Undermining transparency at the FCC

Nancy Pelosi famously said about the Affordable Care Act, “We have to pass the bill so you can find out what is in it.” That would be a generous description of business-as-usual at the Federal Communications Commission (FCC). It can take weeks, and sometimes months, for the commission to release an order they voted on. Even worse, the published and enforceable order is not what the commissioners voted on — it’s some version of it that hasn’t seen sunlight until the day it shows up in the Federal Register.

Unfortunately, this process is standard operating procedure at the FCC. Commissioners negotiate on a not-yet-public order up until it’s time to vote at an open meeting. Immediately prior to the vote, the staff asks for “editorial privileges to finish writing the order at some later date. Keeping confidential the text of the order up for vote and granting editorial privileges prior to a vote is so common that it has become utterly unremarkable. Yet its expected presence at every open meeting undermines procedures intended to make the commission and its rule-making processes transparent.

{mosads}The FCC rule-making process involves several stages. A Notice of Proposed Rulemaking (NPRM), such as the recent one on net neutrality that generated protests and a hilarious rant by John Oliver, is not a final order. Therefore, granting editorial privileges is harmless at this stage: No matter what is added to the document after the vote, it will become public and there will be time for comment long before it becomes a regulation, so the incentives to make inappropriate changes are small.

But a passing vote on a final order creates new regulations with real effects on industries and consumers. Because the FCC does not publish any text of a final rule before the commissioners vote, the public has no reliable way to know whether differences in the final rule relative to the NPRM reflect changes made before the vote or after through the use of editorial privileges.

The key question is whether the absence of a public text of what the commissioners voted on plus editorial privileges allows for substantive changes in the order or simply fixing typos. To be sure, it’s unlikely that major changes that have large, noticeable effects have ever been silently added after the vote. It’s also unlikely that dedicated FCC staffers would intentionally make changes that contradict their understanding of the commissioners’ preferences.

Nevertheless, it would be natural for commissioners’ staff to make edits consistent with their boss’s preferences regarding an order. Small changes can tilt rules to favor or disadvantage different groups enough to be valuable to someone but not enough to cause an uproar. Such changes should not be possible to make in the shadows. Commissioners are supposed to sign off on changes during this process, but are unlikely to have the resources to vet each and every change made between vote and publication.

Consider recent reforms to the Universal Service Program’s High-Cost Fund, now called the Connect America Fund. The NPRM for that reform requested comments on whether the fund should be capped, citing concerns about its growth. And, indeed, the final order set a cap of $4.5 billion a year. However, it also mandated that the FCC never collect less than $4.5 billion annually for the program. A floor was not discussed in the NPRM or the open meeting, but a couple of sentences and a footnote in the final order mean that the FCC is now accumulating a reserve fund to the tune of more than a half billion dollars a year.

Did the commissioners vote for a floor on tax collection or was it added after the vote? If it was added afterwards, did they all know about this addition? Given the absence of any written record of what the commissioners actually voted on, and the three-week delay in publication of the order following the vote, there is simply no way to know. This lack of transparency is inconsistent with good governance.

The claims that not releasing the text on which the commissioners voted and that granting editorial privileges are necessary because commissioners negotiate until the last minute are not valid justifications. Commissioners negotiate until the last minute because they know nothing is released to the public until some indefinite time after the vote. If the commission were required to reveal to the public precisely what they were voting on, they would wrap up their negotiations sooner.

Correcting errors prior to publication can be useful, but that, too, does not justify withholding the final draft subject to a vote and granting editorial privileges as a matter of course. In Congress, texts of bills up for vote are public and once the full Congress has voted, the text becomes law. Any drafting errors are sorted out later by courts or additional legislative action. Why should a regulatory agency behave differently?

One simple change to the FCC’s rule-making process would address the problem: For final orders, publish the text on which the commissioners will vote before the vote begins. The commission could still grant editorial privileges, but it would then be possible to see what has changed between the vote and the final, published rule.

Perhaps nothing untoward has ever happened due to editorial privileges. But “trust us” isn’t sufficient protection. Transparency is key to any regulator’s legitimacy. The disconnect between the public process of proposing and debating an order and the opaque transition to final, enforceable regulation needlessly obscures an otherwise open process.

With this additional transparency, the next time crowds gather to protest an FCC vote we can be happy that we live in a country that guarantees their right to protest as well as their right to know exactly what they are protesting.

Wallsten is vice president for research and senior fellow at the Technology Policy Institute.

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