Nelson Predicts July Markup for Thune’s FCC Reauthorization Draft Bill

“We are thinking that that’ll probably come up at the next markup,” Commerce Committee ranking member Bill Nelson, D-Fla., told us last week of FCC reauthorization, affirming the markup would be in July. Nelson dismissed the idea of any bigger concerns with the bill: “No, there were a couple things we were trying to iron out, but I can’t tell you off the top of the head what they were.”

A Senate staffer confirmed ongoing efforts to reach bipartisan consensus and advance the legislation for markup in July. Commerce Committee Chairman John Thune, R-S.D., who wrote the bill, announced in January his desire to formally reauthorize the FCC and anticipated advancing with legislation in late summer or fall (see 1502030039).

Thune told us in early June that an uncontroversial FCC reauthorization draft was well underway and focused on “transparency, budget, process issues” (see 1506040037). A 14-page draft bill from Thune began circulating among some industry officials around then (see 1506090061). That draft, which the committee has acknowledged is authentic, would have slated FCC appropriations for FY 2016 and 2017, figures unlisted in the draft, and included provisions on how the agency applies notices of apparent liability, mandated the creation of commission databases of items under consideration and on enforcement items and compelled a GAO report on regulatory fee structure. It would have modified the sunshine rules to let commissioners interact more easily.

The original draft would have required the FCC to “include in each notice of proposed rulemaking or order adopting a rule or amending an existing rule that may have an economically significant impact -- ‘(1) an identification and analysis of the specific market failure, actual consumer harm, burden of existing regulation, or failure of public institutions that warrants the proposed or adopted rule or amendment; and ‘(2) a reasoned determination that the benefits of the proposed or adopted rule or amendment justify the costs (recognizing that some benefits and costs are difficult to quantify), taking into account alternative forms of regulation and the need to tailor regulation to impose the least burden on society, consistent with obtaining regulatory objectives.'’’ The requirements would kick in a year after the legislation’s enactment, and “economically significant” means an effect at least $100 million annually or “a material adverse effect on the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.” The language is identical to what Sen. Dean Heller, R-Nev., included in the Senate version (S-421) of the FCC Process Reform Act reintroduced earlier this year.

The FCC reauthorization draft’s economically significant rulemaking provisions created debate within the Commerce Committee, provoking objections from Democrats who fear they would slow down agency processes, said a telecom industry lobbyist. A spokesman for Nelson declined further explanation of Nelson’s comments, saying doing so would be “premature” given ongoing net neutrality legislative negotiation between Republicans and Democrats.

One possible date circulating among industry lobbyists for the next committee markup is July 15. Commerce typically holds one markup a month, and its last occurred June 25. Commerce’s other big rumored item for July is a hearing on reallocation of government spectrum, initially anticipated for July 8 but more recently expected for July 22, with a possibility of postponement to July 29. The committee hasn't announced any hearings or markups for July. The Senate is in session through Aug. 7 before adjourning for a monthlong recess.

Language on economically significant rulemakings has been partisan before. In the House, Communications Subcommittee Chairman Greg Walden, R-Ore., referred to dealmaking wherein such economically significant rulemaking language he wanted was removed from the FCC Process Reform Act in exchange for including a one-year delay in implementation of that bill’s sunshine rule modification provisions, a rule change pursued by subcommittee ranking member Anna Eshoo, D-Calif. That measure passed the House Commerce Committee on a partisan basis earlier this year, lacking sections on economically significant rulemakings due to those initial compromise efforts. A House Commerce Committee GOP staffer recently said the House expects the Senate to take the lead on FCC reauthorization, though Walden circulated his own draft reauthorization bill earlier this year (see 1506180043).

“This section could undermine the FCC's ability to promptly respond to consumer harms,” said New America Open Technology Institute Policy Counsel Josh Stager, a former Democratic Senate staffer, of the language. Monday's “Supreme Court ruling in Michigan v. EPA demonstrates how such procedural requirements can be used to thwart agencies, so Democrats may be reluctant to saddle the FCC with additional process rules,” he said. The case, which the EPA lost in a 5-4 vote, involved whether that agency should have weighed costs in determining regulations for certain types of pollution.

“A requirement for this type of analysis of market failure and weighing of cost and benefits for major economically significant rules is standard fare for the executive branch agencies under longstanding executive orders that have been issued on a bipartisan basis,” said Free State Foundation President Randolph May, who has testified before Congress on FCC process overhaul. “There is a growing consensus that these analytical requirements should be applied to major rules proposed by the independent agencies. Requiring that rules be shown to be necessary and cost-justified should not be a partisan issue, and complying with these analytical requirements need not slow down the rulemaking process. In any event, under the APA [Administrative Procedure Act], in the event of a showing of good cause, the agency has the means to accelerate the process.”