House FCC Process Hearing Looks to Improve Efficiency, Spending, and Transparency

Two new amendments to the Communications Act of 1934 were the focus of this morning's hearing, “Improving FCC Process,” in the House Communications and Technology Subcommittee. Known as the FCC Process Reform Act of 2013 and the FCC Consolidated Reporting Act of 2013 (H.R. 3309 and 3310, respectively, both of which passed the House last year), together the two bills seek to streamline the FCC rulemaking process, as well as to allow better congressional oversight, greater transparency and accountability, and increased public input. 

 

Digital Liberty wholeheartedly supports these two bills and recently sent out a letter encouraging others to support FCC process reform as well. Read the letter here.

 

The hearing featured six witnesses: Stuart M. Benjamin, Douglas B. Maggs Chair in Law and Associate Dean for Research at Duke Law; Larry Downes, Internet industry analyst and author; Robert M. McDowell, Former FCC Commissioner and Visiting Fellow at the Hudson Institute; Randolph J. May, President of the Free State Foundation; Richard J. Pierce, Jr., Lyle T. Alverson Professor of Law at the George Washington University Law School; and James Bradford Ramsay, General Counsel of the National Association of Regulatory Utility Commissioners. A majority of the witnesses, including former FCC Commissioner McDowell and others previously associated with the FCC, enthusiastically supported the new process reform. 

 

The telecom industry is one of the few sectors of the economy that is still going strong after the recent recession. Wireline, wireless, and cable providers invested $66 billion in 2010 and over half a trillion dollars in the past 8 years, and demand for these services has skyrocketed. However, the FCC is currently using, as Larry Downes put it in his testimony, “a 19th century toolkit” to tackle 21st century problems. This modern, cost-effective, and efficient legislation will allow the industry to continue producing jobs, investment, and innovation in this ever-changing marketplace. 

 

Similar reform has been asked for by President Obama’s executive order and his Jobs Council, calling for cost-benefit analysis before adopting major regulations, as well as beginning outreach earlier and being more responsive to public opinion. 

 

With the FCC Process Reform Act in particular, the FCC can improve the telecom marketplace by ensuring that money is well spent. In order to do this, the Act requires the FCC to complete a thorough analysis of the marketplace and recent technology before making a ruling. For economically significant rulings costing $100 million or more, the FCC must identify the specific problem that the spending will solve and prove that this problem cannot be solved on its own through market forces and/or new technology.

 

This mandatory analysis also includes measures to ensure that FCC rulings remain up to date and are issued in a timely manner. Shot clocks set, codified, and made public by the FCC itself must be put in place for every proceeding to ensure efficiency. Both witnesses Randolph May and the Honorable Robert McDowell suggested adding a provision that would cause laws to sunset every 5 or so years, forcing reevaluation to ensure that the FCC remains up to date for years to come. Finally, Notices of Proposed Rulemaking must be submitted within three years of Notices of Proposed Inquiry, and these documents must be made public and given 30 days to receive comments and replies (similar to the recent layover requirement instituted by the House Leadership). 

 

This involves another significant part of the FCC Process Reform Act: transparency. Chairman Walden even opened the hearing by saying that the FCC should do what we ask of most grade-schoolers: “show your work.” There are several new requirements here, including a schedule for the release of all reports, a biannual scorecard to report progress towards reaching shot clocks, and publishing specified documents in the Federal Register no longer than 45 days after their release. Overall, the FCC must take greater steps to inform the public of its actions and proposals, including its performance in meeting FOIA standards.

 

To improve negotiations and accountability, drafts of items to be issued on delegated authority must be given to the commissioners in advance. Two commissioners can require the entire commission to take action. In general negotiations, bipartisanship is encouraged by allowing three or more commissioners to meet on a bipartisan basis in private, altering the Sunshine provisions from the Administrative Procedure Act of 1946.

 

The public can take advantage of the new information through a procedure that allows everyone to comment on reports and evaluate late ex parte filings before FCC commissioners use them in decision-making. The commissioners and FCC staffers would be able to easily access consumers’ opinions through the bill’s proposed consumer complaint database.

 

On top of all this, the bill restricts the FCC from abusing its powers and convincing parties to "voluntarily" accept extraneous concessions like net neutrality obligations as a condition of receiving approval for mergers. It points out that the FCC has neither the policy justification nor the legal authority to impose such conditions, and that these concessions often hinder economic growth and impose unnecessary fees on businesses. 

 

The second bill, the FCC Consolidated Reporting Act, is less extensive and serves mostly to improve congressional oversight in FCC proceedings. It requires the FCC to submit a communications marketplace report to Congress every two years, synchronized with the congressional cycle. These reports will analyze marketplace competition, recent advancement of telecom capability, and regulatory barriers, as well as consolidate a number of preexisting reports. 12 unnecessary reports, including one on telegraphs, will be eliminated, saving the FCC time and resources. The consolidated report will highlight issues the FCC must address within the next two years and progress made since the last report, making congressional oversight easier and more effective. 

 

Additionally, the Consolidated Reporting Act will require the FCC to compile a list of areas that are not serviced by any advanced capability telecom provider. With the constant increase in and advancement of wireless, it is imperative that all Americans at least have the option of accessing these modern services. This list may help to initiate the spread of these services to the areas that need it most. 

 

In addition to Digital Liberty, the FCC reform bills have received overwhelming support from leading government organizations and telecom companies such as The U.S. Telecom Association; The National Cable and Telecommunications Association; CTIA—The Wireless Association; AT&T; Verizon; and The National Association of Broadcasters. 

 

Chairman Genachowski has made some improvements regarding this issue; however, more must be done and this legislation is needed to ensure that the FCC functions as well as possible from commission to commission.