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House Approves Measure To Reform FCC Processes

Wednesday, March 28, 2012

By Paul Barbagallo  

The House voted 247-174 on March 27 for a Republican-led bill that would reform the way the Federal Communications Commission operates as an independent federal agency, though indications are strong that the Democratic-controlled Senate will not take up the measure.

The House cast its final vote on the FCC Process Reform Act (H.R. 3309) after several unsuccessful, last-ditch attempts by Democrats to soften the bill's language.

Rep. Greg Walden (R-Ore.), chairman of the House Energy and Commerce Communications and Technology Subcommittee and author of H.R. 3309, said his bill, as drafted, is necessary to introduce more openness and transparency to the FCC's processes and procedures.

During general debate, Walden criticized the FCC for overhauling rules governing the Universal Service Fund last October without first making available the text of the rule changes to the public, or even when the commission actually voted to adopt them.

“They voted on a press release,” Walden said.

As is often the case, FCC commissioners vote to adopt an order or issue a notice of proposed rulemaking and the text of that order or proposed rule is not actually released until days, or sometimes weeks, later. Sometimes there are significant changes made between the time of the vote and the time the NPRM is published.

Walden went on to accuse the FCC of a “data dump”—essentially, updating the record in its Universal Service Fund rulemaking proceeding with “thousands of pages of new data” just days before rendering a final decision.

Under H.R. 3309, the FCC must issue the full text of a proposed rule before a vote. The public would then have 30 days to comment on it.

Among the bill's other mandates for the FCC, the agency would have to survey the state of the marketplace through a notice of inquiry before proposing any new rules. The commission would also have to identify a market failure, a consumer harm, or a regulatory barrier to investment before adopting any “economically significant”rules, and then demonstrate that the benefits of new regulations outweigh the costs. Rules that are economically significant have an annual effect of at least $100 million.

Since taking the helm as chairman of the House Communications subcommittee, Walden has been especially critical of the agency's process not just for adopting new rules, but for reviewing mergers and acquisitions, the most recent being that involving Comcast Corp. and NBC Universal, which lasted more than a year, and AT&T Inc. and T-Mobile USA, which the FCC blocked at the end of December.

Democrats Rail Against Bill.

Arguably the most controversial provision of the bill would limit the concessions the FCC can require of companies seeking approval to merge.

As stipulated in the bill, merger conditions must be “narrowly tailored to remedy a harm that arises as a direct result of the specific transfer or specific transaction.” The FCC also would not be able to accept any “voluntary commitments” from merging companies that are outside the scope of its statutory authority.

“This would alter the ability of the FCC to impose conditions in the public interest,” said Rep. Anna Eshoo (D-Calif.), ranking member of the House Energy and Commerce Committee's Communications and Technology subcommittee.

House Energy and Commerce ranking member Henry Waxman (D-Calif.) said the provision would “disable the FCC, not reform it.”

Rep. John Dingell (D-Mich.) added that the provision is a prime example of “trying to kill the disease and kill the patient at the same time.”

Rep. Maxine Waters (D-Calif.) introduced an amendment to strike the language. Her amendment, which was not agreed to, also would have prohibited FCC commissioners from going to work for a company if they had voted on a transaction involving that company within the previous year. The measure comes in direct response to Republican Commissioner Meredith Attwell Baker's resignation from the FCC last year for a job at Comcast Corp., months after Baker voted to approve Comcast's acquisition of NBC Universal.

Another amendment proposed by Waters would have required the commission “to create and implement rules requiring public disclosure of contributions received by any party that submits to the commission facts, arguments, offers of settlement, or proposals of adjustment (either electronically or in writing), whenever such contributions may constitute a potential conflict of interest.” That, also, was not agreed to.

Rep. Jackie Speier (D-Calif.) offered an amendment that would forestall implementation of HR 3309 until after the FCC issues a report on how the bill would affect the agency's mandate to promote competition and innovation. That measure failed as well.

Lastly, Eshoo again offered an amendment that would require television broadcasters, cable operators, and satellite providers to include in their local public-inspection files the names of donors of more than $10,000 to entities “sponsoring political programming.”Democrats fought hard to insert it into the broader H.R. 3309, with Eshoo making a plea for Congress to finally recognize the impact of super PACs. Walden, a former broadcaster, spoke out against the amendment, arguing that there are too many loopholes.

The amendment reads: “The commission shall revise its rules to require the public inspection file of a broadcast licensee, cable operator, or provider of direct broadcast satellite service to include, from each entity sponsoring political programming, a certification that identifies any donors that have contributed a total of $10,000 or more to such entity during the 2-year period preceding the request of such entity to purchase time for such programming.”

“It's easy to get around this,” Walden said. He added that there are too many unanswered questions about what is “political programming.”

The amendment failed. As he did during consideration of H.R. 3309 in committee, Walden said he was open to addressing the issue with Democratic leaders going forward.

The FCC may vote next month on new rules requiring television broadcasters to make their “political file” accessible to the public online. Those rules would not extend to cable operators or satellite providers, however.

Bill Appears Dead on Arrival in Senate.

Freshman Senate Commerce Committee member Dean Heller (R-Nev.) has offered a companion bill to Walden's H.R. 3309, but so far no Democrats have signed on.

Despite passage of H.R. 3309, Democrats on the Senate Committee on Commerce, Science, and Transportation have expressed no intention of taking up the measure. In addition, President Obama has come out strongly against the bill.

“Right now, the Senate is sitting on over two dozen bills that would spur job creation and innovation,” a Walden spokeswoman said in an emailed statement. “So while it is disappointing, it is not surprising that the Senate Democrats are once again deciding to punt on legislation that would foster an environment of confidence and certainty for the communications and technology sector, which is one of the top economic drivers in our nation. This week, the House will heed the advice of the job creators who have urged Congress to implement these commonsense reforms that improve transparency and predictability at the FCC.”

The bill has won the support of the National Association of Regulatory Utility Commissioners, the National Association of Broadcasters, and the National Cable and Telecommunications Association, and the USTelecom Association.

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