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House Communications Subcommittee Approves FCC Reform Bill

The House Communications Subcommittee Wednesday approved an FCC process reform bill (H.R.3309) by a vote of 14 to 9 along strict party lines.

Republicans were pitching the bill as a way to improve the FCC by "increasing transparency, predictability, and consistency as part of Republicans' ongoing effort to ensure the commission's work encourages job creation, investment, and innovation."

"I don't understand why the FCC should be treated so differently from every executive agency that is subject to President Obama's Executive Order that is required to survey the industry before initiating rulemakings, that is required to comply with more stringent cost-benefit analysis requirements, and that must receive approval from the Office of Management and Budget before issuing new major rules," said Walden in his opening statement at the hearing. "If President Obama demands these things from the executive agencies, why shouldn't Congress demand them of the independent agencies?"

The FCC is not bound by that order, but has agreed to publish a regulatory reform plan at the president's urging, a plan FCC Chairman Julius Genachowski outlined in a speech last week. As to limiting merger conditions, Walden said the reforms "would end the FCC's ability to hold up an otherwise meritorious merger until it can extract unrelated ‘voluntary commitments.'"

Democrats argue that the reforms, which put a shot clock on FCC decisions, require cost-benefit analyses subjected to a judicial review, limit those merger conditions and much more, are a boon to business special interests rather than consumers. Energy & Commerce Committee Ranking Member Henry Waxman (D-Calif.) argued that the bill would create a new set of procedures that would tie the FCC in knots and lead to endless legal challenges that would be good for industry lawyers. He also took issue with the limits it would put on merger conditions. "We cannot support your FCC impairment bill, and you should not ram it through the Subcommittee in a partisan vote," he said before the bill was approved on that partisan ballot.

"While this may appear very well-intentioned, in practice, these requirements benefit large industry players with the resources to retain expensive outside counsel, and consultants who can monitor and file multiple rounds of comments," added Subcommittee Ranking Member Anna Eshoo (D-Calif.).

Democrats said they could support a version of a second bill (3010), which would streamline FCC reporting requirements.

Subcommittee Chairman Greg Walden (R-Ore.) said the bill was essentially just codifying the spirit of President Barack Obama's executive requiring government agencies to conduct regulatory reviews with an eye toward their impact on jobs and the economy.

Walden argued that the FCC should get "special attention" beyond the Administrative Procedures Act procedural rules already in place because it has a backlog of petitions, applications and consumer complaints, has not delivered some annual competition reports in years and still has not released the Universal Service Reform order after voting on it 20 days ago.

A number of amendments were proposed as part of the vote to pass the bills along to the full committee. All the Democratic amendments were either defeated or withdrawn on both bills. Two Republican amendments to 3309 were approved. One was a word change, the other was an amendment that would require the FCC's Web site to link directly to some key information -- something users of the FCC's redesigned Web site both inside and outside the commission have been asking for. In this case, the requirement is to have links to the FCC's budget, appropriations, number of employees and performance plan.

A single amendment was approved on the second bill on FCC reporting requirements. It was introduced by Rep. Steve Scalise (R-La.) and would require the FCC to take into account "market entry barriers for entrepreneurs and other small businesses" when assessing the state of competition and regulatory barriers.

The bills would do the following, according to a committee summary:

Protecting Jobs by Ensuring Regulatory Benefits Outweigh Costs

  • Require the Commission to survey the state of the marketplace through a Notice of Inquiry before initiating new rulemakings to ensure the Commission has an up-to-date understanding of the rapidly evolving and job-creating communications marketplace.
  • Require the Commission to identify a market failure, consumer harm, or regulatory barrier to investment before adopting economically significant rules. After identifying such an issue, the Commission must demonstrate that the benefits of regulation outweigh the costs while taking into account the need for regulation to impose the least burden on society.
  • Require the Commission to establish performance measures for all program activities so that when the Commission spends hundreds of millions of federal or consumer dollars, Congress and the public have a straightforward means of seeing what bang we're getting for our buck.
  • Apply to the Commission, an independent agency, the regulatory reform principles that President Obama endorsed in his January 2011 Executive Order.
  • Prevent regulatory overreach by requiring any conditions imposed on transactions to be within the Commission's existing authority and be tailored to transaction-specific harms.

Promoting Transparency, Fairness, and Efficiency in Commission Operations

  • Enhance consistency and transparency in the Commission's operations by requiring the FCC to establish and disclose its own internal procedures for:
  • adequate review and deliberation regarding pending orders,
  • publication of orders before open meetings,
  • initiation of items by bipartisan majorities, and
  • minimum public review periods for statistical reports and ex parte communications.
  • Require the FCC to establish its own "shot clocks" so that parties know how quickly they can expect action in certain proceedings and provide a schedule for when reports would be released.
  • Empower the Commission to operate more efficiently through reform of the "sunshine" rules, allowing a bipartisan majority of Commissioners to meet for collaborative discussions subject to transparency safeguards.

Simplifying Reporting Requirements

  • Consolidate eight, separate congressionally mandated reports on the communications industry into a single comprehensive report with a focus on intermodal competition, deploying communications capabilities to unserved communities, eliminating regulatory barriers, and empowering small businesses.