For some time, there have been efforts afoot to make changes at the Federal Communications Commission to restore the public’s confidence that it will meet its legal obligation to promote the “public interest, convenience and necessity.” (See, for example, Reforming the FCC). The FCC normally has five commissioner, but currently only has four and could have as few as three after Congress goes into recess at the end of the year. So one might think this is a wonderful time to consider reform.
Two Nominees for Open FCC Seats
On Halloween 2011, President Barack Obama unmasked his nominees to be commissioners at the FCC -- Jessica Rosenworcel and Ajit Pai. The announcement actually ended one of the worst-kept secrets in Washington as there was little effort to disguise that Rosenworcel and Pai were the favored choices of Senate leaders. (Rosenworcel is Rockefeller's choice, while Pai is said to be the pick of Senate Minority Leader Mitch McConnell (R-KY). The President generally defers to the choices of congressional leaders for both Republican and Democratic picks.)
Both nominees have long histories working on telecom policy issues, including previous stints as lawyers at the FCC.
- Rosenworcel is the Senior Communications Counsel for the Senate Commerce Committee, working for Chairman Jay Rockefeller IV (D-WV) since 2009, and previously for Sen Daniel Inouye (D-Hawaii) from 2007 to 2008. The committee’s jurisdiction includes communications, interstate commerce, regulation of interstate common carriers, and science, engineering, and technology research and development and policy.
- Before joining the Commerce Committee, she worked at the Federal Communications Commission from 1999 to 2007, serving as Legal Advisor and then Senior Legal Advisor to Commissioner Michael Copps (2003-2007). Rosenworcel’s portfolio in Commissioner Copps’ office included competition, Universal Service Fund reform, communications and media.
- Rosenworcel was also Legal Counsel to the FCC’s Bureau Chief of the Wireline Competition Bureau (2002-2003), and served as an Attorney-Advisor in the Policy Division of the Common Carrier Bureau (1999-2002). From 1997 to 1999, Rosenworcel was a communications associate at a then-newly-opened office of Drinker Biddle and Reath.
- Pai is a Partner in the Litigation Department of Jenner & Block LLP. Immediately prior to joining Jenner & Block, Pai worked in the Office of the General Counsel at the Federal Communications Commission, where he served, starting in 2007, as Deputy General Counsel, Associate General Counsel, and Special Advisor to the General Counsel. As Deputy General Counsel, Pai had supervisory responsibility for over 40 lawyers in the Administrative Law Division, handling a wide variety of regulatory and transactional matters involving the cable, Internet, wireless, media, satellite, and public safety industries, among others.
- Between 2005 and 2007, Pai served as Chief Counsel to the Senate Judiciary Committee’s Subcommittee on the Constitution, Civil Rights, and Property Rights and as Senior Counsel at the Office of Legal Policy at the Department of Justice. He was lead counsel on Supreme Court nominations and issues regarding national security, communications, Internet regulation, antitrust, and constitutional law.
- Pai also served, from 2003 to 2004, as Deputy Chief Counsel to the Senate Judiciary Committee’s Subcommittee on Administrative Oversight and the Courts. He was lead counsel on national security, constitutional, communications, antitrust, and other issues.
- Pai was Associate General Counsel at Verizon Communications from 2001 to 2003. He worked on a broad range of competition-related matters, including trial and appellate litigation, antitrust and regulatory issues, business counseling, and legislative advocacy.
- Pai began his career as a law clerk to Judge Martin L.C. Feldman of the U.S. District Court for the Eastern District of Louisiana, and then as an Honors Program trial attorney in the Telecommunications Task Force at the U.S. Department of Justice’s Antitrust Division.
On November 1, President Obama officially sent the nominations to the Senate for confirmation. Harold Feld, the Legal Director at Public Knowledge, wrote an informative piece on what to expect in the nomination process. He notes:
confirmation hearings like this (as opposed to hearings on more controversial nominees or more important offices) tend to be low-drama and poorly-attended affairs. The key thing that happens is that members with particular issues or concerns get to go on record with their issues and can try to press the nominees to commit to something, or at least get a position on record. The nominees, of course, know how the game is played and will state very general answers that don’t commit to anything but try to give some basic support to their overall groups or constituencies. The more technical and wonky the question, the more likely we are to see the nominees answer more substantively in a general way about their priorities and philosophy. It will also be interesting to see what Senators care about specific issues. Odds are good there will be a bunch of spectrum questions. The real question is whether anyone will ask about broadcast or other “old media” issues. These issues are likely to get even less attention than they do now once Copps leaves. So it will be interesting to see whether anyone on the Committee exhorts the nominees to focus on these issues as well as the telecom stuff or if things like media ownership have dropped below the Congressional priority threshold.
The early consensus was that the nominations would sail through the Senate. Chairman Rockefeller, Rosenworcel’s current boss, said on Nov 1 that he hopes to move forward with a confirmation hearing within a week’s time. Pai was previously floated as a potential nominee in 2009 and reportedly had the support of Senate Minority Leader McConnell. Given the support of Senate leadership for both nominees, the process was expected to go smoothly with The Hill predicting both could be confirmed by the end of November. Industry groups, legislators and fellow regulators congratulated Rosenworcel and Pai on their nominations. Everyone seemed to be on board.
But Feld’s analysis offered some warning: “While it is likely that the nominations will move quickly through the Committee, getting fast confirmation by the full Senate is a lot more uncertain. Even at the best of times, juggling everything to get floor time for a vote can be problematic. With the Senate likely to be consumed with SuperCommittee fall out (whether or not they reach an agreement) and other end of the year nonsense, it will be a real challenge for Senate Majority leader Harry Reid to squeeze it in.”
And, of course, when it comes to consensus building, these are not the “best of times.” In a sharply divided Senate, nominations can often turn into bargaining chips. And that’s what appears to be happening this time. By November 3, Sen. Chuck Grassley (R-Iowa) had announced that he would place a hold on the nominations, a hold that will take effect once the nominations reach the Senate floor. "I will object to proceeding to the nomination because the FCC continues to stonewall a document request I submitted to the FCC over six months ago on April 27, 2011, regarding their actions related to LightSquared and Harbinger Capital," Sen Grassley said. We’ll now wait and see how the FCC and the Administration respond to Sen Grassley.
FCC Reform Bills Unveiled
Two new commissioners may not be the only major changes coming to the FCC. On November 2, Rep. Greg Walden (R-OR) -- chairman of the House Commerce Committee’s Subcommittee on Communications and Technology -- and Sen Dean Heller (R-NV) unveiled two bills (HR 3309 and HR 3310) aimed, they said, at improving the way the FCC operates by improving transparency, predictability, and consistency.
Here’s how the legislators sum up the bills:
Protecting Jobs by Ensuring Regulatory Benefits Outweigh Costs
- Require the FCC to survey the state of the marketplace through a Notice of Inquiry before initiating new rulemakings to ensure the FCC has an up-to-date understanding of the rapidly evolving and job-creating telecommunications marketplace. Require the FCC to identify a market failure, consumer harm, or regulatory barrier to investment before adopting economically significant rules. After identifying such an issue, the FCC must demonstrate that the benefits of regulation outweigh the costs while taking into account the need for regulation to impose the least burden on society.
- Require the FCC to establish performance measures for all program activities so that when the FCC spends hundreds of millions of federal or consumer dollars, Congress and the public have a straightforward means of seeing what bang we’re getting for our buck.
- Apply to the FCC, an independent agency, the regulatory reform principles that President Obama endorsed in his January 2011 Executive Order.
- Prevent regulatory overreach by requiring any conditions imposed on transactions to be within the FCC’s existing authority and be tailored to transaction-specific harms.
Promoting Transparency, Fairness, and Efficiency in Commission Operations
- Enhance consistency and transparency in the FCC’s operations by requiring the FCC to establish and disclose its own internal procedures for:
- adequate review and deliberation regarding pending orders,
- publication of orders before open meetings,
- initiation of items by bipartisan majorities, and
- minimum public review periods for statistical reports and ex parte communications.
- Require the FCC to establish its own “shot clocks” so that parties know how quickly they can expect action in certain proceedings and provide a schedule for when reports would be released.
- Empower the FCC to operate more efficiently through reform of the “sunshine” rules, allowing a bipartisan majority of Commissioners to meet for collaborative discussions subject to transparency safeguards.
Simplifying Reporting Requirements
- Consolidate eight, separate congressionally mandated reports on the communications industry into a single comprehensive report with a focus on intermodal competition, deploying communications capabilities to unserved communities, and eliminating regulatory barriers.
Public interest advocate Free Press noted that the legislation would severely limit the FCC’s authority over transaction reviews, and would give industry lobbyists and trade associations new ways to dominate comment cycles and drown out the voices of everyday citizens. It would eliminate reporting requirements the FCC currently has in place to assess everything from how cable prices affect consumers to how broadcasters meet the public interest obligations that come with their use of public airwaves. It would also gut a 2008 law that passed with overwhelming bipartisan support and requires the FCC to conduct detailed comparisons between the U.S. and other broadband markets across the globe.
"This so-called "reform" bill is meretricious mischief which arrives a few days too late for Halloween," said Andrew Schwartzman of Media Access Project. "Under the guise of streamlining the regulatory process, it creates procedural obstacles which favor incumbent cable and phone companies and stifle innovators. It would mire the FCC with needless bureaucratic nonsense and keep it from doing its job."
Should Reform Include Lobbying?
Interestingly, absent from the reform proposal is a requirement that FCC commissioners and staff negotiating for new employment make those intentions public. Ajit Pai has been nominated to fill the FCC seat vacated by former-Commissioner Meredith Attwell Baker. She departed the FCC in June 2011 to become Senior Vice President of Government Affairs, NBCUniversal. Baker’s move to Comcast came just four months after she voted to approve Comcast’s $13.75 billion deal to acquire control of NBC Universal from General Electric. Baker objected to FCC attempts to impose conditions on Comcast's purchase of NBC Universal and argued that the "complex and significant transaction" could "bring exciting benefits to consumers that outweigh potential harms."
Though Baker was appointed to what is considered an independent regulatory agency, she signed the Administration’s ethics pledge upon taking office in July 2009. Under the pledge, she will not be allowed to lobby anyone at the FCC for two years after her departure. In addition, Baker will not be able to lobby other political appointees at the FCC, including other commissioners, for the remainder of the Obama Administration, including a second term if President Obama is re-elected. She faces a lifetime ban on lobbying any executive branch agency, including the FCC, on the agreement that Comcast made with the FCC as a condition of its approval of the merger with NBC Universal. Baker was allowed to lobby members of Congress immediately upon beginning her new job.
Back in May, James Downie wrote in The New Republic: “Baker’s announcement, however, was greeted with nary a shrug from the FCC and the congressmen tasked with its oversight. Her departure merited only a cursory statement from commission chair Julius Genachowski. Worse, when the FCC commissioners appeared before the House Communications and Technology subcommittee ... to discuss 'FCC Process Reform,' subcommittee chair Greg Walden merely noted Baker’s absence and not a single representative asked a question related to the propriety of her recent move. One might be forgiven for asking: Why? The simple answer is that, sadly, what Baker did is not all that unusual. Baker is far from the first commissioner or staffer to leave the FCC and move right to the industry he or she just finished regulating.”
Only House Oversight Chairman Darrell Issa (R-CA) seemed interested in the departure at the time. He wrote FCC Chairman Julius Genachowski asking which regulations apply to Baker's departure; what actions did Baker take to ensure the rules were followed; on what date did Baker notify the FCC's general counsel's office about her prospective employment; when did she recuse herself from FCC proceedings; and from which matters is she currently recused?
On May 19, 2011, Public Knowledge asked the FCC to require commissioners and staff negotiating for new employment to make those intentions public. PK noted the lack of transparency in post-FCC employment. The letter also noted that officials recusing themselves from dockets or issues because of employment negotiations had in the past been required to file a publicly available letter with the recusal information. That requirement has lapsed and Public Knowledge said FCC Chairman Julius Genachowski should "immediately reinstitute this requirement." On October 28, the FCC declined to make public recusal statements from Commission employees.
Reform Remain on Agenda Next Week
On November 7, Chairman Genachowski plans to make an announcement at Georgetown University on “The Plan for Retrospective Review of FCC Rules.” Chairman Genachowski will provide highlights of the FCC’s plan retrospective review of regulatory practices in response to the Executive Order for independent regulatory agencies. The President actually issued two executive orders, the first saying government agencies needed to submit regulatory review plans to the White House, a second to clarify that although independent agencies like the FCC and FTC were not subject to that order, they were encouraged, "to the extent permitted by law," to comply with the first order, at last to the extent of publishing a plan of action for reviewing their regulations according to a qualitative and quantitative cost-benefit analysis of their impact on jobs and the economy.
The Executive order calls for those plans by Nov 8, 2011 and Chairman Genachowski has been saying the FCC's plan would be released "soon" since July.
For more news on the FCC's plan, tune into Headlines next week