Commissioner O'Rielly: FCC Investigation Has Suppressed Zero-Rated Offerings

On September 20, 2016, FCC Commissioner Michael O’Rielly spoke at the International Bar Association Conference, where he talked about the FCC’s investigation of zero-rated services. Commissioner O’Rielly said that the ten-month investigation has suppressed the implementation of new pro-consumer offerings:  “I have had conversations with industry participants that withheld new offerings because it isn’t worth being caught up in an FCC investigation. One company told me that their engineers came up with some new interesting ideas that were shot down almost immediately by their general counsel because of this rule. It is never a good thing when lawyers are dictating technology winners and losers, no offense to the lawyers in the room.”

Consumers benefit from more choices offered by their Internet service providers, but the FCC’s general conduct standard has discouraged ISPs from developing new services. It is time for the Commission to end its investigation of zero-rated services.

New Paper in Federalist Society Review Calls for FCC Process Reform

Today, Free State Foundation President Randolph May and Senior Fellow Seth Cooper published a paper in the Federalist Society Review entitled “The FCC Threatens the Rule of Law: A Focus on Agency Enforcement and Merger Review Abuses.” Mr. May and Mr. Cooper discuss the FCC’s general conduct standard, established in the February 2015 Open Internet Order, and its inconsistency with due process and rule of law principles. They also question a few recent enforcement actions by the FCC and discuss why the regulated companies often are better off settling than going to court, even when it is not clear that the company violated FCC regulations.

The paper also criticizes the FCC’s merger review process and the Commission’s actions to “regulate by condition” in a way that imposes different regulatory mandates on similarly situated market participants. If the FCC does not reform its merger review process soon, Mr. May and Mr. Cooper suggest that Congress pass FCC reform legislation that includes merger review provisions.

“The FCC and the Rule of Law” was the theme of FSF’s Eighth Annual Telecom Policy Conference. The Rule of Law panel and transcript provide more insight into the need for process reform at the FCC.