Hearing Recap: Federal Communications Commission Process Reform

On May 13, 2011, the House Commerce Committee's Subcommittee on Communications and Technology held a hearing on reforming the Federal Communications Commission.

A Republican staff briefing memo states: "There is growing consensus that Federal Communications Commission (FCC) processes need reforming. Under both Democrat and Republican chairmen, the FCC has fallen into practices that weaken decision-making and jeopardize public confidence. While Chairman Genachowski and his predecessors have taken steps to improve process, the time may have come to do so statutorily to ensure consistency from issue to issue, and commission to commission."

In his opening remarks, Subcommittee Chairman Greg Walden (R-OR) offered seven possible reforms:

1. The FCC could be required to start new rulemaking proceedings with a notice of inquiry rather than a notice of proposed rulemaking. An NPRM presumes regulation is needed. The FCC should first examine the state of the relevant markets, services, and technologies. Even when regulation may be appropriate, the FCC is unlikely to craft as useful a proposal without first gathering preliminary information.
2. The FCC does not always publish the text of proposed rules for public comment before adopting final rules. Providing specific text will allow for more constructive input and a better end product. Crafting proposed rules should not be difficult if there is a genuine need and the FCC has started with an NOI.
3. Finite timelines for resolution of matters would be helpful. Parties and the public should have some sense of when resolution will come.
4. The FCC now makes information available about which draft items are circulating before the commissioners. The FCC could be required to provide additional information, such as a list of all unfinished items at the commission, the date the items were initiated, their current status, and expected date of completion.
5. A bipartisan majority of commissioners other than the chairman could be allowed to initiate items to prevent a chairman from stopping consensus items. FCC Commissioners Michael Copps and Robert McDowell support this proposal; Chairman Genachowski and Commissioner Mignon Clyburn say it is unnecessary.
6. The President’s Memorandum for the Heads of Executive Departments and Agencies, “Regulatory Flexibility, Small Business, and Job Creation” requires executive agencies to conduct cost-benefit analyses before adopting regulations. The memorandum does not apply, however, to independent agencies like the FCC. We could remedy that by requiring the FCC to identify actual consumer harm and conduct economic, market and cost-benefit analyses before adopting any regulation.
7. The FCC’s transaction review standards are vague and susceptible to abuse. Parties with a pending transaction should not feel pressure to accept “voluntary” conditions on the deal or to curtail their advocacy in other proceedings. The FCC could be prohibited from adopting any conditions unless they are narrowly tailored to any transaction-specific harm. To prevent the FCC from using transactions to commence industry-wide changes it could not otherwise adopt, the FCC could be required to show statutory authority for the conditions outside the transaction review provisions of the Act.

Subcommittee Ranking Member Anna Eshoo (D-CA) said that there was room for improvement at the FCC, but cautioned against 'reforms' that would "diminish the Commission's ability to protect the public interest and preserve competition in the telecommunications marketplace."

FCC Chairman Julius Genachowski noted that over the past two years, 95 percent of FCC actions have been bipartisan. He outlined the five goals of internal FCC reform efforts: 1) Improving the FCC rulemaking process, 2) relieving burdens on industry and other stakeholders, 3) improving engagement with outside stakeholders, 4) a focus on ensuring efficiency, accountability and fiscal responsibility, and 5) improvements to FCC internal processes and operations.

FCC Commissioner Robert McDowell offered his ideas on possible reform: 1) a new Congressional approach focused on preventing concentrations and abuses of market power that result in consumer harm, 2) modernizing the Sunshine in Government Act to increase FCC efficiency and spirit of collaboration while preserving openness and transparency, 3) adding an evidentiary presumption during periodic regulatory reviews that would enhance the likelihood of the FCC reaching a deregulatory decision, 4) biennial rather than annual reports on many subjects, and 5) a full and public operational, financial and ethics audit of everything connected to the FCC, including the Universal Service Administrative Company.

Commissioner Michael Copps spoke out again in favor of modifying the Closed Meeting Rule that prohibits more than two Commissioners from ever talking with one another outside of a public meeting. He also mentioned recent improvements the FCC's ex parte rules and many efforts to improvement engagement with citizens on matters before the FCC.

Noting the complexity of matters before the Commission, Commissioner Clyburn noted efforts to reducing the FCC's backlog of applications, appeals, and complaints. She specifically asked that any FCC process reform address improving Joint Board and Joint Conference process.

Commissioner Meredith Baker did not testify at the hearing. She is resigning from the FCC effective June 3 to become a lobbyist for Comcast/NBCUniversal -- a merger which she voted to approve just four months ago. House Committee on Oversight and Government Reform might take up the matter.

Rep Ed Markey, a former chair of the Subcommittee, used the hearing to express his strong opposition to the proposed AT&T-T Mobile merger. "It would be a historic mistake to approve the AT&T-Mobile merger," he said flatly. He said it would be a return to the early 1990 duopoly days when the companies argued that cell phones were a business-to-business service and smaller handsets were not in the offing. Rep Markey held up a 1993-era cell phone "brick" and the Blackberry that followed only four years later--after the cell phone market was opened up to more competition--as illustration of the days he did not want to return to. "I've seen the movie before, I know how it ends," said Rep Markey.