Path for FCC in the OIRA Review Process Seems Unclear and 'Cumbersome'

Under the new OIRA process, independent agency actions such as significant draft rules and NPRMs go through reviews by both OIRA and other agencies, including executive branch ones. OIRA would review such issues as how well the economic benefits of the proposed action were quantified, while other agencies and White House offices might have comments on the substance of the policy and its legal merits, as well as political feedback as to how well it fits into the president's agenda, former OIRA officials said. No substantive changes can be made to an NPRM or final rule after the OIRA review is done, according to OMB guidance. It's unclear how the process works when commissioners must vote on and adopt draft items and sometimes make editorial changes before adoption. FCC Chairman Brendan Carr's office and OMB didn't comment, nor did the FTC, which also now falls under the OIRA umbrella.

By referring to "so-called 'independent regulatory agencies'" in his executive order, Trump made clear how he views his authority over them, said Clay Calvert, a nonresident senior fellow in technology policy studies at the American Enterprise Institute. He said the back-and-forth rulings about net neutrality by Democratic- and Republican-majority FCCs suggest that the agencies aren't independent. The Trump order is designed to rein in agency leaders whose views may not fully align with the president's, Calvert said, but since Trump and Carr are already so closely aligned, the OIRA process will be mostly procedural.

Similarly, Free State Foundation President Randolph May said via email that it's "unrealistic to think that the FCC is going to propose a rule that it knows is inconsistent with the Trump administration agenda," whether OIRA is involved in the rulemaking or not. OIRA's professional staff have "a lot of technical expertise in reviewing the costs and benefits of rules, and I expect the FCC’s draft rules can benefit from this additional cost-benefit analysis and review." He said improvements to draft rules as a result of OIRA’s input could mean a promulgated rule has a better chance of surviving judicial review.

In a statement, Democratic Commissioner Anna Gomez said, "Congress created the FCC to operate independently -- free from interference by the White House. If we allow political pressure or the whims of any administration to shape our decisions, we undermine the very purpose of this agency and the rule of law.”

The FCC chair has historically maintained relationships with the executive branch and consulted with it, particularly NTIA, so the FCC has rarely acted out of sync with what the White House wanted, said Andrew Schwartzman, Benton Institute for Broadband & Society's senior counselor. The Trump OIRA review indicates that the FCC chair must heed executive branch instructions, he added, but much will depend on how the legal wrangling over the U.S. Supreme Court's Humphrey's Executor decision plays out, especially in light of Trump's unprecedented firing of Democratic FTC commissioners in March (see 2503190057). The 1935 SCOTUS decision limited the president's ability to fire FTC commissioners without cause and has huge implications for the FCC and other independent agencies.

Subjecting independent agencies' rulemaking processes to White House review means OIRA will be "another battleground for well-funded companies with sufficient lobbying power to go to ... if they don't get the result they want at the FCC," Public Knowledge Senior Vice President Harold Feld said in an email. "It doesn't matter if the president genuinely cares or not. You just have to convince folks at OIRA, who have no familiarity with the subject matter and no accountability for the decision, to side with you over the chairman."

The OIRA review system will likely be "cumbersome" in the back-and-forth between OIRA and the FCC, said Sharon Block, who served as acting OIRA administrator in the Biden administration. Making the relatively informal OIRA process fit with the more structured workings of the independent agencies will be another challenge, added Block, who's now a Harvard law professor of practice. Independent regulators were structured with a certain model in mind: Neither Congress nor the Clinton-era creators of Executive Order 12866, which mandated a cost-benefit OIRA review, anticipated the new OIRA role, Block said.

April's OMB guidance, citing that Clinton-era executive order, spells out such issues as how agencies coordinate with OIRA, how to conduct a cost-benefit analysis of a proposed action, how to submit a regulatory action to OIRA for review, and the nature of the new review process.

Beyond the FCC and FTC, agencies also now subject to the OIRA review include the SEC, the Consumer Product Safety Commission, the National Labor Relations Board and the Bureau of Consumer Financial Protection, according to the guidance. It says agencies must designate a regulatory policy officer -- typically a political appointee -- who will report to the agency head and "be involved at each stage of the regulatory process to foster the development of effective, innovative, and least burdensome regulations." The FCC and other agencies also must designate a "regulatory second" -- a senior agency official, usually a career employee, who will lead the submission of regulatory work that the agency promulgates and the agency's review of regulatory actions from other agencies.

The OIRA process will certainly slow the FCC, Feld said. While an FCC chair typically is in sync with the president's priorities, "that is different from getting approval for every decision." He said an important aspect of the FCC has been the ability of the chair to compromise with commissioners and include questions in NPRMs or make modest changes to rules to get bipartisan votes. "Carr has, so far at least, shown interest in maintaining cordial relations with his Democratic colleagues where possible (although of course, this is before he gets a Republican majority)." OIRA review may make this more difficult, Feld said: For example, there could be problems when Carr negotiates an NPRM or order with a commissioner and then OIRA overrules him.

Sally Katzen, OIRA administrator during the Clinton administration, told us it was unusual before to reverse executive agency decisions due to the OIRA review process. It was also rare to have issues reach the level of the president, she said. The escalation step in the OIRA review process -- which sends disagreements with the regulatory agency up to the president -- wouldn’t happen with a truly independent agency, Katzen said.

The OIRA review process is unlikely to slow independent agencies significantly, said Paul Ray, OIRA administrator for part of Trump's first term. In most cases, the major delay built into rulemaking is the agency’s work drafting the NPRM and replying to comments in the draft order, he said. While the OIRA review can add weeks or even months, the benefit of interagency coordination makes up for it, he added.