Free State Foundation's Policy Seminar
"Implementing Real Regulatory Reform at the FCC"
July 28, 2015
On July 28, 2015, the Free State Foundation held a policy seminar,"Implementing Real Regulatory Reform at the FCC," at the National Press Club, Washington, DC. The seminar focused on FCC process reform, rather than any particular substantive regulations or areas of regulation. But, make no mistake, a fair, efficient, and transparent process is required not only to maintain the agency's institutional integrity and the confidence of the public. It is also required for the development and maintenance of a sound, effective, efficient regulatory environment that enhances overall consumer welfare, promotes investment in communications networks, and stimulates innovation in services.
In other words, process really does matter.
FSF is now releasing a transcript of the seminar's panel session that followed the opening keynote address by FCC Commissioner Michael O'Rielly. (Commissioner O'Rielly's written text is here.)
The panel discussion was moderated by RANDOLPH MAY, President of the Free State Foundation. The panel consisted of the following participants:
- RICHARD WILEY - former Chairman, Commissioner, and General Counsel of the Federal Communications Commission, and Chairman, Wiley Rein LLP
- JUSTIN (GUS) HURWITZ - Assistant Professor of Law, University of Nebraska College of Law, and a Member of Free State Foundation's Board of Academic Advisors
- DANIEL LYONS - Associate Professor, Boston College Law School, and a Member of Free State Foundation's Board of Academic Advisors
The transcript should be read in its entirety for an appreciation of all of the views of each panelist. Nevertheless, immediately below are selected excerpts in the order of the panelists' presentations. These excerpts provide an indication of the various perspectives presented at the session. But, again, the transcript should be read in its entirety in order to obtain a full appreciation of each participant's views.
If you didn't attend the seminar, you can watch the YouTube video of the entire program here.
COMMISSIONER MICHAEL O'RIELLY
On process at the FCC
"There is no reason to alter a current procedure if the replacement will cause more harm than good. But let's be clear: functionality does not mean speed, which can be both helpful and detrimental depending on the circumstances. For instance, consider if the Commission delegated every item to the Bureau staff. Admittedly, doing so might increase speed releasing initial decisions but would also be extremely problematic and harm functionality for final results."
"The more I have explored reform ideas, the more amazed I have been by the disinterest of some in informing the public at large of exactly what the FCC is considering on any particular issue. There is almost an indignation that if the public really knew, it would generate more work and slow down our ability to reach decisions. The goal of our current procedures seems to be hide the ball and obfuscate, and on that we are doing a bang-up job. This is a backward perspective that dismisses our obligation to the American public, as well as our duty under the Administrative Procedure Act. It also ignores the benefits gained by welcoming more and diverse ideas to the Commission's proceedings."
On posting meeting items in advance
"Under Commission rules, as soon as Bureau staff circulates draft items for the Open Meeting, typically 21 days in advance, Commissioners are not allowed to reveal the details with outside parties. This prevents the public from obtaining a complete picture of what is in pending proposals or orders, leads to routine confusion over what exactly is at stake, wastes time on irrelevant issues, and bars a fulsome exchange of ideas. My proposal is to publically release the text of Open Meeting items on the Commission's website at the same time they are circulated to Commissioners' offices."
Post-adoption process and editorial privileges
"One might assume, based on the name, that the scope of 'editorial privileges,' if they did actually exist in our rules, would be limited to non-substantive edits, such as correcting typos and updating cross-references in footnotes. In my former job, we called them technical and conforming edits. At the Commission, however, theBureaus or Offices often do much more substantial editing, including adding substantive and significant rebuttals to Commissioners' dissents and providing sometimes lengthy responses to ex parte arguments that had not been incorporated into the draft prior to the vote. There is a very simple procedural reform that I put on the table to resolve this practice: narrow the scope of what can be done under editorial privileges and codify this refined list in the Commission's rules."
On establishing time limits and sunsets
"All too often, the FCC imposes rules, placing new burdens on companies and affecting the marketplace, without any plan to revisit whether those rules remain necessary or relevant in the future. These decisions, and their attendant costs, can linger for years on autopilot while the FCC turns its attention to other policy matters. While the FCC has statutory obligations to periodically review certain aspects of its rules, such as section 11 of the Communications Act, these requirements are generally given short shrift, when they are adhered to at all. As a remedy, I propose that the Commission add sunset provisions to agency orders. The length may depend on a number of factors, including the state of the market, how detailed the rules are, and the resources needed to update the regulations. Let's face it: nothing produces an honest assessment of a rule or program like its pending expiration."
RICHARD WILEY
On cohesiveness within the Commission
"And I really think that if you can have some degree of collaboration, some degree of, perhaps, bipartisanship, it adds credibility. It adds certain political legitimacy to what the Commission's doing, particularly when you've got a divided Washington."
"Most importantly though, if I had to pick one thing [while I was Chairman of the FCC], I tried to get to know [the other commissioners] as individuals. I tried to develop a personal relationship with them because in Washington it wasn't as partisan perhaps as it is today, but still, you know, you got differences. And so we frequently had lunch together, and we started an idea that I had of having rotating dinners at commissioners' homes. And, you know, it's pretty hard to eat at somebody's table on Friday night and then curse them out on Monday morning I found. So I thought that was a very good process."
"You take a look at all the members other than the Chairman, who's picked by the President, they all have a relationship to Congress, and so the agencies become like little Congresses, in truth. And so I suppose it's natural that you'll have some 3 2 votes. That wasn't true in my era completely. Number two, I don't think it's possible for any of us up here to judge from the outside what's going on inside the current FCC. So I'm not going to say it's this person's responsibility or that person's responsibility. But I do say this: I think I know all the Commissioners pretty well, and I respect all of them. And guess what? I actually think they would like each other if they got to know each other a little bit better."
On the ex parte process
"I think as long as those statements are published so people can look at them, and if they disagree with them, they can come in and make their own ex parte comments. I think that's just a realistic process. You're never going to get perfect knowledge into the Commission. I think this process is working about as well as it could."
On deadlines
"Now on process reform, I'll just say the most important thing that I think is needed, and I thought so at the time I was there, is the speed of the whole procedure at the FCC....I think you've got to set deadlines."
"And I think the Commission needs to set deadlines for decisions - for mergers - to have a true shot clock that really is there, not one that stops at 170 days and never starts up again."
DANIEL LYONS
On the importance of process
"My civil procedure professor in law school was the great Arthur Miller who used to always say, 'look, we're going to sit down; you make whatever law you want; you decide what the substance is going to be; I'll decide on the procedure; and I'll beat you every single time.' And he's absolutely right, right? The procedure by which the law is carried out winds up being at least as important as what the rule itself is."
"There are a number of people who may disagree with the President's views on communications law policy but will continue to vote for him for other reasons. That's the reason why process ends up being so important, so that the administrative process under the APA, that's designed to make sure that all interested stakeholders have a say on particular issues before the Commission, makes sure that every decision being decided by the Commission is being decided based on input of all relevant parties, as opposed to is simply the function of some noisy presidential election two, three, or four years ago."
"And if it is true that in response to those comments, or response to those ex partes that the staff is going to have to revise the order, maybe that means the order wasn't ready for prime time. And so it's not necessarily a bad thing to let it slip another month in order to make sure we're producing good quality regulations as a result."
On transparency/editorial privileges
"I really appreciate Commissioner O'Rielly's focus on the Commission's ultimate decision-making authority. I think it's not unreasonable for him to ask that all five commissioners be able to have exactly what it is they're voting on before they vote. The idea, I think, is that we want to be a nation that's under a rule of law and not a rule of ideas. We don't want to vote generally on sort of the broad strokes of a particular proposal because the details wind up being what's litigated. And so I think it's important for the decision-makers, three of five of whom turn the order into law, to be able to have the law before them in final form before the decision is made."
On making items public before the Commission votes on them
"The Platonic ideal of the agencies is that the five commissioners come together and there's a give-and-take at the open Sunshine meeting happening live before the eyes of the public where policy is being made. In fact, policy has been made long before, and the votes are already cast before everybody comes into the room. It's almost a kind of Kabuki dance. And if that's the case, if the actual give-and-take among the Commissioners is all scripted, then shouldn't we at least know what it is that they're voting on before we walk in?"
On delegated authority
"I think it's problematic for the FCC to take so much substantive law and push it one level beneath Commissioners down to staff, in part because staff is not confirmed by the Senate, they're not subject to fixed terms of service necessarily, and so they don't have the same democratic checks on their power that the Commissioners at least do."
JUSTIN "GUS" HURWITZ
On the current administrative process at the FCC
"I love administrative process and I think it would be a great idea if the FCC had some."
"So what is the purpose of process? Process serves a number of fundamental and important goals. It serves the goal of establishing legitimacy, making sure that what the agency is doing is legitimate, providing notice to those who are governed, and improving the quality of decision-making. Generally, the purpose of process is to protect and benefit those who are governed by those making the rules. It is not to protect the rule-makers. It is not to protect the governors. And one of my great concerns about how the Commission, in particular, and other agencies generally, view process is they view process as a set of hurdles to jump through to ensure that whatever they want to do will be upheld by the courts."
"Process is not the enemy. Process is about making sure that what the Commission does is good. If there's going to be this barrage of ex partes, as Daniel said, that suggests there's a problem with the order. This isn't something to be feared. This is something to be embraced."
On the APA and conforming all agencies' processes
"Well, I think that as the agencies have been more aggressively pushing their own procedures, the courts are starting to say: "Hey, you guys need to start more rigorously following a common set of procedures." I think Michigan v. EPA is one example of this where the Supreme Court is trying to say: "Hey, cost-benefit analysis, this is basic; you all should be doing this." So look to the APA for guidance. Try and conform with the APA, and also look to what other agencies are doing and try and conform with what they're doing to the extent that it's in accord with due process."
On the Sunshine/transparency
"The result of the Sunshine requirement is that the orders get prepared behind closed doors by just one or two of the Commissioners, as opposed to in this public, collaborative, back-and-forth, give-and-take process. That's the exact opposite of the purpose of Sunshine."
On the ex parte process
"The real concern about it is that it creates substantial access for insiders. And people who aren't familiar with the process, who aren't able to get to D.C., who can't hire attorneys, it locks them out of the process. Even if you can go in and make one or two ex partes, perhaps, and that's your time to get before the Commission, others go in 62 times."
A PDF of the panel transcript is here.
Please click here to view the YouTube video of the seminar (102 minutes in length), including Commissioner O'Rielly's opening address and the panel presentation.
Please click here to read Commissioner O'Rielly's opening address.
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