Markey Says AT&T/T-Mobile Would Return Telecom to Duopoly

"This is going to be the biggest decision that you make, and I hope you make the right one,” Markey told commissioners. Approving the deal would return the industry to a duopoly, he said. “We've already got AT&T and Verizon pretty much dividing the country into Bell East and Bell West,” Markey said. “Letting them have a national wireless duopoly is what we've got at stake here.” Subcommittee Chairman Greg Walden, R-Ore., warned Markey to be careful about exerting influence over the FCC on the matter. Markey countered that members should be allowed to express their views on a deal.

Walden said he likely would have a hearing on the wireless deal. It probably won’t happen until the FCC record is complete, he told reporters. Ranking Member Anna Eshoo, D-Calif., urged the FCC to have field hearings on the transaction. The public outside Washington want to know how the deal will affect prices, Eshoo said: “It’s really important for you to hit the road.” Chairman Julius Genachowski said the FCC hasn’t announced a hearing schedule.

Several Republicans at the hearing said conditions should be specific to transactions. Commissioner Robert McDowell agreed, saying some conditions on Comcast’s purchase of control in NBC Universal had nothing to do with the deal. Commissioner Michael Copps said “it’s a hard line to draw” because some deals, like Comcast-NBCUniversal, “change the whole industry.” The FCC’s standard is the public interest, Genachowski said: “Sometimes there are specific potential harms that emerge from a transaction” that makes it “necessary to impose conditions."

The subcommittee’s FCC reform proposals don’t single out the current commission, Walden stressed at the hearing. Commission reform “is not, and should not become, an exercise in partisanship, or serve as a cloak to attack past or present commissions or chairmen,” Walden said. “At times, the FCC succumbed to practices under both Democratic and Republican chairmen that weaken decision-making and jeopardize public confidence.” To stop FCC policies from vacillating between open and closed, Congress should “codify best practices to ensure consistency from issue to issue, and commission to commission.” Walden listed seven items he’s considering, all of which appeared on a majority memo earlier this week (CD May 13 p6).

Walden didn’t give a time frame for any FCC reform legislation. Discussions are active and he expects to find common ground, Walden told reporters. It could be comprehensive or come in pieces, he said. Just raising the issues could cause change at the agency without legislation, he said.

Democrats cautioned against inadvertently hamstringing the FCC. “What would concern me would be proposals which diminish the commission’s ability to protect the public interest and preserve competition in the telecommunications marketplace,” said Eshoo. Congress should be careful not to create an “undue burden” on the agency or undermine “agency flexibility to act quickly and efficiently in the public interest,” said Commerce Committee Ranking Member Henry Waxman, D-Calif. Congress shouldn’t make procedural changes “in an attempt to address outcomes with which we don’t agree” and shouldn’t impose process changes exclusively on the FCC if they also could apply to other federal agencies, he said.

Some things are working well at the FCC, but there are opportunities to improve process, Eshoo said. She applauded reform efforts by Genachowski. Eshoo pushed for her bill (HR-1009) with Reps. John Shimkus, R-Ill., and Mike Doyle, D-Pa., to modify sunshine rules to allow three or more commissioners to meet privately. She also supported legislation to add an engineer or computer scientist to each commissioner’s staff.

The commissioner collaboration bill could move separately from other reforms, Shimkus said. “I think it’s something we can move expeditiously,” he said. “The public’s tired of comprehensive big bills,” though it’s possible the bill could be merged with other noncontroversial proposals, he said. Commissioners backed the bill. Genachowski supports it “as long as it preserves the transparency goals underlying the Sunshine Act originally,” he said. Copps, a longtime advocate of the proposed change, said past commissions may have dealt better with personality conflicts between commissioners had they been allowed to meet privately. McDowell agreed the change could speed FCC process.

A proposal allowing three FCC members to set the agenda without the chairman’s consent won support from Copps and McDowell, but not Genachowski or Commissioner Mignon Clyburn. Three commissioners other than the chairmen should have “power to call up an item, to delete an item from the agenda, and to edit any and all documents,” Copps said. McDowell agreed. In fall 2008, four commissioners found consensus on Universal Service Fund reform but couldn’t move forward due to objections by then-Chairman Kevin Martin, McDowell said. But Genachowski said that situation was an “anomaly” and no change to FCC process is needed. Clyburn said she had a good rapport with Genachowski and didn’t think such a change was needed to effect collaboration.

FCC members said they were open to shot clocks on agency proceedings. Shot clocks “can be an effective management tool,” but preserving flexibility is important, Genachowski said. While law already requires some shot clocks, “internally, we probably could use more,” McDowell said. They can be helpful, but a mandate isn’t necessary, Copps said. Clyburn said clocks are fine as long as they're treated only as guidelines. Rep. Cliff Stearns, R-Fla., noted the FCC has a large backlog of proceedings, some of them many years old. Genachowski acknowledged there may be “thousands,” some likely more than five years old. But he said “a lot of the backlog comes from applications for review of relatively routine bureau decisions that are made,” which require the agency to do its work “all over again."

McDowell backed a subcommittee proposal to require a market power analysis before new rules. If the FCC decides not to do one, it should explain why not, McDowell said. Genachowski said the commission does analysis in most cases, but sometimes doesn’t in public safety, disabilities and other special cases. Clyburn was open to the proposal, but said the commission is already doing economic analysis, even if it doesn’t always call it a market power test. Copps said the notice and comment period usually involves economic analysis.

Commissioners largely supported the idea of issuing notices of inquiry before notices of proposed rulemaking. Genachowski said he didn’t think a statutory change was required. And Clyburn said NOIs aren’t needed in some cases where the FCC has previously collected information. Commissioners also said they were open to suggestions to publish proposed rules in rulemakings, and have minimum comment periods, as long as the commission had some flexibility for special cases. Commissioners had some reservations about publishing final drafts of rules before adoption. Clyburn said she didn’t want to “stifle any type of exchange” to improve the rules. The Administrative Procedures Act process “works” as-is, Genachowski said.

Preventing FCC overreach is the No. 1 priority of Rep. Marsha Blackburn, R-Tenn., she said in an interview. (See separate report in this issue.) “The FCC is an agency in search of problems,” she said. Congress should rein in FCC authority by providing more definition of the scope of the agency’s authority, she said. Blackburn may put together legislation to better define FCC forbearance authority in the Telecom Act, said Joshua Lynch, aide to Blackburn. The bill would hew closely to recommendations in a recent editorial (CD April 20 p10) by Free State Foundation President Randolph May, Lynch said. It would provide an “evidentiary standard” for keeping regulations for which industry seeks relief, he said.

Rep. John Dingell, D-Mich., voiced “distress” over the delay in publishing the FCC’s December net neutrality order in the Federal Register, during the hearing. Dingell said he understood that the Office of Management and Budget is to blame. Delay between a rule’s adoption and its publication can allow policymakers to make last-minute revisions, he said. Genachowski said his commission usually releases orders to the public one to three days after adoption.

Eshoo and Doyle asked about FCC progress on special access. Genachowski said the commission is still collecting data and is on schedule, but he wouldn’t say when the FCC might be ready to move. The agency is moving “as fast as it can,” Genachowski said. Doyle also pressed the chairman on implementing community radio rules. Genachowski said the commission would implement “as quickly as possible” and Genachowski would “redouble [his] efforts."

Rep. Charlie Bass, R-N.H., urged FCC action addressing potential GPS interference arising from the LightSquared network. “There are significant potential issues with this that need to be aired, and I'm hopeful the commission will have a process that will allow for both sides in this debate to have their views considered and to ensure that a proper decision is made” by the FCC, Bass said. Walden is waiting to see independent lab analysis of the interference concerns, he told reporters. “There is a legitimate issue about what process was used in issuing the licenses to LightSquared."

Departing Commissioner Meredith Baker didn’t testify at the hearing, hewing to expectations. Her move to Comcast/NBCUniversal didn’t come up. “It is stunning that at a hearing about reforming the FCC no member of Congress raised the topic of Commissioner Baker’s recent rush through the revolving door into the open arms of Comcast,” said Free Press President Craig Aaron. “How can Congress preach transparency and accountability while willfully ignoring Commissioner Baker’s scandalous departure and absence at today’s hearing?”