Wheeler FCC Making Some Big Policy Calls on Delegated Authority
Under Chairman Tom Wheeler, the FCC has been approving what some observers see as a surprising number of big orders on delegated authority by the bureaus instead of by a vote of commissioners. The Media Bureau Dec. 20 approved Gannett’s $2.73 billion buy of Belo and Tribune’s $2.2 billion purchase of Local TV (CD Dec 23 p3). FCC officials said the Belo approval order was originally circulated as an order for a commissioner vote. The same day, the Wireless Bureau addressed Dish Network’s request for a waiver prior to January’s H-block auction (CD Dec 23 p1).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
In early December, FCC staff, not commissioners, granted pro forma approval of Verizon’s buy of Vodafone’s 45 percent of Verizon Wireless (CD Dec 5 p5). At $130 billion, the deal was the biggest wireless transaction in U.S. history. Two other big wireless mergers were also approved this year on delegated authority -- T-Mobile/MetroPCS under former Chairman Julius Genachowski and SoftBank’s buy of control of Sprint, under acting Chairwoman Mignon Clyburn. Current and former FCC officials told us use of delegated authority is a careful balancing act for any chairman and, while expedient, there’s sometimes a political price to pay.
"It’s certainly within the chairman’s prerogative as a matter of law to go ahead and use the tool of delegated authority, but it runs the risk of antagonizing his fellow commissioners if they think those matters deserve more scrutiny or attention or any changes,” said a former FCC official. “Delegated authority can be an effective way to get a lot done in a short period of time, but any chairman has to be careful about what price there is to pay in terms of his relationship with his colleagues.”
"I always appreciated when my colleague in the chairman’s office lets me know well in advance what they were considering to handle on circulation, why, and when,” said a former eighth-floor legal advisor. “Sometimes I agreed and other times I did not. Either way, that courtesy, which really is the number one skill requirement for the floor, went a long way."
Free Press Policy Director Matt Wood said his group asked the full FCC to decide the Gannett, Tribune and Sinclair TV station takeovers, which the group opposed. “Big broadcasters use shell companies and sharing agreements to evade the FCC’s ownership limits,” Wood said. “That practice deserves review by the full commission, not least because the bureau has raised concerns about it yet continued to approve such transactions. It’s not that delegated authority is in any sense improper much or even most of the time, but the full commission should direct policy and have a chance to answer important and novel questions decisively, whether in the first instance or on application for review of bureau decisions."
Free State Foundation President Randolph May, a former FCC associate general counsel, agreed use of delegated authority must be judicious. “There is certainly an important role for delegated authority to play in helping the agency to run efficiently and get its work done,” May said. “But the exercise of such authority is, indeed, a balancing act. While the lines obviously are not always clear-cut, matters that involve novel interpretations of law or that are non-routine because of their significant policy implications or their broader impact generally are more appropriately handled at the commissioner level. In my view, the Dish waiver might have fit into the non-routine category in light of the way the proffered minimum reserve price was tied to sought-after rules changes. But, in the final analysis, if commissioners believe that actions are being taken on delegated authority that should be acted on at the commission level, you would expect them to say so."
John Nakahata of Wiltshire Grannis, former FCC chief of staff, said “re-empowering” the bureaus to address matters on delegated authority “is essential to improving the FCC’s efficiency” and should be encouraged. “Too often in recent years, matters have been delayed for full commission consideration when they could have been addressed by the bureaus,” he said. “Of course, any chairman and the bureau chiefs have to take care not to surprise the other commissioners on matters that are significant, but significant from a news perspective is not the same as dealing with novel policy issues."
"My guess is all chairmen pick their spots with respect to delegated authority, depending on the issue at hand, circumstances and strategic imperative,” said Jeff Silva, analyst at Medley Global Advisors. “I don’t think this is an issue right now, but that could change in time. Those in the political ecosystem here will not shy about airing their angst if they come in time to believe too much artistic license is being taken on delegated authority. In fact, with this story, they've already succeeded in flagging the issue for Chairman Wheeler.”