Free State Foundation President RANDOLPH MAY moderated the session.
The transcript should be read in its entirety for an appreciation of all of Commissioner Clyburn's and Commissioner O'Rielly's remarks. Nevertheless, in the meantime, immediately below are selected excerpts of their conversation that highlight some of their key points.
And if you would like to watch the video of the "Fireside Chat," it is here .
On How the FCC Differs From the Way They Imagined Before Assuming Office:
MIGNON CLYBURN
I spent 11 years as a state regulator and so I had a certain feel for regulation in a smaller pond, of course. But I had a mindset. At most state commissions, you have evidentiary hearings, which I found fabulous because you could hear everybody. It's almost like putting on a case. You can have everybody's viewpoints being aired at one time. The challenge for me coming up here, and it remains a challenge, is that that is not necessarily the case in terms of access, in terms of opportunities, in terms of those who might have opposing viewpoints having the capacity to express themselves. So sometimes you have to dig a little deeper in order to find a balance or, if you want, a counter point of view...
MICHAEL O'RIELLY
I found and still find that the information I was able to get on Capitol Hill, in terms of what people actually would tell me, was more fulsome than I get at the Commission. I think there's a worry about what has to be disclosed in ex partes. So you can actually delve into things more as a staffer and have more in-depth conversations, in my experience on Capitol Hill issues. You could actually solicit ideas from folks without the worry of that idea being exposed to the entire world and being attributed to somebody. Some of those things just make the operations challenging.
On Collegiality Among the Commissioners and the FCC's Increased Number of Divided Votes on Important Items:
MICHAEL O'RIELLY
I don't know about whether the rest of my colleagues get along with each other, but I think that I have a good relationship with them. So I think the personal relationships are good, are fine, and that's healthy. But there have been an increased number of 3-2 votes... [I]t reflects a couple different things. One is the agenda the Chairman has put forward, which I have some difficulty with a number of different pieces, and then also the process that underlines those items, which I too have articulated problems with going forward. That increases the tension level. I try to vote on an issue and set it aside and not let it color the next issue that comes forward because I don't know where the particular lines may draw on the next issue.
MIGNON CLYBURN
When I was sworn in, in '98 as a state commissioner, I have to say those 11 years are probably among the best in terms of my professional life. Because my joke about NARUC, which is our association of state regulators, was that there's no politics when it comes to electrons. And so I could not tell the party affiliation of some good regulatory friends. I can't say that's the case right now. I'm going to be honest with you. I think the floor has gotten more deeply divided from a partisan standpoint. It may or may not be reflective of the entire nation or the Capitol Hill experience, but I've seen shifts in the last couple of years. Personally, I'm not as comfortable. I'm very open about that. But professionally, I do every day rise above it and do my best to serve the American people and try to bring about consensus. At the end of the day, whether I'm as happy as I was 10 years ago, is irrelevant. What's relevant here is good policy.
On the One Change They Would Most Prefer in the Way the FCC Conducts Its Business:
MIGNON CLYBURN
The one thing internally that I am an advocate for is owning your own edits. We have an item circulating. There's been more than one occasion I wonder where an edit came from and got no answer. I think we need transparency internally and externally. So the one thing that you will hear me speak about is that if you want the edit, own up to it and get three votes for it.
MICHAEL O'RIELLY
I know it's not winning the day as of yet. But I believe that making the documents available, certainly for the items that go on the open meeting, would change our ex parte conversations and we would have a more thoughtful dialogue without disrupting them. I have no interest in disrupting our internal deliberations, which are only so much depending on the item. So that part, I think, can be accomplished. We could actually have a more fulsome discussion from every interested party on a particular topic. One of the problems we have today is that the people who are the insiders, those who may have worked at the Commission a certain time, actually have a better chance of knowing what's going on with an item than the American people. That, to me, is problematic. The American people should have the same information as anyone in D.C. and shouldn't have to hire their own lobbyist to figure out what's going to happen between an NPRM and the final order.
On How They Understand the Rule of Law and Apply That Understanding as FCC Commissioners:
MICHAEL O'RIELLY
[T]o me the rule of law starts with faithfully understanding and interpreting a congressional statute, and from that flows fairly and non-biasedly implementing and executing and enforcing those rules that flow from the statute. That's my definition. That's what I try to do on a daily basis. I happen to have experience from my previous life in terms of what I believe the statute means in a number of different places. Certainly not the '34 Act stuff, but some of the stuff that has come more recently. And I try to articulate that as we go forward.
MIGNON CLYBURN
Our authority flows from the Communications Act in terms of our processes and our procedures from the APA... But laws are made about people. They're codified and they funnel up by the will of the American public. And part my compass, so to speak, is serving the public interest. So how do we look at those laws and work within that framework? Where laws may have some ambiguity, a lot of times that's for a reason. If you have ambiguity that is subject to an interpretation, that's why Congress created agencies like ours, to interpret that. And not only to interpret that, but to look into, evaluate, and modify that, to seek suit on national priorities or the needs of the people at the time. So when we talk about law, it's not a static. You can't just say this is the law and that's it. A law is a governing concept that we apply in order to bring about the just and reasonable expectations that we have for our nation. And that, to me, again, is my driving compass in what I attempt to achieve.
On The President's Involvement in the Open Internet Proceeding and the Implications for the FCC as an Independent Agency:
MIGNON CLYBURN
I always say the FCC is an independent agency with a small "i." And when I say a small "i" jokingly, I seriously mean that we listen to public officials, those who head agencies, individuals, and yes, even presidents and vice presidents and lawmakers, one of which you saw walk out of the room. So we listen to all of them. We are not in a vacuum. We interpret through the framework which is clearly laid out. But we're influenced by not one, but all of those entities and individuals... When it comes to the Open Internet Order, Mignon Clyburn has been consistent for years. In 2010, I made it very clear that my preference was to go Title II... The President absolutely is one of the most significant citizens of the world, but his opinion I fold with others in the objectives at hand.
MICHAEL O'RIELLY
I did see the [President's] video. I found it rather unique. It doesn't comport with my past experience with the Administration interacting with the FCC... I do believe that the Administration has changed the game going forward and that the next administration, whether it be Republican or Democrat, will continue to have a greater role. And it does have an impact on our agency and it will have an impact on the institution going forward. I think that's problematic. We talked about the word "independent." I've always had the view, and I think it's consistent with how it's been established, that the Commission was created by Congress to be separate from the Executive Branch. It is not responsive to the Executive Branch... I believe the Administration has a full right to weigh in. They have historically used NTIA as the tool. We just were written by the NTIA on views on Lifeline, so that has been a tool in the past. I found this to be a unique mechanism and I think it's harmful, though. The precedent set will be used in the next administrations going forward.
On Significant Concerns With the Lifeline Program:
MICHAEL O'RIELLY
Obviously - and I've talked about it extensively - it is my desire for a hard budget for the program. It's the only piece of the Universal Service Fund that doesn't have a budget. I would prefer a cap, but I've moved away from a cap to a hard budget. I won't vote for it without one... A cap has a straight number and it can't be exceeded. A hard budget provides mechanisms that may provide the opportunity, depending on the conditions that are written, where it could be exceeded. We can have a discussion of what those conditions could be.
MIGNON CLYBURN
Accountability, discipline, and appropriate levels of oversight. When we came in, this Administration came in, with all due respect to the previous, it was insufficient. We inherited a program that didn't meet the current needs - information needs - of individuals. We came into a program that was expanded, I think rightfully so, to include mobile. But honestly the proper oversights were not in place. What we did was: We came in in 2012. We put some disciplines into that program. We got rid of duplicates. We created a database. We said one per household. We got rid of Link Up. We did a lot of accountability. We put some protocols in place that saved this program nearly $3 billion. You don't see that in headlines. And so when we talk about how we reformed this program and what the parameters are and how much it should be, let me remind you of two things. One, this is a means-tested program, meaning if you do not qualify, you do not get the subsidy. And two, my thing is treat the program equally as any other Universal program. I have no problem with a budget, but it has to be a budget based on realities, based on the current needs, based on the projection. There are 39 million households that are eligible and we need to take them into account.
On FTC Regulation of Internet Privacy vs. FCC Regulation of Internet Privacy:
MICHAEL O'RIELLY
They have a different structure in entirety, so it's set up by a different statute. I don't think you can equate the two exactly, but to your point, and I think to Randy's points that were raised, I think both points are valid and I'd throw a third in there and that is our expertise. The number of people at the Commission that are working on privacy is a handful, maybe two handfuls if I'm being generous. Compare that to what's being done in the decades of work that's been done at the FTC and the number of people that are dedicated to the subject matter.
MIGNON CLYBURN
I prefer to use the word "complementary." We've got complementary authority. We work together where they might have shortcomings when it comes to protecting the American people, particularly when it comes to telecommunications carriers and providers. We work together on cramming and other issues to ensure that your expectations are met and you are protected. And keep in mind, this dual relationship or complementary or if you want to use the word "overlapping" relationship is not a phenomena that just is singularly an FTC-FCC relationship.
On New FCC Regulation of Video Set-Top Boxes:
MICHAEL O'RIELLY
[W]e are going in the wrong direction on the set-top box item. We should be moving towards eliminating set-top boxes. The market is going in that direction. Whether we work with the Congress to change the statute or work internally with the companies to try and figure out how we get away from the box, if you want to save consumers' money, let's get rid of the box. So if there's the idea that they're spending X amount of dollars per month, let's get rid of the boxes entirely. I'm able to use other devices to get video programming today. The Chairman referenced that yesterday. I don't see the problem that he's trying to solve... When you look at the statute itself, it uses the words "converter box, interactive communications equipment, and other equipment." If the Chairman wanted to focus this item on set-top boxes and the old structure and wanted to introduce competition in that old structure to the extent of how long that structure lasts, then that might be one thing that we could have an open debate on. But to stretch it to applications and software that have nothing to do with the set-top boxes and are the future and have no relationship with that old provision to me is extremely problematic.
MIGNON CLYBURN
Congress envisioned in the Telecommunications Act a robust marketplace when it comes to this and I don't care what it is or what it's called, whether it's an app, whatever the interface is. People and entities have come to us and said, "Look we've got a problem by way of competition." Ninety-nine percent of the individuals rent their set-top box from their provider. If that's your choice that's fine. And nothing in this conversation, I jokingly say, in this notice, is set to necessarily bias that one way or the other. What we're trying to do is promote competition in alternatives in the market. That is the underlying, in terms of how I interpret this.
On FCC Regulation of Zero-Rated Mobile Plans:
MIGNON CLYBURN
One of the reasons I was honestly very vocal inside of our house about not abandoning or not eliminating outright the other possibility for sponsored data or zero-rated plans was because when it comes to product differentiation and the like, that it could be a good thing. It could be a worrisome thing too when it's used in a way which we did not envision. And that's why we said we will look at these things on a case-by-case basis.
On the Open Internet Order's "General Conduct" Standard:
MICHAEL O'RIELLY
[Y]ou can never have certainty when you create something called the "general conduct standard" and you basically say it has no structure and it is whatever it is whenever we want, whenever we feel it. That is what the Chairman has created under net neutrality rules. It is however he feels. You can never have certainty the way the current structure is. And that's not what the Chairman wants. He wants to be able to involve himself when he wants, whenever he feels it's appropriate.
A PDF of the full transcript is here.
And please click here to view a video (approximately 60 minutes) of "A Fireside Chat with the FCC Commissioners."
