O'Rielly Plans to Leave FCC by Year's End

Senate Commerce Committee Republicans are warming to Nathan Simington, President Donald Trump’s nominee to replace O’Rielly. They lack a clear timeline for a confirmation hearing or advancing the pick. Communications Subcommittee Chairman John Thune of South Dakota told us he plans to meet with Simington later this week. Other committee Republicans are eyeing meetings with Simington, including Dan Sullivan of Alaska. Thune and other Senate Commerce GOP members participated in a bid to convince Trump to re-up O’Rielly (see 2008060062).

Senate Commerce Chairman Roger Wicker, R-Miss., told us he and Simington “had a very productive and cordial meeting” last week (see 2009280038). “I intend to be supportive” of Simington moving forward, given the results of that meeting, Wicker said. “I don’t have a timeline” yet for advancing the nominee, as “there are still things in the works” that must be completed before Commerce can schedule a hearing or vote, including a background check. Sen. Mike Lee, R-Utah, met with Simington Tuesday, a spokesperson said.

O’Rielly’s concession is unlikely to specifically prompt Wicker to accelerate Senate Commerce’s timeline for considering Simington, because the nominee’s prospects now appear to be closely tied to the outcome of the presidential contest between Trump and Democratic nominee Joe Biden, lobbyists told us. Wicker will likely move to advance Simington if Trump wins but is unlikely to proceed if Biden does, the lobbyists said. Wicker and Senate Majority Leader Mitch McConnell, R-Ky., will play a larger role in choosing a GOP replacement for O’Rielly if Biden wins because they won’t have to defer to Trump’s preferences, lobbyists said.

Commissioner Brendan Carr said he met with Simington; he declined to comment on Simington's likely priorities as a commissioner. "He would be a great colleague at the FCC ... a great addition to the team," Carr said during a news conference. Asked about Simington discussions, Chairman Ajit Pai's office didn't comment.

O'Rielly Remarks

"I have truly enjoyed my time at the commission and been humbled to serve our great country," O'Rielly said. He said Pai "packed" the meeting with agenda items he had championed. Asked about the announcement's timing and possible jobs, O'Rielly's office didn't comment. Our Freedom of Information Act request seeking information on any such recusals is pending.

Pai said O'Rielly served "with great honor and distinction" on a wide range of issues such as fee diversion and kidvid. "I'm proud to call you a colleague and even prouder to call you a friend," Pai said. Other commissioners said similar. "So many items have your thought leadership and have been animated by you," Commissioner Geoffrey Starks said, noting that as new fathers, he and O'Rielly had shared numerous personal talks about "working and dad-ing at the same time."

O'Rielly also got praise from the communications universe. "A true public servant. One of the best," tweeted NAB General Counsel Rick Kaplan.

O’Rielly praised the Trump administration. He appreciated the “momentous effort” of National Economic Council Director Larry Kudlow and the White House on the 3.5 GHz item (see 2009300034) and gave the administration “all due credit” for the executive order that sparked Wednesday’s Team Telecom item.

O’Rielly also criticized aspects of the White House’s work. “That is not to suggest the executive order is perfect,” he said. “There are things I would've done differently.”

Another executive order asked NTIA to petition the FCC regarding an internet platform safe harbor law. Pai declined to go into details. Asked by us and other reporters Wednesday about timing for a commission decision and what considerations he will take into account in weighing in any action, Pai noted comments have been received and staff will review the matter.

Meeting Notebook

Wednesday meeting's livestream had technical difficulties just under two hours after it started, and Pai considered approving the remaining items on circulation, according to a text transcript generated on the FCC Live webpage while the video and audio were frozen and unavailable. The meeting -- entirely conducted virtually -- had to be paused for about half an hour to address the malfunction. The FCC Live page transcribes audio from FCC meetings as they take place and, while the glitch was happening, showed Pai consulting with General Counsel Tom Johnson and other agency staff about legal and technical workarounds. Johnson told Pai it may not be legal for the FCC to continue the meeting without the public able to observe, and Pai asked about switching to the audio-only format of previous pandemic-era FCC meetings. “I guess we could circulate an ad hoc notice,” the transcript showed Pai saying. “We were making such good time.” The transcript showed FCC staff mentioning a Comcast service upgrade and issues with connectivity to YouTube as related to the malfunction. The FCC didn’t respond to requests for comment. “It’s the nature of the beast, I’m afraid.” Pai said on the transcript. Longtime communications attorney and Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman didn’t think the streaming problems were a significant issue but noted the Sunshine Act requires FCC votes to be witnessed by the public. “If Zoom crashes and the public can't witness or hear a vote, it is probably unlawful,” he said. “The general counsel was correct to make sure that formal votes are conducted only when the public can witness them." The FCC’s meeting stream experienced similar glitches in February (see 2002280054). The agency responded to our FOIA request on the matter with no documents. We continue seeking details.

An order on streamlining the process for executive branch review of FCC applications involving foreign ownership was approved 5-0, as expected (see 2009290063). The revised rules, which include specific timelines and standardized questions, will help the agency “strike the right balance” between security concerns and encouraging beneficial foreign investment, said Pai. O’Rielly, who has complained about the Team Telecom -- referring to DOD, DOJ and the Department of Homeland Security -- process, called the FCC action and related executive order a “clear victory.” He was also critical of aspects of both. “There are things I would have done differently, such as including a more definitive and objective standard for starting the review clock, shortening the review periods even more, and limiting the ability of the new Committee to review previous decisions,” O’Rielly said. The agency should do more, said Commissioner Jessica Rosenworcel: “The FCC must continue to monitor and engage with carriers once they are authorized to operate in the United States.” She praised ongoing FCC national security reviews of China Telecom Americas, China Unicom Americas, Pacific Networks and ComNet. “We should complete these national security reviews as soon as possible,” she said. Starks said the agency should “take a closer look” at undersea data cables with landing locations in “adversary countries” such as China. He said the agency should form an interbureau task force for national security matters. "This order keeps Team Telecom resources directed squarely on its mission -- identifying and evaluating foreign threats to our network services and infrastructure," said USTelecom President Jonathan Spalter. "The Commission should use its discretion to implement its reforms immediately in order to make the review process more efficient.”

The FCC voted 5-0 to fine Hawaii carrier Sandwich Isles Communications and its principals $49.6 million for USF violations. Albert Hee, who controlled Sandwich Isles and parent company Waimana Enterprises, used corporate funds to pay over $4 million in personal expenses including massages, travel, tuition and a car and house for his children, said an FCC news release. “Sandwich Isles also used Universal Service support to pay Waimana inflated rent and management fees as well as unjustified bonuses to Hee,” the agency alleged. The matter came to the FCC’s attention after Hee was convicted of tax fraud in 2015, the release said. Sandwich Isles' ability to receive USF support was eliminated in 2016, the release said. The agency “took action to recover” $27 million in USF fees received by Sandwich Isles and calculated a fine for Hee and his companies based on penalties for each day of violations between 2010 and 2013. “This was no accounting error or honest misunderstanding of the Commission’s rules,” said Pai. “It was a willful effort to defraud the Universal Service Fund -- essentially, all taxpayers -- for private gain.”

Carr had no update on whether the next wireless infrastructure changes will be teed up at the Oct. 27 meeting (see 2009290062), he told reporters. Compound expansions are “an important issue,” he said in response to our query. “There’s more we can do from an infrastructure perspective that’s going to allow robust cellsites that are needed to either expand capacity or support capacity.” Carr said the FCC isn’t feeling time pressure to act on a handful of big items in coming months. “There’s a lot that we’re doing, there’s a lot that we continue to do, irrespective of the timing of any election,” he said. “It’s hard to dispute” that Pai and other Republicans “have been sort of sprinting from the get-go,” he said. Carr acknowledged the FCC faced resistance on spectrum issues from other agencies. When Democrats were in charge, “the agency pulled its punches and didn’t even sort of propose to go forward on 5.9” or other bands, he said.

Commissioners OK'd a draft order 5-0 amending the 30-day cable channel lineup notification rule, as expected (see 2009160016). Carr said the approval makes "common-sense changes to the rules that didn't quite line up with practical reality." Rosenworcel said the rule requiring cable operators warn their subscribers about possible failed carriage negotiations 30 days in advance of their possible failure "had its merits but also leads to consumers getting way more of these notices than necessary, and that can be confusing." Starks said he "will be watching to make sure that the changes ... will in fact protect ... consumers through notice provided as soon as possible."