Witnesses Divided Over Draft FCC Reform Bills

Academics See Problems With Legislation; Others Say They Are Needed Fixes 7/10/2013 2:05 PM Eastern

The House Communications Subcommittee has posted the testimony of witnesses in Thursday's FCC process reform hearing and it is split over the issue of whether the current proposed bills solve the problem, though not so much on the issue of whether there is some problem to solve. 

A pair of academics on the panel -- Stuart Minor Benjamin of Duke Law School and Richard Pierce from George Washington University Law School -- said they had problems with the current draft legislation. Benjamin said he shared "many of the concerns" that underlie the bills and was particularly sympathetic to streamlining FCC reports. Those bills are ones that would take a host of actions, including imposing shot clocks and putting limits on the FCC's merger review function to only narrowly tailored remedies and a companion bill that would combine FCC reports.

But he also said that he had reservations about the main bill, including that they were targeted at the FCC, which undercuts the Administrative Procedures Act (APA), and that it could create the basis for numerous legal challenges. He also argues that the merger review provisions leave the FCC with "little if any role."

Pierce was even stronger in his critique. "The addition of twelve mandatory steps to the FCC rulemaking process would be a return to the uncertain, confused, ad hoc world of agency decision making that the Congress wisely and unanimously rejected when it enacted the APA in 1946."

He says the new requirements would be extremely burdensome and time consuming.

On the other side were analyst Larry Downes, Free State Foundation president Randolph May and former FCC commissioner Robert McDowell. 

McDowell, a longtime proponent for speeding/improving FCC processes, is currently a visiting fellow at the Hudson Institute. McDowell told Congress that reform begins at home, beginning his testimony by calling for a fundamental rewrite of the communications laws the FCC has to enforce. "Such a comprehensive rewrite has not occurred since 1996, and even that left in place legacy 'stovepipes' that regulate technologies rather than market conditions."

As to that FCC enforcement, he suggests the FCC needs the ability to weed out all unnecessary rules by applying regulatory forbearance to all platforms and industries, not just traditional telecom.

He also joined Randolph May in calling for a cost-benefit, peer-reviewed market analysis of all new rules, which he says is consumer-friendly. "Exercising discretion and regulatory humility while being patient with markets can create a better experience for consumers," said McDowell. He also said that new rules that pass muster should automatically sunset unless they can be justified "from scratch in new proceedings."

May backs both bills and said the reforms are needed "now more than ever." He focused on reforms of the rulemaking process and merger review. Both he said are welcome changes. The former, he said, "simply requires the agency to meet a higher evidentiary burden before adopting or revising regulations. The latter he said would "go a long way toward combating abuse of the transaction review process."

That merger provision's purpose is to address Republican legislator concerns that the FCC is back-door regulating via merger conditions. For example, Comcast is subject to the FCC's Open Internet order whether or not a court throws it out because that is a condition of its NBCU merger.

Analyst Downes said that the draft bills "provide many common-sense, modest, apolitical repairs, imposing needed structure on the Commission's processes."

Testimony of James Bradford Ramsay, general counsel of the National Association of Regulatory Utility Commissioners, was not available at presstime.

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