Tuesday, May 25, 2010

Unreasonable Tactics, Reasoned Decisionmaking, and the Rule of Law at the FCC

Over the past decade or so, the FCC's review of proposed mergers of communications companies has gotten much more unseemly as the Commission often has resorted to the practice of extracting midnight "voluntary" commitments from the merger applicants in exchange for approval of a merger. I first wrote about this unseemly practice in a March 2000 Legal Times piece entitled "Any Volunteers?" The Commission's practice of using its unbridled discretion under the vague public interest standard to force companies to engage in what I then called "the FCC's version of 'Let's Make a Deal'" denigrates the notion the agency is deciding mergers on a principled basis under a rule of law regime. Instead, the process smacks more of politics than principled decisionmaking.

Unless it is careful, the FCC risks further erosion of confidence in the way it handles merger proceedings in connection with its review of the proposed Comcast-NBCU merger. The "public interest" groups, such as Free Press, Public Knowledge, and Media Access Project, are leading a full-fledged assault on the merger. (Because the public interest is, as noted above, an indeterminate standard, any entity is free to call itself a public interest group, and, of course, media outlets are free happily to embrace such self-designation for some groups but not for others that might not meet their own conception of what is in the public's interest.) It is the perfect right of such groups to oppose the Comcast-NBCU merger if they please, and, indeed, to do so vigorously. No problem with that.

The problem arises with some of the tactics the groups employ in mounting such opposition. These tactics have the effect of undermining the role of the FCC acting independently on the basis of its expertise and experience. And the problem is only compounded if the Commission allows itself to become complicit – or, in effect, an enabler – in a process that begins to look more like a political advocacy campaign than a reasoned decisionmaking process conducted under established administrative law norms.

Here's a sampling of what I have in mind when I refer to problematic tactics in the context of an FCC proceeding, such as the proposed merger, which is principally adjudicatory in nature. Free Press is promoting a video it calls "How to Save the World from Comcast" that begins by announcing the Comcast merger "is headed for us like an asteroid" and gets more untethered from earth-bound facts from there. On the same "Stop the Merger" web page, Free Press urges its supporters to use a suggested comment form to enter a brief comment to be forwarded to the FCC. As Broadcasting & Cable's John Eggerton observed in a May 21 report, Free Press's tactic is beginning to swell the FCC's public docket with comments, although many just adhere to the suggested form and some appear to be duplicates filed by the same person. Finally, along with other groups, Free Press is urging the FCC to hold a number of public hearings around the country so that people can express their views on the merger.

As I said, the problem is not that Free Press, Public Knowledge, Media Access Project, or any other group, wishes to participate in the FCC's process and express their opposition to the merger. They are free to express such opposition in any way that conforms to the agency's rules. The problem arises if the Commission allows itself to be influenced or distracted by the groups' tactics in a way that delays what ought to be the agency's timely consideration of the merger or that detracts from what should be – and what should appear to the public to be -- a deliberative process focused on evidence directly relevant to established decisional factors.

Surely the FCC's ultimate decision should not accord much weight to the sheer number of short form letters submitted for or against the merger. These letters are almost entirely devoid of any facts relevant to the decisional considerations. Instead, they merely express, in formulaic terms, a computer-generated opinion. Such mass form letter-writing campaigns may be a relevant consideration in a purely legislative process. But it is inappropriate for them to be given much decisional weight in the consideration of an adjudicatory decision that should be grounded, in significant part, on expert economic and technical analysis, not organizational letter-writing muscle. The Commission cannot reach a reasoned decision simply by counting form letters.

By the same token, the Commission should reject calls for it to hold hearings across the country on the merger. Engaging in such a process is likely to turn consideration of the merger into distracting opportunities for showmanship that add no information to the record that cannot otherwise be supplied through the agency's normal processes. The relevant committees in Congress already have held four hearings and could decide to hold others as well. Indeed, if Congress were so disposed, it could even adopt legislation that would impact the Commission's consideration of the merger or squash it outright.

But the FCC is not a mini-Congress and should avoid allowing itself to be turned into one. Under established administrative law norms, the FCC is considered an independent regulatory agency that at times acts in a quasi-legislative capacity (such as when it engages in generic rulemaking), and at other times, such as in the consideration of a merger, in a quasi-judicial capacity. Again, as with the mass form emails, what would be the real purpose of field hearings? To count the number of witnesses that the Commission itself allows to testify for or against the proposal?

The Commission, rightly, has established a participatory process that allows interested parties a full opportunity to submit comments and replies to the agency, and they can do so easily through the Commission's website, or by mail if they prefer. In truth, there really is no relevant evidentiary information that would be presented to the Commission in field hearings that otherwise cannot be presented. Presumably, the Commission does not intend to base its decision on the "intensity" of the opposition that can be generated by Free Press and its allies to turn out for a hearing, or the number of signs waved in the back of the room.

There has always been a gap between the theory behind the creation of independent regulatory agencies such as the FCC and the reality. When Congress created the FCC it said it was putting its faith in, as the Senate Report put it, "one independent body" that would base its decisions on its specialized expertise. Indeed, the principal rationale for creation of the Commission in the independent agency format was that the commissioners would apply their "expertise" – a word oft-used in the legislative debates – to the technical and rapidly changing field of communications.

The reality is that application of the FCC's presumed expertise does not – and should not – occur in a vacuum. To a degree much greater than supposed, or at least admitted, by the Progressive-era theorists, every commissioner brings his or her own philosophical or policy perspective to each decision. This is in no way improper. But what would be improper, and injurious to the FCC as an institution, is for the Commission to allow itself or its processes to be used in a way that obviously invites the courts to conclude the agency itself is downgrading the role of its own expertise, while elevating considerations more suited to political campaign advocacy. And if this occurs, the FCC's credibility as an institution with expertise won't be damaged only in the eyes of the courts that review its decisions, but also in the eyes of the broader public the agency is supposed to serve.

Note that, quite deliberately, I have said not one word about the merits of Comcast-NBCU merger process, although I do have views on the subject. My concern here is for maintaining the integrity of the FCC's decisionmaking process, and certainly not only in the context of the Comcast merger or any particular merger proceeding. As a long-ago former Associate General Counsel of the FCC, a member of the Administrative Conference of the United States, and a former chair of the American Bar Association's Section of Administrative Law and Regulatory Process, I understand – indeed, I believe deeply -- that process matters with respect to the maintenance of the rule of law.

Noted constitutional law scholar Alexander Bickel wrote in his 1975 book, The Morality of Consent, that "the highest form of morality almost always is the morality of process." Whether or not one agrees with Professor Bickel's precise formulation, there should be no disagreement that the FCC should have as one of its own highest objectives the careful guarding of the integrity of its process.