Bill Would Put Limits on FCC’s Powers


Washington — The just-introduced Regulatory Accountability Act of 2011 would put new limits on how agencies like the Federal Communications Commissions regulate industry.

One of the mantras of the Republican- controlled House, where the bill was initiated, has been what many describe as the job-killing, investmentchilling, innovation-impairing and costly “overregulation” of private industry by the federal government. And even though any bill would have to run the gauntlet of a Democratic Senate, the White House has been pushing agencies to vet their regulations for those that adversely affect jobs or the economy.

In that spirit, the bill, motormanned by Rep. Lamar Smith (R-Tex.), would modify the Administrative Procedures Act, which is kind of the technical manual for the process of regulation, to make it harder to for agencies looking to keep a heavy hand on industry to “manipulate” rules.

Tightening the reins could affect the FCC more than other agencies, such as the Environmental Protection Agency or the Food and Drug Administration. That’s because, as is pointed out during media mergers, the FCC’s “public interest” standard gives it some extra discretion to range into nonempirical areas such as defining an unserved community (broadband), diversity (ownership) or speech (indecency).

Among the bill’s proposals would be requiring more advance notice of “major” rulemakings (with economic cost estimates of over $100 million), a mandate to find the lowest-cost rules — in terms of economic impact on industry — that meets their objective; requiring administrative hearings on “highest-impact rulemakings,” with estimated costs of over $1 billion (some Republicans would likely put network-neutrality rules in that highcost category); and putting rules to the tougher “substantial evidence” test, rather than the default “arbitrary and capricious” standard.

If that were the case, for example, the Supreme Court might have had a tougher time overturning lower-court reversals of FCC indecency decisions. In those cases, the High Court said the FCC had met the less stringent “arbitrary and capricious standard.

The bill would also prevent what Republicans have argued is a lack of notice on the final version of the FCC’s network- neutrality rules. Republican commissioner Robert McDowell opined at the time that he and his staff did not get to see the draft they would be voting on until 11:42 p.m. on the night before the meeting. That point was picked up by the GOP legislators who took aim at the rules.

Cable attorney Dan Brenner of Hogan Lovells in Washington, D.C., said he likes what he sees in Smith’s reform package. “The bill appears to focus on generally prudent principles that say, ‘Show your work; check it twice.’ ”

Free State Foundation president Randolph May, a longtime voice for FCC process reform, said the bill would be a net positive.

“While I don’t agree with all aspects of the proposed Regulatory Accountability Act, for longtime FCC regulatory reform advocates like myself, overall it would have a positive effect,” he said. “Most significantly, the bill would subject the FCC to rulemaking requirements, such as costbenefit and cost-effectiveness analyses, that presently do not apply to independent agencies.

“And for high-impact rules for which an on-the-record hearing is required, it would impose a more rigorous standard of review the agency must meet to pass judicial muster,” he added. “Much of what is in the proposed bill has been embraced by President Obama this year, at least in theory, as he, belatedly, has begun talking about the need to reduce unnecessary regulation. He should get behind this bill.”