Panel Debates Changing FCC Structure
The Progress & Freedom Foundation (PFF) released a report recommending FCC restructuring and sponsored a panel of lawyers and scholars who had other ideas on how to change the agency. “If you ask 50 telecom lawyers how to restructure the FCC, you'll get 50 answers,” said an audience member afterward. Sen. DeMint (R-S.C.), however, told the audience the chances of such change are small, given the changeover in congressional leadership.
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PFF recommended turning the FCC into 2 agencies: (1) A rulemaking body run by a single administrator and located in the executive branch. (2) A multimember Commission similar to the current FCC that would handle enforcement and adjudication. The report was the last in a series presented by PFF’s 2-year Digital Age Communications Act (DACA) project recommending ways to regulate communications.
Randolph May, co-chmn. of a working group that looked at the FCC’s structure, said the “split agency” proposal would make the rulemaking body more “politically accountable.” A one-person agency could act more quickly and consistently than the FCC, and the smaller size would be in keeping with other DACA recommendations to reduce the FCC’s rulemaking functions, he said. The other agency, handling adjudication, should be free of political control and structured like the FCC as an independent agency, he said. Another benefit of putting the rulemaking body in the executive branch, said May: “The Sunshine Act no longer would apply to the decisions of a single administrator.”
DeMint told PFF to “keep it up” despite the Hill’s change from Republican to Democratic control. In a speech at the beginning of the panel, he said the DACA project attempts to “shift the paradigm from micromanaging” the communications industry to one based on enforcement. “We're in the minority now” so chances of PFF’s proposals being adopted soon are “slim,” he told the predominantly conservative group. But the project offers a long-term view of where the govt. should go to “create a global communications structure,” so “let’s not diminish the vision because we think it will be delayed,” DeMint said.
Some Democrats were elected “on conservative principles” and may have a similar “vision,” DeMint said. Answering a question, DeMint said he didn’t think Democrats have enough strength on the Hill to pass legislation on controversial issues like net neutrality. “More of our strategy now will be to play defense.”
“I don’t see how it [FCC structure] will be better with a single administrator,” said Stanford U. Prof. Roger Noll. The idea “isn’t bad; it just won’t do much” because the underlying Telecom Act “is flawed,” he said: “So no matter who is put in charge, flawed policy” will result. May responded later that the concern about bad legislation is an argument for putting the agency in the executive branch, which offers “a different type of accountability.” Asked by an audience member about his view on conflicts in state and federal regulation, Noll said “if you are going to have deregulation, you have to assert federal jurisdiction.”
“I'm a little skeptical of DACA’s split model” because it could lead to “jockeying between the 2 agencies,” said telecom lawyer Jonathan Nuechterlein. “Simplicity is better than complexity,” so one agency may be better than 2, he said. The question is whether it should be independent or in the executive branch, he said. “An independent agency breeds intrigue [and] log rolling” and doesn’t easily offer “determinacy” -- letting industry know what the rules are, he said.
“When I was at the FCC I had this fantasy that I would bring in [management consultants] McKinsey and charge them with fixing this dysfunctional agency,” said Nuechterlein. Basing salaries on meeting goals could improve the agency, he said. “What if Congress set deadlines for all sorts of proceedings” including tough ones such as intercarrier compensation and “your pay would be determined on getting them done in a year,” he suggested.
Nuechterlein said state and federal rules must be reconciled because “fragmented” regulation is “no way to run an industry that accounts for a large part of the economy.” Similarly, the “diffusion of federal power” over spectrum management should be fixed, perhaps by giving the power to NTIA, he said. Nuechterlein also supported eliminating separate merger reviews by DoJ and the FCC, which the DACA project has recommended giving solely to DoJ.
Moving the FCC’s functions to the FTC might be the solution, lawyer Bryan Tramont said. The best approach would be to move “pieces of the FCC” one at a time to the FTC as competition eliminates the need for FCC involvement, he said. Tramont said he was leery of DACA’s split agency approach because it could create “tension that would be hard to overcome.” It also doesn’t eliminate “the sector-specific nature of regulation in telecom.” Tramont said things aren’t as bad at the FCC as some may think. Most FCC decisions are made in 12-18 months, and most votes are unanimous, he said.