House Committee Majority Staff Proposes Structural Changes to FCC

With all five FCC Commissioners scheduled to appear before the House Subcommittee on Communications and Technology today, the majority staff of the Committee on Energy and Commerce released a memorandum proposing significant changes to the FCC’s operating procedures.  According to the memorandum, the proposed reforms will streamline the Commission’s rulemaking processes and provide for more public input before the agency renders its decisions.  A few of the key proposals recommended in the memorandum include:

1.      Requiring the FCC to initiate all rulemaking proceedings with a notice of inquiry instead of a notice of proposed rulemaking. This mandatory prerequisite before the FCC could propose rules would require more deliberation by the agency before it adopts final rules.

2.      Obligating the FCC to publish the text of proposed rules for public comment before adopting any final rule.  In addition, agenda items scheduled for a vote by the FCC would be published in advance of any agency meeting.

3.      Establishing minimum comment and review periods for all proposed rules.  The FCC would also be required to render rulemaking decisions by set deadlines.

4.      Allowing a bipartisan majority of FCC Commissioners to set agenda items for consideration.  This proposal would replace the current process where the FCC Chairman holds the initial power to designate an agenda item for consideration. This proposal could also have the effect of requiring a supermajority of Commissioners to approve agenda items (although FCC Commissioner votes do not always fall along partisan lines).

5.      Requiring that the FCC identify the specific consumer harms addressed by a proposed rule and conduct a cost-benefit analysis of the rule’s market effects.  The FCC would need to review the continued efficacy of any adopted rule and eliminate regulations which no longer serve their intended purposes.

6.      Limiting the FCC’s power to impose conditions on transactions such as mergers to only those “narrowly tailored” to the public interest harms posed by the transaction.  Although Chairmen under both Republican and Democratic administrations have imposed conditions on mergers, the House Republicans have been particularly vocal in recent months about how conditions should not be a means to extract broader policy objectives.

7.      Relaxing the current “sunshine” law, which prohibits more than two Commissioners from conferencing in their official capacities outside of an open meeting.  The proposal would permit three or more Commissioners to meet and discuss agency issues as long as the meeting is bipartisan and follows other procedural safeguards.  This proposal is arguably the least ideological of all those proposed in the memorandum and has been suggested by several observers over the years as a practical solution to the limitations of the sunshine law on communications among Commissioners.

The majority staff’s memorandum is the latest salvo from the Republican majority in its battle with the FCC’s Democratic Chairman over the FCC’s regulatory agenda, particularly its adoption late last year of new Net Neutrality rules over the vociferous objections of Republican members of the Energy and Commerce Committee and House Republican leadership.  Those rules face almost certain legal challenge (earlier appeals by Verizon and MetroPCS were dismissed by the court as premature), and a resolution disapproving the rules under the Congressional Review Act passed in the Energy and Commerce Committee earlier this year.  The CRA resolution, which now faces an uphill battle in the Senate, was put aside last month during the debate over the 2011 budget, and remains pending before the full House.