060065). A Media Bureau approval of five Entercom stations drew criticism from the Media Action Center (see 1701200052). The Republicans haven't commented on those issues.

Scores of Actions

Bureaus and offices issued scores of orders, reports and other items in January. Most appear routine or noncontroversial, but some substantive actions have drawn criticism from observers and stakeholders.

For instance, the Public Safety Bureau issued a Jan. 18 white paper that said broadband ISPs need government oversight to reduce cybersecurity risks (see 1701180082). The paper's "proposed cybersecurity regulation" is "fatally flawed," and the "naked power grab should be rebuffed by policymakers in the new Administration," said Tech Knowledge Director Fred Campbell, a former Wireless Bureau chief, in a blog post Wednesday. AT&T also criticized the report (see 1701250077). In a December C-SPAN appearance, O'Rielly recognized cybersecurity was important but doubted the FCC has a large role to play absent a new congressional mandate.

New video relay service (VRS) interoperability and portability standards adopted by the Consumer and Governmental Affairs Bureau in a Jan. 17 order also came under attack. "The Bureau went far beyond what was necessary and has adopted what providers all told them were unneeded and costly requirements," said Paul Kershisnik, chief marketing officer of Sorenson Communications, the next day. "We will be urging the Commission to review and correct these midnight regulations," he said (see 1701180036). VRS providers also opposed VTCSecure's petition to gain access to a numbering directory for its direct video calling customer-support services for the deaf and hard of hearing; it was granted in a Jan. 18 order by the Wireline and Consumer bureaus (see 1701190038).

Pai and O'Rielly made it clear they plan to review and reverse at least some decisions decided by the previous Democratic majority. At the top of the list is the net neutrality and broadband reclassification order under Title II of the Communications Act, and broadband privacy rules adopted in October pursuant to that authority. The Republicans and Wheeler didn't comment for this story.

Deal OKs

Among the items released since Jan. 1 were approvals of deals worth at least $6 billion.

TechFreedom President Berin Szoka said he believes any item based on Title II broadband authority will either be overturned or mooted. He told us the Republicans' precise course remains to be seen. They could move relatively quickly to reclassify broadband as a Title I information service, removing the Title II authority for net neutrality and broadband privacy rules, and the bureau reports on mobile zero rated offerings and cybersecurity, he said. If they take longer to sort out all the details of broadband reclassification, it's possible they would address more quickly some staff actions individually, he said. There could be other staff actions that could simply be rescinded or revised, he said.

“Obviously, there are going to be some sharp changes in policy," said Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation, who cited zero rating and privacy as the most notable recent actions. "Zero rating is relatively straightforward, Chairman Pai has already made his position clear, and with no real teeth to the bureau’s report, free data can move forward. Unwinding the privacy order is a bit more complicated. Step one should be a stay of the order -- with so many issues at play ... it makes an awful lot of sense for the FCC to put a hold on the privacy rules until the dust settles.”

We gave Szoka, Brake and others a selection of major FCC staff actions in the first three weeks of January. Beyond those already mentioned, the list included: bureau approvals of Windstream buying EarthLink in a $1.8 billion deal (see 1701190048), a Nexstar waiver to buy Media General for more than $4 billion (see 1701110078), two major trans-Pacific undersea cable systems (see 1701130062), and AT&T's spectrum swap with U.S. Cellular (see 1701050083) and 2.3 GHz license relief (see 1701180088); a Wireless Bureau waiver and extension for Progeny aimed at improving wireless 911 location accuracy (see 1701170067); an Enforcement Bureau $100 million consent decree with Straight Path Communications to settle alleged rule violations in the 28 and 39 GHz bands (see 1701120046); a Media Bureau order freezing digital companion channel applications (see 1701190053); reports on video competition (see 1701180020), universal service monitoring (see 1701130075), USF E-rate "progress" (see 1701180086) and state 911 fee diversion (see 1701130065); and plans on digital inclusion to build on Lifeline USF changes (see 1701110079) and U.S. digital infrastructure (here).

“All of these are fairly straightforward actions ... decided on delegated authority," emailed Public Knowledge Senior Vice President Harold Feld. "In my 15 years of practice, I've had my fair share of petitions and recon petitions decided on delegated authority at the Bureau level, even when the Petition is addressed to the full Commission. ... It's typical of the Bureau to wrap up pending old business and push things out at the end of a Chairman's term. Bluntly, you can't expect the FCC to shut down for two months. Anyone can claim that a decision is 'controversial' or 'midnight regulation' or whatever phrase is in vogue. But most of these -- including the Bureau Report on zero rating practices -- hardly moved the needle on anything. (Importantly, the Wireless Bureau did not find that AT&T or Verizon were in violation of anything. The Report noted that there are heightened concerns when you charge rivals and affiliates the same price for a service because the payment by the affiliate is simply moving money from one corporate account to another ... This is a well documented economic concern and hardly a controversial proposition.)”

Szoka said the Republican concern is that delegated authority not be abused. Pai "is going to say this is a new day at the commission, and that means commissioners are going to be making these decisions. It's democratic, and accountable, and good government," Szoka said. He said he couldn't predict all of the staff actions that would be revisited, which include decisions made in previous years, but "it could be a long list."