As covered in recent news accounts, the House Communications Subcommittee passed a pair of FCC process reform bills on November 16. In a November 3 blog post titled "Reforming the FCC's Regulatory Process," FSF President Randolph May discussed both bills: H.R. 3309 and H.R. 3310.
The FCC is an independent agency and not subject to existing Presidential Executive Orders regarding regulatory processes. So among its many provisions, H.R. 3309 incorporates some key language contained in Executive Order 12866 (1993) and Executive Order 13563 (2011) regarding identification harm and cost-benefit analysis.
H.R. 3309 contains requirement that must be met by the FCC in conducting rulemakings that will have an "economically significant impact"—i.e., will cost $100 million or more annually or have "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." In particular, the FCC must identify and offer an analysis of "the specific market failure, actual consumer harm, burden of existing regulation, or failure of public institutions that warrants the adoption or amendment." The FCC must also provide:
Cost-benefit analysis is receiving increasing attention as a method for bringing more discipline to administrative agencies and for halting or perhaps even turn the tide against escalating numbers of new federal regulations. Taking reasoned steps to curb unnecessary costs and restrictions imposed by federal regulations is particularly important in light of our existing economic travails.
Also on November 16, Dr. Jerry Ellig and Sherzod Abdukadirov of the Mercatus Center published a short primer on "Regulatory Analysis and Regulatory Reform." Ellig and Abdukadirov sketch out a useful framework for assessing the quality of regulatory impact analysis and offer some prescriptions for improving such analysis. It should come as no surprise that they recommend that "[r]egulatory analysis must be legislatively required for all agencies, including independent agencies."
a reasoned determination that the benefits of the adopted rule or the amendment of an existing rule justify its 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.
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