FCC Order Streamlining Formal Complaint Rules Sparks Flap Over Informal Complaint Changes

Chairman Ajit Pai told reporters there are no "substantive" changes to the informal complaint process and said the FCC simply codified existing practices. He noted the informal complaint procedural changes followed up on a September NPRM and were in a June 21 draft order. Enforcement Bureau Chief Rosemary Harold said staffers currently attempt to resolve consumer informal complaints against companies and will continue.

Shortly after Rosenworcel signaled her dissent, Pai engaged in unusual Q&A with Harold to tamp down concerns about the changes that officials previously said Wednesday were akin to fake news (see 1807110039). Commissioner Mike O'Rielly also participated, asking Harold to repeat her assertion that the status quo would continue.

Rosenworcel told reporters she believed there was an agreement Wednesday night "to fix this mess" by taking out the informal complaint changes. Shortly before the meeting, she said, the Republican majority decided to keep the language and make other edits to the draft. Before the vote, she objected to receiving a final draft just a few minutes earlier, while other items were voted on.

Asked about the last-minute discussions, a Pai spokesperson emailed: "The Chairman returned from the ITU’s conference in Geneva last night and decided that conforming the text of the rule to longstanding agency practice was the right course of action, as had been proposed in the NPRM that was approved unanimously last September. While he is happy to engage in good-faith negotiations in order to achieve unanimous votes, he doesn’t believe that changes to Commission items should be made solely as a result of misinformation. That is why the language that was adopted today on informal complaints is the same as was publicly released three weeks ago.” O'Rielly and Brendan Carr wouldn't discuss the last-minute talks, though O'Rielly said Enforcement Bureau staff assured him the process wasn't going to change.

The order harmonizes procedures for formal complaints against common carriers, regarding pole attachments and concerning the accessibility of telecom and advanced communications services and equipment for people with disabilities, said a release. The different procedures have sometimes "produced confusion and inconsistent results," said Pai. The release said the new formal complaint rules require defendants to answer complaints within 30 days, with complainants given 10 days to reply; apply a uniform approach to discovery; require "executive level" prefiling settlement discussions in all proceedings; codify EB practice of providing staff-supervised mediation to parties seeking settlements; and commit the FCC to "the goal of meeting a 270-day shot clock" for resolving complaints, except for those with shorter deadlines, such as pole attachments (180 days).

Carr said more uniformity "will provide certainty to stakeholders while helping the Enforcement Bureau conduct efficient reviews as they work under tight statutory deadlines." O'Rielly thanked Pai for working with him to "maintain transparency and efficiency provisions pertaining to pole attachments," and said many elements of the new rules should replace the agency's administrative law judge process, "fraught with pitfalls."

Dissent, Q&A

Rosenworcel said the FCC receives 25,000-30,000 informal complaints monthly, with the agency's long-standing practice to study the complaints, determine what happened, and then work with providers to fix consumer problems. "But for reasons I do not understand, today's order cuts the FCC out of the process. Instead of working to fix problems, the agency reduces itself to merely a conduit for the exchange of letters between consumers and their carriers. Then, following the exchange of letters, consumers who remain unsatisfied will be asked to pay a $225 fee to file a formal complaint just to have the FCC take an interest. ... I believe we should be doing everything within our power to make it easier for consumers to file complaints and seek redress. This decision utterly fails that test."

Pai engaged Harold in a choreographed exchange before the vote. Harold said the changes codify the existing practice; wouldn't prevent the agency from taking enforcement action based on an informal complaint; and wouldn't force consumers to pay $225 to file complaints. Rosenworcel interjected at the end, "I disagree."

The new Section 1.717 rule says: "The Commission will forward informal complaints to the appropriate carrier for investigation and may set a due date for the carrier to provide a written response to the informal complaint to the Commission, with a copy to the complainant. The response will advise the Commission of the carrier’s satisfaction of the complaint or of its refusal or inability to do so. Where there are clear indications from the carrier’s response or from other communications with the parties that the complaint has been satisfied, the Commission may, in its discretion, consider a complaint proceeding to be closed. In all other cases, the Commission will notify the complainant that if the complainant is not satisfied by the carrier’s response, or if the carrier has failed to submit a response by the due date, the complainant may file a formal complaint in accordance with § 1.721 of this part."

That tweaked the previous rule, including by giving the FCC discretion to set a due date for carrier responses, and by removing references to FCC "review" and "disposition" of matters. Asked by a reporter about the "disposition" removal, Harold called that "legalistic" language that could suggest FCC actions. She said informal complaints currently are usually sent to the Consumer and Governmental Affairs Bureau, which seeks a response from the company. If that doesn't resolve the concern, she said, the matter is sent to the Enforcement Bureau, which works with the parties to try to resolve the concern. She said she doesn't expect that practice to change, and believes most consumers don't want to file formal complaints due to the difficulty.

Criticism

Some continued criticizing the change, including the two House Democrats whose letter to the FCC prompted the attention to the tweak. House Commerce Committee ranking member Frank Pallone, D-N.J., and Communications Subcommittee ranking member Mike Doyle, D-Pa., wrote Pai Tuesday to voice concern (see 1807100069).

Doyle pushed back further Thursday before the FCC vote, saying in statement that “the spin coming out of the FCC does nothing to change the fact that [Pai] is proposing to modify the informal complaint rules in a way that would hurt consumers.” A House Commerce Democratic aide said that “we strongly disagree with Pai’s office’s characterization,” emphasizing nixing language on “review and disposition of the matters” complainants raise would strike at the heart of the FCC's informal review process.

Pallone and Doyle later slammed the vote and pushed back against the commission's interpretation of the order. “Today’s rollback of key consumer protections will harm Americans who may now need to pay the FCC a $225 fee to do its job,” they said in a statement. “Consumers -- particularly vulnerable populations -- will be worse off as a result of the FCC’s latest anti-consumer rule.” The agency “has a duty to protect American consumers, which [Pai] has ignored time and time again,” the lawmakers said.

Among meeting attendees, Free Press Policy Director Matt Wood told us he worries the changes would let the agency scale back its involvement in the complaint process.

Meeting Notebook

O’Rielly said after the meeting he has made long-awaited recommendations to Pai on the 3.5 GHz citizens broadband radio service band. The opening of CBRS has been stalled and O’Rielly was tasked with developing an alternate proposal to Obama-era rules, addressing the size of priority access licenses that will be sold as part of the three-tier band. “I’m in the process of relaying my recommendations to the chairman, and then I’ll have a conversation with him on next steps,” O’Rielly said. “We’re hopefully coming to a conclusion after many, many, many months.” Rosenworcel said opening the band has taken years too long. “The proposals for 3.5 are now 3 years old,” she said. “It’s a shame that we have sat for three years … and don’t understand why it’s taking so long.” The FCC was known in the past for its innovation on spectrum, she said.

Commissioners approved an order 4-0 streamlining Part 22 rules, as expected (see 1807110057). It's part of the agency’s ongoing focus on cutting what it calls unnecessary regulation. The main focus is the 800 MHz cellular band, the first used by carriers in the early days of the industry. “Today’s Order eliminates impediments placed upon Cellular service licensees as well as other Part 22 licensees,” the FCC said. “The revisions will streamline the Commission’s rules by reversing obsolete or unnecessarily burdensome rules, and they will allow licensees to focus resources on investment in new technologies and services to meet increasing consumer demand.” Pai said he has emphasized the importance of cutting unnecessary and outdated regulations: “We’re eliminating six such rules. Three of them impose antiquated administrative and recordkeeping burdens on a subset of wireless licensees.” Pai cited a requirement licensees maintain hard copies of various authorizations and make them available for inspection by the agency. “Given that license authorizations are now available electronically through the commission’s Universal Licensing System, this is pointless,” he said.

The FCC unanimously approved an order it said would help pave the way for nationwide number portability. The NNP order eases an "N-1" rule -- which requires the next-to-last carrier in a call flow, usually the long-distance provider in toll calls, to query a number portability database -- by allowing other carriers in the chain to make the database query, said a release: "This will open new opportunities for call routing as the industry prepares for nationwide number portability." It extends relief from interexchange dialing-parity requirements to all carriers, and to stand-alone long-distance services grandfathered in 2015, when ILECs received such forbearance. "This order matters," said Pai. "We’re clearing away outdated rules to enable creative thinking about how calls can be handled more efficiently. ... We’re aiming to implement NNP in a way that most benefits and least disrupts consumers."

Pai had little to say at the meeting on Dish Network spectrum beyond a letter the FCC Wireless Bureau sent the company Monday asking for details on its IoT network plans (see 1807100062). “The letter speaks for itself,” Pai said after the meeting. “We just wanted to gain additional facts.” The letter is aggressive but “in and of itself changes nothing,” New Street Research's Jonathan Chaplin told investors. “We have long been of the view that the Republican majority at the FCC will have a zero-tolerance policy towards [Dish Chairman Charlie] Ergen and DISH. If the company does not meet the four corners of the build out requirement, the FCC will act to take the license away.” MoffettNathanson’s Craig Moffett said that with the inquiry, Dish is under pressure. “It’s a Hollywood-worthy script (it’s a little more complicated than a Seinfeld episode),” Moffett wrote investors. “A multi-billionaire [Ergen] is risking everything to recapture the entrepreneurial glories of his early days in satellite TV. To succeed, our protagonist will have to navigate a murderers’ row of cord-cutting, groaning debt obligations, and an FCC buildout requirement that could render some of his most precious assets worthless."

Also during the meeting: A possible compromise on the draft kidvid NPRM didn’t materialize and the item was approved 3-1 1807120050; commissioners approved 4-0 an NPRM and order on opening the C-band 1807120037; and O’Rielly split with fellow FCC Republicans to partially dissent from an order on emergency alert testing and false warnings 1807120059.