On March 20, I published a commentary, “A Proposal for Improving the FCC’s Merger Review Process,” suggesting that the newly-reconstituted Federal Communications Commission, with Ajit Pai as its new Chairman, issue a policy statement that clearly indicates the manner in which, going forward, it intends to conduct merger reviews. This piece is the latest in a series of Free State Foundation commentaries, all published since the beginning of this year, containing fresh proposals for reforming communications policies.
The latest commentary highlights these problematic aspects of the manner in which merger reviews presently are conducted: (1) the reviews take too long to complete; (2) the competition analyses performed by the FCC largely duplicate those of the antitrust authorities (usually the Department of Justice); and (3) the FCC all too frequently abuses its “public interest” authority by imposing conditions unrelated to any transaction-specific harms.
Invoking the vague congressional delegation granting it authority to approve proposed license and authorizations transfers only if they are in the “public interest,” the Commission far too often engages, as I put it long ago in a March 2000 Legal Time column, in “regulation by condition.”
To remedy, or at least minimize the problematic aspects of the current merger review process, I suggest the new policy statement contain at least these two fundamental elements:
· A commitment to complete review of proposed mergers in a timely fashion.
· A commitment to refrain from imposing conditions on approvals of transactions unless they are narrowly tailored to address harms uniquely presented by the specific transaction.
Please see the entire commentary for a complete explanation of what’s wrong with the current FCC merger review process and my proposal for improving the process through issuance of an agency policy statement.
Along with my Free State Foundation colleague Seth Cooper as a coauthor on several, I have published six other papers this year with fresh proposals for reforming communications policy. Each one focuses on reformist actions that the FCC itself can take without waiting for Congress to act. These papers, with links and a brief summary description are below.
- A Proposal for Improving the FCC’s Forbearance Process. Section 10 of the Communications Act states the FCC “shall forbear” from applying any regulation or statutory provision to a telecommunications service if the agency determines enforcement is not necessary to ensure charges or practices are just and reasonable or necessary to protect consumers. The FCC should make Section 10 the deregulatory tool Congress intended by adopting a procedural rule placing the burden in forbearance decisions on those advocating continued enforcement of old rules. So, absent clear and convincing evidence to the contrary, the FCC should presume Section 10’s substantive consumer protection criteria are satisfied regarding the regulation at issue and forbear from enforcing it.
- A Proposal for Improving the FCC’s Regulatory Reviews. Section 11 of the Communications Act requires the Commission to review telecommunications regulations on a periodic basis and to repeal or modify those determined to be “no longer necessary in the public interest as a result of meaningful economic competition.” Like the Section 10 forbearance provision, Section 11 retrospective reviews have been substantially underutilized to effect their deregulatory purpose. Thus, as with Section 11, the FCC should adopt a procedural rule embodying a deregulatory evidentiary presumption: “Absent clear and convincing evidence to the contrary, the Commission shall presume that regulations under review are no longer necessary in the public interest as a result of meaningful competition among providers of such service.”
- A Proposal for Improving the Regulations Impacting Small Businesses. Section 610 of the Regulatory Flexibility Act requires the FCC to review rules “within ten years” of adoption “to minimize any significant economic impact of the rules upon a substantial number of such small entities.” The FCC’s last completed Section 610 review was for rules adopted in 2000. To relieve small businesses from disproportionate regulatory burdens, the FCC should comprehensively review all such rules adopted through 2012. Going forward, the FCC should conduct timely Section 610 reviews pursuant to a procedural rule that likewise places the evidentiary burden on those seeking continued enforcement.
- A Proposal for Spurring New Technologies and Communications Services. Section 7 of the Communications Act provides that any party opposing the offering of a new technology or service bears the burden of demonstrating it is inconsistent with the public interest. And when a new technology or service is proposed, Section 7 requires the FCC to make a decision concerning the proposal within one year. The FCC should rely more on Section 7 than it has in the past to fulfill Congress’s intent to encourage innovative services and technologies. For example, Section 7 may be relevant as the Commission considers any application relating to deployment of next-generation 5G wireless networks.
- A Proposal for Reforming the FCC’s Video Competition Policy. In view of today’s competitive video marketplace, the FCC should comprehensively reassess its entire bucketful of video services regulations. For example, it should close its flawed proceeding to impose new regulations on video devices and apps and start to eliminate old set-top box rules. Its proceeding to extend legacy regulations to online subscription video services should be terminated. Broadcast TV regulations such as network non-duplication and syndication exclusivity rules should be repealed.
- A Proposal for Trialing FCC Process Reforms. The FCC should improve the transparency and accountability of its administrative processes. Reforms considered potentially problematic can be implemented on a trial basis and then reviewed after a period of time. Commendably, Chairman Pai is already trialing some process reforms, such as publicly releasing draft items to be voted on at FCC Open Meetings. The FCC can trial other process reforms relating to the way its staff acts on delegated authority and the way so-called “editorial revisions” are made by staff after the Commission votes on items.
For those interested in communications law and policy, these Free State Foundation papers, taken together, constitute a wide-ranging set of proposals for reforming both communications policy and the FCC’s own processes. You may not agree with all of the proposals – or even any of them – but I’m certain you’ll find them food for thought.