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'Banana Republic'

FCC ALJ Process Is a 'Black Hole,' Needs to Be Fixed, O'Rielly Says

The administrative law judge process at the FCC is “completely broken” and “something you would find in a banana republic,” not the U.S., former FCC Commissioner Mike O’Rielly said during a Georgetown Center for Business and Public Policy webinar Wednesday. O’Rielly noted review by an ALJ was recently “activated” as part of the review of the Standard/Tegna deal (see 2303100082.)

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Use of an ALJ “effectively serves to kill a transaction,” O’Rielly said. “No one has successfully escaped” from the ALJ process “to put a merger back in place and actually get approval,” O’Rielly said: “It’s a black hole, and you never can escape it. … The parties are generally forced to withdraw their transaction.” Standard/Tegna applicants went through a yearlong consideration process and are left without “a decision they could potentially challenge," he said, and the process “needs to be fixed.”

If he were still at the commission -- as a Republican he would now be in the minority -- he would be “pushing the really big issues,” O’Rielly said, citing “things like USF reform, things like spectrum pipeline issues.” There’s a tendency to focus “on all the hot issues” like AI, but work remains on issues more clearly within the FCC’s jurisdiction, he said. Expiration of the FCC’s auction authority was “shameful,” and “a mistake,” he said: “There’s no other better way to assign licensed spectrum.”

There are “a lot of bands” that may be suitable for a spectrum pipeline, O’Rielly said, mentioning the lower 3 GHz band and 12 and 13 GHz. O’Rielly was asked about a New Street report this week suggesting a decision on 12 GHz is unlikely soon by the FCC (see 2303130063). “I like to believe that’s not the case because it’s 500 MHz of prime spectrum for whatever purpose we can figure out,” he said: “We don’t have a lot of other bands that aren’t encumbered by federal agencies.”

O’Rielly said he’s a “fiscal conservative” but supports the FCC’s $14.2 billion affordable connectivity program. O’Rielly laid out a conservative case for the ACP in an opinion piece last month. “Broadband availability is more than just access; you also have to deal with affordability,” he said Wednesday.

Many American families” can’t afford broadband, O’Rielly said. A program like ACP had bipartisan support in Congress and became part of the infrastructure bill, “which wasn’t exactly bipartisanship at its best, but we got to a program that actually does some pretty good things,” he said. ACP targets “those consumers who actually are in need” rather than funding broadband providers and hoping that reduces costs, he said. ACP is also “technology neutral,” he noted.

ACP will soon hit 20 million subscribers and the U.S. needs “some type of mechanism to deal with affordability,” O’Rielly said: “It also reduces the pressure to regulate rates.”

O’Rielly predicted the FCC’s USF program may survive challenges in different federal circuits mostly unscathed. The 5th U.S. Circuit Court of Appeals heard the first of the cases late last year (see 2212060070). “A lot of the language” in the Telecom Act is “pretty broad” and “I wouldn’t be surprised to see the FCC do fairly well” in court, he said.

O’Rielly, who worked on the Telecom Act as a Senate aide, noted there are issues with the FCC’s work on USF. The Universal Service Administrative Co. is “a machination that was never contemplated by Capitol Hill,” he said: “You’ve got lots of waste, fraud and abuse in a number of the programs. You’ve got automatic funding increases.”