Anxiety Growing Over What Could Become Prolonged Federal Shutdown

Many in the communications policy world have battle scars from the last prolonged federal shutdown, 16 days in 2013 when former Commissioner Mignon Clyburn was acting chairwoman. Then, the FCC, unlike some other federal agencies, largely shuttered its website, leading to widespread complaints. The FCC has been funded for the first days of this closure, but that ends Wednesday. The agency isn’t saying at this point if it will take its electronic comment filing and other licensing systems offline, with a public notice planned for Wednesday. The expectation among industry and FCC officials is that the 28 GHz auction won't reopen Thursday as planned and the website will be largely shuttered.

The other big area of anxiety is the effect on transactions, starting with T-Mobile/Sprint but also the many other smaller deals like spectrum license sales that are before the FCC.

The partial shutdown is expected to last until at least Wednesday, as neither the House nor Senate is expected to meet again for more than a few minutes before that afternoon. Both houses will hold brief pro forma sessions Monday, but no legislative business is expected. House Democrats are weighing potential options for putting an end to the shuttering once they officially take over majority control of the chamber Thursday. Those options include either a continuing resolution to temporarily fund all agencies affected by the shuttering or a combination of a CR to cover only the Department of Homeland Security's funding and an omnibus spending bill for all other agencies whose appropriations weren't in other “minibus” bills passed earlier this year, House aides said. A DHS-only CR would temporarily delay another showdown between Trump and Democrats over border wall funding that prompted the current standstill (see 1812210048).

The last time, the FCC delayed its October 2013 meeting and the closure complicated the final month of the time Clyburn was at the helm. The federal shutdown meant about 98 percent of the FCC’s staff was sent home, Clyburn said then (see 1311040058): “I can’t say it hasn’t had an impact.” The longest federal interruption in history lasted 27 days from Dec. 16, 1995, to Jan. 6, 1996.

In 2013 “it was absolutely, positively crippling not to have the FCC’s website active,” said a lawyer with wireless clients. “There’s a lot of us who don’t keep a lot of paper anymore.” Once the FCC re-opens, “it will take some time for the already hard-pressed staff to clear the backlog that will build up during the shutdown,” said a wireline lawyer. “The agency is at historically low staffing levels, which makes it even harder to recover from the disruptive effects of a shutdown.”

"The impact of a shutdown on the FCC or any federal agency goes far beyond the actual days of the shutdown,” said Jamie Barnett, a telecom lawyer at Venable. “It begins as an interruption to meaningful workdays before as the planning for the shutdown wipes out thousands of man-hours. During the shutdown, services are not available, schedules and appointments get wrecked and people with important business before the agency are delayed, sometimes very expensively, very detrimentally.”

The effect on morale for the “underpaid, hard working experts at the FCC is significant, with feelings of being undervalued and underappreciated lasting for months or longer,” Barnett said. After the closure, “getting back up to speed takes valuable time,” he said. “No doubt some federal employees with a wealth of experience will depart to find a more reliable, appreciative employer. The FCC already has lost people, and this shutdown will make that hole deeper, lasting for years.”

“Several of my clients are small companies seeking to bring innovative radio-based technologies to the U.S. market,” said Mitchell Lazarus, a wireless lawyer at Fletcher Heald. These clients need waivers, equipment approvals, consultations with the Office of Engineering and Technology, the FCC lab and NTIA, he said. “Some are not well capitalized and need prompt responses to move the process forward, and to reassure their investors in the meantime,” Lazarus said. “They are the future of American technology. The delays from these shutdowns hit them especially hard.”

“Because the FCC is open through the end of the year, I don't believe that the transaction issue is a problem,” said Alan Tilles, at Shulman Rogers. “Usually, you need to get transactions done by the end of the year for tax reasons. Thus, in this specific case there shouldn't be much harm done.” A short closure in January wouldn’t be a huge problem, Tilles said. “When it takes four years to get a land mobile rulemaking through the agency, a few days down do not make a lot of difference,” he said. “If it's a long term thing, it can have a significant impact on public safety.”

Tilles said his biggest concern is for FCC employees and contractors: “They are the ones that will suffer the most.”

Court Concerns

“If this drags on too long, it may actually start to impact the schedule for oral argument in the net neutrality case,” said Harold Feld, senior vice president at Public Knowledge. “Even if things end before the oral argument date on Feb. 1, the FCC might ask for a delay if [the Office of General Counsel] feels they haven't had sufficient time to prepare.” In the short term, the interruption could affect the 28 GHz auction. “Other initiatives, such as work on C band or 5.9 GHz, will undoubtedly be delayed,” he said. “It may also slow down certification of new 5G devices, delaying rollouts.”

A prolonged shutdown could delay the net neutrality appeal, scheduled for oral argument Feb. 1 in the U.S. Court of Appeals for the District of Columbia, and the media ownership case in 3rd Circuit, in which the government's brief is due Feb. 15, said Georgetown Law Institute for Public Representation Senior Counselor Andrew Schwartzman. “Preparation for an argument like that takes several weeks, so if the shutdown ran for a few weeks into January, it would be very disruptive,” he said. “Similarly, a case like the 3rd Circuit appeal requires a good bit of internal review, and if there is a backlog from a shutdown, it could make it hard to get the brief in as scheduled.”

Various items adopted at the December commissioners’ meeting depend on Federal Register publication to trigger comment dates, Schwartzman noted. “I would imagine that there will be a backlog there as well, so that comment dates may be pushed back by several weeks at the least.”

A lawyer with cable and broadband clients told us the agency let the law firm know ECFS would likely go offline so before the government shut down the firm downloaded any documents it figured it might need. FCC officials told us they hadn't received word from the chairman or managing director about what would happen with ECFS in the event of a prolonged closure, but it's up to those offices to make that determination.

Internet and satellite lawyer Stephanie Roy of Perkins Coie said if ECFS isn't updated with new filings, the impact on open proceedings would be minimal since those proceedings would be on pause and matters with sensitive time frames would almost surely get extended deadlines. But if ECFS goes offline altogether, it would affect the ability to advise clients because regulatory practitioners often use the system as an archive, she said.

T-Mobile and Sprint officials knew their deal “was going to be a slog and so I think the delay is not as big a deal,” said a lawyer not involved in the transaction. “What is less visible is the smaller transactions or waivers or other issues that are done on delegated authority and don't attract much attention and aren't controversial but are really important to the affected parties.” In 2013 when the FCC website was shut down some work “literally could not be done,” the lawyer said.

Attorneys at several communications law firms told us they weren’t looking at expansive shutdown plans since the FCC has funding to stay open until Jan. 2. Attorneys are hustling to file applications before then in order to make sure any deadline clocks would keep running if there's a disruption, Garvey Schubert broadcast attorney Melodie Virtue told us. If such an application isn’t filed before a shutdown, the deadlines for petitions to deny wouldn’t start until the government resumed, she said. Though previous closures made it harder to access some FCC databases, Virtue said many attorneys take advantage of online mirrors such as REC Networks’ FCC.Today