PRESS RLEASE: Reaction to Supreme Court's Refusal to Stop NLRB and MSPB Dismissals; Impact on FCC

 

With regard to the Supreme Court’s refusal to stop President Trump’s dismissal of members of the NLRB and Merit Systems Protection Board and the potential impact on the FCC, Free State Foundation Randolph May issued the following statement:

“Even before the Supreme Court’s action yesterday refusing to stop President Trump’s dismissal of members of the NLRB and the Merit Systems Protection Board, the handwriting was on the wall that Humphrey’s Executor likely would be overruled, or sharply curtailed. Now the handwriting is even more clear. I don’t see anything that would protect FCC commissioners from dismissal at will any more than members of the NLRB or MSPB, or for that matter many other multimember commission members. If I’m correct about Humphrey Executor’s likely demise, the notion that the FCC is an ‘independent’ agency is no longer operative.

Whether or not President Trump actually dismisses any FCC commissioner, it makes sense to start thinking right now about whether the agency should be reconfigured to comport with the likely new constitutional reality. I’ve suggested that the Commission’s policymaking functions could be transferred to the executive branch, say, to NTIA, while adjudicative-type functions could remain with the multimember commission. The Communications Act is long overdue for an update in any event to jettison the current outdated ’stovepipe’ model and the over-reliance on the amorphous 'public interest’ doctrine. So perhaps whatever happens in the current dismissal cases will spur discussion regarding that needed Communications Act update.”

 

GAO Flags Broadband Funding Coordination Concerns

Last month, the Government Accountability Office (GAO) issued a report on the state of federal broadband funding interagency coordination. Not for the first time, it flagged breakdowns in process that could lead to duplication, waste, fraud, and abuse.

Publicly released on April 28, "Broadband Programs: Agencies Need to Further Improve Their Data Quality and Coordination Efforts," identifies two concerns:

1. The FCC's failure to evaluate and document the accuracy of the service availability data underlying its National Broadband Map, which "adds both to the risk that agencies leveraging these data cannot effectively target funding to areas that lack high-speed internet and to users' existing concerns about the data's reliability."
   
   
2. The need for the FCC, NTIA, and the Departments of Agriculture and Treasury to define with sufficient clarity their coordination processes to "better position the agencies to sustain their collaboration, manage fragmented federal broadband efforts, and ensure that the considerable federal broadband funding is spent efficiently and effectively."

Regarding the National Broadband Map, the Report states that:

FCC officials described its processes for data validations, verifications, audits, and enforcement referrals as a new workstream that continues to be informed by fresh rounds of data, citing this as the reason why FCC had not yet formally evaluated or finalized formal operating procedures for these processes. However, without evaluating the effectiveness of its validations, verifications, audits, and referrals processes, FCC cannot know the extent to which these processes are sufficient to ensure the accuracy of the data in the National Broadband Map.

With respect to interagency coordination, the Report identifies three shortcomings: (1) no clear shared definition as to what the "covered data" that the agencies have agreed to share actually entails; (2) delays in the submission of data to be included in the FCC's Broadband Funding Map, a separate map that I described in a May 2023 Perspectives from FSF Scholars; and (3) the fact that "officials … have not established a formal process to de-duplicate their funding prior to making decisions about projects to fund."

To address these concerns, the Report presents 14 recommendations for executive action.

As you may recall, the GAO assessed broadband funding interagency coordination efforts once before, in May 2022. As I noted in a contemporaneous post to the Free State Foundation's blog, "Broadband: National Strategy Needed to Guide Federal Efforts to Reduce Digital Divide" identified "at least 133 funding programs that could support increased broadband access" under the purview of 15 different agencies and warned that "[t]his patchwork of programs could lead to wasteful duplication of funding and effort."

PRESS RELEASE: The FCC's Public Interest Authority Is Not a Blank Check!

Regarding the Court of Appeals for the Fifth Circuit’s decision issued today in Texas Association of Broadcasters v. FCC, Free State Foundation President Randolph May issued the following statement:

“For at least two decades now, in this law review article and otherwise, I have been urging the FCC, as a matter of bureaucratic self-restraint and regulatory modesty, to construe the congressional delegation of public interest authority narrowly. The Fifth Circuit’s decision holding that the FCC lacks authority under the 'public interest' standard to require broadcasters to collect and disclose, on a broadcaster-identifiable basis, certain employment data, including that based on race and gender, should be a cautionary tale. In holding the FCC’s regulation unlawful, the Court declared that 'the FCC’s authority to act in the ‘public interest' does not extend outside of the statutorily prescribed tasks that Congress has instructed the FCC to carry out.'

With a standard as concededly amorphous as 'the public interest,' regulators will always be tempted to deploy the delegation as a sword, as they were in this case. While Democrat FCC commissioners surely have been far more prone in the past to take an overly expansive view of the agency’s public interest authority, the temptation exists regardless of party. It should be resisted.

Here what I said in the Conclusion to my 2008 law review article:

With convergence and competition in the communications marketplace a reality, it is indeed time to revisit the application of the public interest standard. Whatever the merits of regulation under the indeterminate standard in the earlier, more monopolistic analog age (and I have serious doubts), the exercise of such unbridled and malleable discretion by the FCC is no longer appropriate in today’s digital environment. Assessments of marketplace competition primarily should guide the Commission’s regulatory decisions. Absent Congress’s or the courts’ narrowing the agency’s public interest authority, which is unlikely, the Commission, uncharacteristically, should heed my modest plea for regulatory modesty. In an exercise of self-restraint, the FCC should commit itself to narrowing the application of its public interest authority."

 

FCC Approves Verizon/Frontier Merger

Today, May 16, the FCC approved the Verizon/Frontier merger. The Commission's order approving the transaction stated: "Overall, we find that there are no potential transaction-related public interest harms and that there are some likely publicinterest benefits from this Transaction." As the agency's order explained: "[W]e conclude that Verizon is more likely to invest in and improve service quality in the Transaction market areas than Frontier would absent the Transaction. While the record indicates that Frontier has deployed fiber, no commenter disputes that it does not have funding in place for enhanced investment and additional fiber buildouts." The FCC's approval of Verizon's acquisition of Frontier means that fiber will reach more Americans – sooner.

 In an April 2 blog post, I noted that objections raised by public commenters in the Verizon/Frontier proceeding regarding IP interconnection, transitioning from legacy networks technologies to newer technologies failed to identify actual or potential harms arising from the transaction. Thus, I wrote that the Commission should not consider those matters as grounds for withholding approval of the transaction. The FCC essentially agreed with this view. The Commission's order characterized those same matters as not transaction-specific.

Credit is due to Chairman Brendan Carr and to staff in the Commission's bureaus who were involved in the review proceeding and prepared the Verizon/Frontier Order. Congratulations also are due to Verizon and Frontier. Hopefully, the consummation of the merger will accelerate fiber broadband deployment to Americans across the country. 

Also, the order stated the Commission accepts Verizon's commitment to reform its internal practices, and that the agency "expect[s] that these changes will prevent DEI discrimination in the post-transaction company, as consistent with the law and the public interest."

On the merits, approval of Verizon/Frontier is an easy call. Even so, the FCC's decision was right – and it was reached without excessive complications or undue delays. The Commission completed its review of Verizon/Frontier on day 189, just 9 days above the agency's informal shot clock.