FSF President Randolph May to Urge FCC Regulatory Reform at Congressional Hearing
ROCKVILLE, MD - Free State Foundation President Randolph May will testify at a hearing on "Improving FCC Process" before the House Subcommittee on Communications and Technology, Committee on Energy and Commerce, on Thursday, July 11, 1013. In his testimony, Mr. May supports the proposed FCC regulatory reforms contained in the Committee's Discussion Drafts because
, along with his own additional proposals, they would make the FCC less likely to default so often to regulatory measures, even absent clear and convincing evidence of market failure or consumer harm.
Immediately below is the
Summary of Mr. May's testimony. A PDF of the complete testimony is available
here.
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Summary
I commend the Committee for undertaking this effort to reform the FCC's processes and its decision-making approaches, and I support the proposed reforms in the Discussion Drafts. Given the increasing competiveness in the communications marketplace, FCC reforms, such as those embodied in the draft bills, are needed now more than ever.
The FCC still operates today with a pro-regulatory bent pretty much as it did in 1999 when FCC Chairman William Kennard called for the reorientation of the agency's mission to account for the increasingly competitive environment evident even then. The reforms in the draft bills, along with a few additional proposals I will suggest, would make the FCC less likely to default so often to regulatory measures, even absent clear and convincing evidence of market failure or consumer harm. In today's marketplace environment, the default position should not be regulation.
I wish to highlight here the proposed reform of the rulemaking requirements and the transaction review process because they are especially consequential. New Section 13(a)(2)(C)(iii)'s requirement that the Commission, before adopting a new or revised rule, provide a reasoned explanation why market forces and technology changes will not, within a reasonable time period, resolve the agency's concerns is particularly welcome. I urge the Committee to go a step further to make it more difficult for the Commission to avoid the import of this provision while carrying on "business as usual." I suggest revising the provision to read: "(iii) a reasoned determination, based on clear and convincing evidence, that market forces or changes in technology...." This change will not prevent the Commission from adopting any new regulations, and it is not intended to do so. But, without altering the substantive criteria the bill specifies, the suggested change simply requires the agency to meet a higher evidentiary burden before adopting or revising regulations.
The provisions contained in new Section 13(k), especially the addition that would allow the Commission to condition approval of a proposed transaction only if the condition addresses a likely harm uniquely presented by the specific transaction, would go a long way toward combatting abuse of the transaction review process. Over time, the agency increasingly has abused the merger review process by delaying approval of transactions until the applicants "voluntarily" agree - usually at the "midnight hour" - to conditions not narrowly tailored to remedy a harm arising from the transaction or unique to it.
I also suggest the Committee reform the forbearance and periodic regulatory review process by, in effect, requiring a higher evidentiary burden to maintain existing regulations on the books. Absent clear and convincing evidence that the regulations at issue should be retained under the existing substantive statutory criteria, regulatory relief should be granted. Similarly, I propose adoption of a "sunset" requirement so that all rules will automatically expire after five [or X] years absent a showing, based on clear and convincing evidence, that it is necessary for such rule to remain in effect to accomplish its original objective.
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A PDF of the full testimony is here.
The Free State Foundation is an independent, nonpartisan free market-oriented think tank located in Rockville, Maryland.
