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Monday, February 16, 2015, Alert No. 2,710.
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Sen. Heller Again Introduces FCC Process Reform Act

2/10. Sen. Dean Heller (R-NV) introduced S 421[LOC | WW], the "Federal Communications Commission Process Reform Act", a bill that would make the Federal Communications Commission's (FCC) rule making process more transparent, and require the FCC to identify market failure, consumer harm, or a regulatory barrier to investment before adopting economically significant rules.

S 421 was referred to the Senate Commerce Committee (SCC). Sen. Heller is a member. Various versions of this bill have been introduced in three consecutive Congresses.

Sen. Heller stated in a release that "As the influence of the FCC continues to grow with innovation, it is imperative its actions not be clouded in opaqueness or secrecy. Consumers ultimately suffer the most when this occurs, and I do not believe that was the intent when legislators created the FCC over 80 years ago."

He continued that "I believe consumers deserve more transparency in the FCC rulemaking process."

He elaborated that in FCC rulemaking proceedings, "the public will know exactly what the FCC is voting on well before the vote. Right now, we don't even know what major decision like the FCC's net neutrality order says. How is that an example of solid rulemaking? The transparency in this legislation delivers a better product for consumers as they will know for certain the cost of regulations to economic growth and whether new rulings are justified based on current problems facing the market. These are principles that all consumers deserve."

House and Senate Republicans have been introducing and promoting FCC rulemaking process reform bills since the 112th Congress.

In the 113th Congress, the House passed  HR 3675 [LOC | WW], the "Federal Communications Commission Process Reform Act", by voice vote. However, the Senate did not pass that bill.

HR 3675 (113th Congress), which the House passed on March 11, 2014, had bipartisan support. The House passed a related but much broader bill in the 112th Congress, HR 3309 [LOC | WW], the "Federal Communications Commission Process Reform Act of 2012". The vote on final passage was 247-174. See, Roll Call No. 138. Republicans voted 235-0. Democrats vote 12-174. The Senate did not pass that bill either.

Sen. Heller was the sponsor in the 113th Congress of the Senate version, S 1989 [LOC | WW].

Commentary. Sen. Heller states that the purpose of his bill is to increase "transparency". TLJ argued in articles written at the time that the House passed its FCC reform bill last year that "meaningful transparency is not in the interests of either House Democrats and Republicans". See, story titled "Commentary: FCC Process Reform Act" in TLJ Daily E-Mail Alert No. 2,633, March 12, 2014.

Rather, rulemaking by the FCC has always lacked many elements of transparency. Members of the House and Senate, and especially members of the Commerce Committees, have supported this. This bill would still leave considerable intransparency.

It is very difficult to pass a bill. Promulgating rules, which can operate as a substitute for legislation, is a simpler matter. Agencies such as the FCC frequently act as an agent for the Congress in enacting by rule what may have considerable support in the Commerce Committees, but which those members cannot get enacted by statute. A non-transparent process facilitates this arrangement.

However, President Obama and the last two FCC Chairmen have overturned this long standing arrangement. The FCC under the leadership of former Chairman Julius Genachowski and current Chairman Tom Wheeler, is acting on key matters as the agent of President Obama. The FCC is now acting contrary to the wishes of the majority party in both the House and Senate. Many Republicans are upset.

Moreover, the creation and maintenance of regulatory regimes, whether by statute or rule, enables organized economic interests to gain advantage over other economic interests, not through the operation of competition in the market, but through the government's creation of economic rents.

Sen. Heller's bill would require the finding of market failure or harm to consumers before writing certain rules. Such a process would undermine the ability of the Congress and FCC to maintain regulatory regimes that reward participants in political processes with outcomes that they cannot achieve in the marketplace.

There are people in both parties, in regulatory agencies, and in the private sector who favor regulation based upon sound economic analysis. However, many (including many Republicans) stand to lose from such an approach.

The problem for many today is not that the FCC has been facilitating and rewarding rent seeking behavior, but that their role in the decision making process has been diminished.

FCC Consolidated Reporting Act Re-Introduced

2/4. Sen. Dean Heller (R-NV) introduced S 253 [LOC | WW] on January 26, 2015, while Rep. Steve Scalise (R-LA), Rep. Greg Walden (R-OR), and Rep. Anna Eshoo (D-CA) introduced HR 734 [LOC | WW] on February 4. Both bill are titled the "Federal Communications Commission Consolidated Reporting Act of 2015". These bills, which are similar, but not identical, are re-introductions of bills from the 113th Congress.

Both of these bills would consolidate eight statutorily mandated annual and tri-annual reports into a single biannual report titled "Communications Marketplace Report". S 253 also deals with the consequences of FCC failure to comply the the deadline for completing this consolidated report. The FCC has a long history of failing to meet its statutory deadlines for completing reports.

Rep. Steve ScaliseRep. Scalise (at right) stated that "My bill will not only help the FCC operate more efficiently, but it will also encourage the commission to holistically analyze competition in the marketplace, rather than basing their analysis on the outdated silos that no longer reflect the 21st century communications economy. It is time for the FCC to operate in a manner consistent with the innovative era in which we live ...". See, release.

Rep. Scalise introduced this bill on February 4, 2015. The House Commerce Committee (HCC) promptly approved it on February 12, by voice vote, without amendment. See, HCC web page for this mark up meeting.

Rep. Marsha Blackburn (R-TN) wrote in her opening statement that this bill "reduces the reporting workload and increases efficiency at the FCC by consolidating eight separate congressionally mandated reports on the communications industry into a single comprehensive report. This streamlined report will give us important information about competition among technology platforms and the deployment of communications technologies to unserved communities."

Rep. Scalise sponsored a substantially identical bill in the 113th Congress. The House passed that bill, HR 2844 [LOC | WW], the "Federal Communications Commission Consolidation Reporting Act of 2013", by a vote of 415-0, on September 9, 2013. See, Roll Call No. 449. See also, story titled "House Passes Bill to Consolidate FCC Market Reports" in TLJ Daily E-Mail Alert No. 2,598, September 10, 2013. The just introduced bill is unchanged in substance from the bill passed by the House in 2013.

Sen. Heller introduced his bill on January 26, 2015. He also introduced a substantially identical bill in the 113th Congress, S 1379 [LOC | WW], also titled "Federal Communications Commission Consolidated Reporting Act of 2013". However, the Senate did not pass either S 1379 or HR 2844.

S 253 was referred to the Senate Commerce Committee (SCC). Sen. Heller is a member.

House Again Passes Regulatory Accountability Act

1/13. Rep. Bob Goodlatte (R-VA) and others introduced HR 185 [LOC | WW], the "Regulatory Accountability Act of 2015", on January 7, 2015. The full House amended and passed it on January 13, by a vote of 250-175. It is very similar to legislation passed by the House, but not the Senate, in the 113th Congress.

This bill is not directed at the Federal Communications Commission (FCC), or any one agency. Nevertheless, it would affect all agencies that promulgate rules pursuant to the Administrative Procedure Act (APA), including the FCC.

Republicans voted 242-0. Democrats voted 8-175. See, Roll Call No. 28.

The original cosponsors of the bill are Rep. Collin Peterson (D-MN), Rep. Lamar Smith (R-TX), Rep. Tom Marino (R-PA), Rep. Pete Sessions (R-TX), and Rep. Trent Franks (R-AZ).

The bill was referred to the House Judiciary Committee (HJC), which Rep. Goodlatte chairs. However, it went to the full House, without a hearing or mark up by the HJC.

President Obama's Office of Management and Budget (OMB) issued a veto threat on January 12. It asserts that the APA contains "robust and well-understood procedural and analytical requirements".

It adds that this bill "would replace this established framework with layers of additional procedural requirements that would undermine the ability of agencies to execute their statutory mandates".

Republicans have been trying to pass a bill of this nature since they won a majority in the House in the 2010 elections. This legislation has been the subject of hearings, subcommittee and full committee markups, and debates.

Rep. Goodlatte introduced HR 2122 [LOC | WW], also titled the "Regulatory Accountability Act", in the 113th Congress, on May 23, 2013. The HJC approved it on July 24, 2013. That bill was not passed as a stand alone bill. However, it was passed by the House as one part of a huge bill, HR 4 [LOC | WW], the "Jobs for America Act". The Senate, which was controlled by Democrats in the 113th Congress, did not pass either HR 2122 or HR 4.

Also, back in the 112th Congress, the HJC and the House, but not the Senate, passed HR 3010 [LOC | WW], the "Regulatory Accountability Act of 2011".

Rep. Goodlatte stated in the House debate that "Despite some encouraging recent signs, jobs have not truly recovered. Wages have definitely not recovered. The rate of new business startups has not recovered. Instead, permanent exits from the labor force are at historic levels, real wages have fallen, and dependency on government assistance has increased. People have been giving up because they can't find a confident path forward."

"What is killing the American Dream?", Rep. Goodlatte asked rhetorically. "More than anything else, it is the endless drain of resources that takes working people's hard-earned wages to Washington, and Washington's endless erection of regulatory roadblocks in the path of opportunity and growth."

He continued that this bill "addresses head on the problem of endlessly escalating, excessive Federal regulatory costs".

Rep. John Conyers (D-MI) argued in opposition that this bill "would seriously hamper the ability of government agencies to safeguard public health and safety, as well as environmental protections, workplace safety, and consumer financial protections".

Rep. Hank Johnson (D-GA) argued that "major regulations benefited the economy ... Regulations don't cause economic loss, ladies and gentlemen. Instead, they have produced billions of dollars in economic gains."

Rep. Peterson is a Democrat, and a cosponsor of the bill. He represents an agricultural district where farmers have reason to support application of the procedural requirements of this bill to the Environmental Protection Agency (EPA).

He said that this bill would create a more "transparent, and accountable regulatory process and give the American people a stronger voice in agency decision-making. Specifically, the bill requires agencies to choose the lowest cost rulemaking alternative, streamlines administrative hearings to provide for more stakeholder input, and provides for more judicial review of new agency regulations."

Members debated the merits of the current processes for enacting environmental, labor, Obamacare, and financial sector regulations. But, members did not debate the FCC rule making process.

Currently, the APA imposes few procedural requirements upon agencies. This bill would impose numerous new requirements. Indeed, the key section of the APA would be vastly expanded.

It would amend that APA, at 5 U.S.C. 553, to provide that "In a rule making, an agency shall make all preliminary and final factual determinations based on evidence and consider, in addition to other applicable considerations, the following: ... (1) The legal authority under which a rule may be proposed, including whether a rule making is required by statute, ... (2) Other statutory considerations applicable to whether the agency can or should propose a rule or undertake other agency action ... (3) The specific nature and significance of the problem the agency may address with a rule (including the degree and nature of risks the problem poses and the priority of addressing those risks compared to other matters or activities within the agency's jurisdiction), whether the problem warrants new agency action, and the countervailing risks that may be posed by alternatives for new agency action ... (4) Whether existing rules have created or contributed to the problem the agency may address with a rule and whether those rules could be amended or rescinded to address the problem in whole or part ... (5) Any reasonable alternatives for a new rule or other response identified by the agency or interested persons ... (6) ... the potential costs and benefits associated with potential alternative rules ... including direct, indirect, and cumulative costs and benefits and estimated impacts on jobs (including an estimate of the net gain or loss in domestic jobs), wages, economic growth, innovation, and economic competitiveness ..."

This bill would impose further requirements for the promulgation of any "major rule", "high-impact rule", "negative-impact on jobs and wages rule", or "rule that involves a novel legal or policy issue".

The bill defines a "major rule" as one that Administrator of the OMB's Office of Information and Regulatory Affairs (OIRA) "determines is likely to impose ... annual cost on the economy of $100,000,000", that the OIRA "determines is likely to impose ... a major increase in costs or prices for consumers", or that the OIRA "determines is likely to impose ... significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets".

The bill defines a "high impact rule" as one that the OIRA "determines is likely to impose an annual cost on the economy of $1,000,000,000 or more".'

Currently, Section 553 requires publication in the Federal Register of a "notice of proposed rule making" or NPRM. Under this bill, the major, high profile, and related rulemakings would also require an "advance" NPRM, issued at least 90 before the NPRM. This bill also enumerates requirements for the contents of this ANPRM. It also enumerates several prerequisite findings that must precede the issuance of an NPRM.

This bill also expands the range of agency actions that are subject to judicial review. For example, it makes certain interim rules reviewable.

This bill also addresses how agencies issue major guidance and guidelines.

The bill also addresses judicial deference to agencies.

It provides that the "court shall not defer to the agency's ... interpretation of an agency rule if the agency did not comply with the procedures of section 553 or sections 556-557 of chapter 5 of this title to issue the interpretation". Nor shall the court defer to the agency's "determination of the costs and benefits or other economic or risk assessment of the action, if the agency failed to conform to guidelines on such determinations and assessments established" by the OIRA. Nor shall the court defer to any agency guidance or any agency "determinations made in the adoption of an interim rule".

The bill would not affect court deference to an agency's interpretation of the statute that it relies upon as authority for promulgating the rule under review.

This bill would not amend 5 U.S.C. 554, which pertains to agency adjudications.

The FCC conducts license transfer proceedings that resemble antitrust merger reviews, but are often used to impose conditions upon the merging entities that resemble rules. Yet, these are adjudications, not rulemakings. This bill, if enacted into law, would not impact back door rulemakings such as these.

In the final analysis, it is highly unlikely that this bill will be enacted into law in the 114th Congress. It has already been passed by the House. Also, there are likely enough votes to pass this bill on an up or down vote in the Senate. But, the key circumstance is that President Obama would almost certainly veto it, because it would undermine his ability to act unilaterally in a wide range of policy areas, and there would not be enough votes in either the House of Senate to overcome that veto.

In This Issue
This issue contains the following items:
  Sen. Heller Again Introduces FCC Process Reform Act
  FCC Consolidated Reporting Act Re-Introduced
  House Again Passes Regulatory Accountability Act
  Rep. Latta Introduces Bill to Require FCC to Analyze Costs and Benefits in Rulemakings
Washington Tech Calendar
New items are highlighted in red.
Monday, February 16

Washington's Birthday. This is a federal holiday. See, Office of Personnel Management's (OPM) 2015 calendar of federal holidays.

The House will not meet the week of February 16-20, except for pro forma sessions. See, 2015 House Schedule.

The Senate will not meet the week of February 16-20, except for pro forma sessions. See, 2015 Senate Schedule. It will meet in pro forma session at 4:45 PM.

Day two of a four day event of the National Association of Regulatory Utility Commissioners (NARUC)". See, notice. Location: Renaissance Washington Hotel, 999 9th St., NW.

Tuesday, February 17

The House will meet at 2:00 PM in pro forma session only.

The Senate will not meet.

Day five of a six day conference of the National Association of Regulatory Utility Commissioners (NARUC). See, notice. Location: Renaissance Washington Hotel, 999 9th St., NW.

10:00 AM - 12:00 NOON. The New America Foundation (NAF) will host a panel discussion titled "Community College Online". Free. Open to the public. Live webcast. See, notice. Location: NAF, Suite 400, 1899 L St., NW.

11:00 AM - 12:00 NOON. The American Bar Association's (ABA) Section of Antitrust Law will host a webcast panel discussion titled "The 114th Congress -- Antitrust Outlook". The speakers will be James Burns (Dickinson Wright), Anant Raut (Counsel, Office of Sen. Chris Murphy), Kristin Dunham (Counsel, Senate Judiciary Committee), Anthony Grossi (Counsel, House Judiciary Committee), Matthew Owen (Chief Counsel, SJC), James Park (Minority Counsel, HJC). The price varies from free to $25. No CLE credits. See, notice.

1:00 PM. Outgoing Attorney General Eric Holder will give a speech. Location: National Press Club, 529 14th St., NW.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "Attorney's Fees, Costs and Other Fee-Shifting Measures in Patent and Trademark Litigation". The speakers will be Andrew Williams, Kara Fussner, Naomi Jane Gray, and Jared Hedman. The price ranges from $150 to $195. CLE credits. See, notice.

Wednesday, February 18

The House will not meet.

The Senate will not meet.

Day six of a six day conference of the National Association of Regulatory Utility Commissioners (NARUC). See, notice. Location: Renaissance Washington Hotel, 999 9th St., NW.

12:15 - 3:00 PM. The New America Foundation (NAF) will host an event titled "Technology for the People, By the People". The speakers will address "strategies that government and technology sectors should be using" to promote education and employment of "women and people of color" as STEM professionals. The speakers on the first panel will be Alan Davidson (NAF), Megan Smith (EOP), Jessica Rosenworcel (FCC Commissioner), Aliya Rahmen (Code for Progress), and Anne-Marie Slaughter (NAF). The speakers on the second panel will be Georgia Bullen (NAF), Mariella Paulino (Code for Progress), Tom Conner (Motley Fool), and Mona Abdel-Halim ( Free. Open to the public. Lunch will be served. See, notice. Location: NAF, Suite 400, 1899 L St., NW.

2:00 - 3:30 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "Hot Developments with the Telephone Consumer Protection Act". The panel will discuss the FTC's Telemarketing Sales Rule (TSR), Do Not Call (DNC) jurisdiction, state analogues to the TSR, and the jurisdictional differences between the FTC and FCC with regard to robocalls and pre-recorded messages. The speakers will be Kurt Schroeder (Chief of the FCC's Consumer Policy Division), Thomas Cunningham (Locke Lorde), Abbas Kazerounian (Kazerouni Law Group), Christine Reilly (Manatt Phelps & Phillips), and Daniel Blynn (Venable). The price varies from free to $25. No CLE credits. See, notice.

Thursday, February 19

The House will not meet.

The Senate will meet at 10:00 AM in pro forma session only.

9:30 - 11:45 AM. The Center for American Progress (CAP) will host an event titled "Balancing Interests and Values in Foreign Policy U.S. and Japanese Approaches". The speakers will be Hitoshi Tanaka (Japan Research Institute), Derek Chollet (German Marshall Fund), Vikram Singh (CAP), Christel Eberhard (Monitor 360), Maiko Ichihara (Kansai Gaidai University), Frank Jannuzi (Mansfield Foundation), and Brian Harding (CAP). See, notice. Location: CAP, 10th floor, 1333 H St., NW.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast panel discussion titled "Cybersecurity and Understanding the Practice Setting: Government and Public Interest". The speakers will be Clark Walton and Timothy Edgar. The prices varies from $80 to $195. CLE credits. See, notice.

6:00 - 8:30 PM. The American Bar Association (ABA) will host an on site and teleconferenced event titled "Legal Career Paths in Export Controls and Economic Sanctions". The speakers will be Andrea Gacki (Department of the Treasury, Office of Foreign Assets Control), Christine Lee (United Technologies Corporation), Sara Heidema (Department of State, Office of Defense Trade Controls Policy), Parvin Huda (DOC, Bureau of Industry and Security), Monica Mason (NCR Corporation), Ama Adams (Baker Botts), and Darren Riley (Huffman Riley). The event is free for in person attendance, and $15 for the teleconference. No CLE credits. See, notice. Location: Steptoe & Johnson, 1330 Connecticut Ave., NW.

Friday, February 20

The House will meet in pro forma session only.

The Senate will not meet.

Supreme Court conference day. See, 2014-2015 calendar. Closed to the public.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in CBS v. FCC, App. Ct. No. 14-1242. This is a petition for review of the FCC's November 10, 2014 protective orders regarding access to confidential video programming contracts in pending merger review proceedings involving (1) Comcast and Time Warner Cable and Charter Communications and (2) AT&T and Directv. See, brief of the FCC. This case is the first of three on the Court's schedule. Judges Tatel, Srinivasan, and Wilkins will preside. Location: Prettyman Courthouse, 333 Constitution Ave., NW.

Monday, February 23

The Senate will meet at 3:00 PM. It is scheduled to resume consideration of HR 240, the Department of Homeland Security (DHS) appropriations bill.

Rep. Latta Introduces Bill to Require FCC to Analyze Costs and Benefits in Rulemakings

2/2. Rep. Bob Latta (R-OH) and Rep. Gus Bilirakis (R-FL) introduced HR 655 [LOC | WW], the "FCC 'ABCs' Act of 2015". This bill would require that the Federal Communications Commission (FCC) conduct an analysis of benefits and costs (ABCs) during a rule making proceeding.

This bill would also, in forbearance proceedings before the FCC, create a rebutable presumption that the conditions for forbearance have been met, and set the standard of clear and convincing evidence for overcoming that presumption.

The bill was referred to the House Commerce Committee (HCC). Rep. Latta and Rep. Bilirakis are members.

Cost and Benefits Analyses. This bill provides that before the FCC may adopt a rule "that may have an economically significant impact", it "shall include in the notice of proposed rule making or final rule, respectively, an analysis of the benefits and costs of the proposed or final rule that demonstrates that the benefits outweigh the costs".

The bill defines the term "economically significant impact" as "an effect on the economy of $100,000,000 or more annually or a material adverse effect on the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities".

Presumption in Forbearance Proceedings. The bill also amends the forbearance section of the Communications Act, which is codified at 47 U.S.C. 160.

This section currently provides that the "shall forbear from applying any regulation or any provision of this chapter to a telecommunications carrier or telecommunications service, or class of telecommunications carriers or telecommunications services, in any or some of its or their geographic markets, if the Commission determines that --- (1) enforcement of such regulation or provision is not necessary to ensure that the charges, practices, classifications, or regulations by, for, or in connection with that telecommunications carrier or telecommunications service are just and reasonable and are not unjustly or unreasonably discriminatory; (2) enforcement of such regulation or provision is not necessary for the protection of consumers; and (3) forbearance from applying such provision or regulation is consistent with the public interest."

Biennial Regulatory Reviews. In addition, this bill provides that, in biennial regulatory reviews conducted pursuant to 47 U.S.C. 161, the FCC "shall presume, absent clear and convincing evidence to the contrary, that the regulation is no longer necessary in the public interest as the result of meaningful economic competition between providers of telecommunications service".

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