FCC Rulemaking Seen as Holding Up Well Compared With Some Agencies

The Administrative Procedure Act governs the FCC and all other regulatory bodies, but the agencies differ in practice, we found. For instance, the Federal Elections Commission has substantially fewer rulemakings -- five in 2015. The FEC also sees very little lobbying because substantial business issues rarely are at stake, said a veteran lawyer. But the agency makes proposed rules publicly available anywhere from minutes to days before the agency's monthly meeting, something the FCC doesn't do, we found. The FEC also rivals the FCC in releasing official documents after business hours (see a separate report in this Special Report (1608040026).

FCC transparency has been pushed in recent months by Commissioners Ajit Pai and Mike O'Rielly (see 1605150004), House Communications Subcommittee Chairman Greg Walden, R-Ore. (see 1603220053), and Senate Commerce Committee Chairman John Thune, R-S.D. (see 1603210052). But being more upfront about the details of rulemakings before the FCC issues them arguably would cut down on the agency's flexibility as it goes through its final processes, Wiley Rein co-founder and former FCC Chairman Richard Wiley told us.

“Process reform remains a top priority of the Chairman," the FCC said in a statement. "During his tenure, he has enacted process improvements that include a consent agenda and rocket docket, which have helped to reduce the Commission’s backlog and speed the voting process; a revamping of internal processes that includes accepting new rulemakings electronically and routinely placing all petitions -- including rulemaking petitions -- out for comment; and virtually eliminating paper circulation of rulemakings. However, the Chairman has never proposed to change the commission’s long-standing procedures governing public release of draft items, which allow frank, internal discussion of items before a final vote. Releasing draft items to the public before the commission has had a chance to improve them through internal deliberations would simply delay action on the many pressing issues facing the Commission.”

"A lot of these process complaints are not entirely invalid, but they are remarkably convenient, coinciding with decisions going the way the cable or wireless lobby doesn't want," Wood said. Meanwhile, congressional complaints about transparency are ironic since Congress "is hardly the most transparent lawmaking body," Wood said. Putting out a final draft of a proposed rule before a vote on it has drawbacks, such as the possibility of a never-ending cycle of comments and revisions to each subsequent version of the final draft, Wood said. He said with the chairman largely running the agency, even the other majority commissioners can sometimes feel in the dark, and reforming Sunshine Act rules to let more than two commissioners meet to talk would help.

The Sunshine Act “is unpopular with a lot” of independent agencies, which try to get around its strictures with one-on-one meetings or notational voting, said American University professor of practice-administrative law Jeffrey Lubbers. And the Sunshine Act has been criticized as perversely leading to less openness through fewer public meetings, he said. When meetings do occur, Lubbers said, “discussions are rather rehearsed” and reflect decisions already made. Before the Sunshine Act, FCC staff "would work it out right down to the wire," Wiley said. "Today, you can't do that.” Some commissioners also have complained of Sunshine Act limits on their ability to talk freely among themselves (see 1605170025).

Rulemaking was one of the areas singled out in the process reform report requested by Tom Wheeler just after taking over his chairmanship and put out in 2014 by the staff working group led by Diane Cornell, special counsel to the chairman’s office. The report said FCC rulemaking “in general serves the agency’s policy development well,” but the agency should make it mandatory to include the text of proposed rules in NPRMs, as it typically does. The agency’s rulemaking transparency also came under fire in 2007 by GAO (see 0710040118), with the agency in response making public its list of items on circulation and putting out its agenda for public meetings three weeks before the meeting (see 0804250126). The FCBA didn't comment about the agency's rulemaking policies and procedures.

Further changes could be afoot, Lubbers said, pointing to various agency reform bills such as the Regulations from the Executive in Need of Scrutiny Act (HR-427) that passed the House in 2015 and would require that major rules not take effect unless expressly approved by Congress, and the Independent Agency Regulatory Analysis Act (S-1607), introduced in 2015. That would require independent agencies to comply with the regulatory analysis requirements that cover other federal agencies and to give the Office of Information and Regulatory Affairs an assessment of the costs and benefits of a proposed or final economically significant rule.

Agencies' rulemakings and related policies can vary widely, and the FCC fares better than some others. More than any other agency over the past 30 years, EPA and its rules have been subject to aggressive judicial review because its rules often end up being "very controversial [and] very costly," said Richard Stoll, an administrative-law attorney at Foley & Lardner. "Ultimately, whether the rule is going to survive judicial review [depends in large part] on whether the agency made all the relevant information and data available for the public." The Federal Aviation Administration, particularly its website, "is really good" at keeping the public informed on proposed rules, including posting summaries, said Ken Suzan, a lawyer with Barnes & Thornburg who does some drone-related work before the FAA. When the agency comes out with a rule, as soon as that day, "they give you the nuts and bolts of what we need to advise our clients on," Suzan said.

Agencies, once they have procedures in place, typically keep that status quo, and that comes into play in the telecom sphere, said administrative law expert Aaron Nielson, Brigham Young University associate law professor. “Kind of like companies have a culture, agencies have a culture," Nielson said. “The people who do FTC work … have all kind of been through the agency so that's how they view things," he said. "It reinforces the process -- 'This is how the FTC works.' All the players kind of come from the same place.”

The FTC, meanwhile, rarely does rulemaking since its rulemaking procedures by statute are more difficult, Nielson said. The FCC, conversely, is more willing to do rulemaking because it doesn't work under some of the same statutory burdens, he said.

Regulatory agencies run by an administrator, without meetings, like the FAA, take in comments and staff write memos “and then all of a sudden the FAA issues the final rule,” Lubbers said. “It’s a black box.” With FCC meetings, he said, “At least you get a whiff of what they are talking about” behind closed doors.

Meanwhile, the FCC among regulatory agencies is unusual in welcoming ex parte communications, with many agencies as a matter of policy not accepting them after issuing an NPRM, Lubbers said, saying it and the Consumer Financial Protection Bureau have particularly liberal ex parte policies, while other agencies including the FTC and Transportation Department are less so. “They don’t want to get bad publicity looking like they are talking to one party but not another,” he said. The FCC also is one of the few agencies that doesn’t bar ex parte communications in the reply stage, he said.