Stearns Seeks Regulatory Standards With Teeth

Rep. Cliff Stearns, R-Fla., is moving ahead with legislation to update the Regulatory Flexibility Act (RFA) and require independent agencies, such as the FCC, to review past regulations, the House Commerce Oversight Subcommittee chairman said after a hearing Thursday. The FCC is one agency that’s not doing enough to reduce regulation, Stearns and other subcommittee Republicans said. FCC Commissioner Robert McDowell, testifying alongside commissioners from the FTC and other independent agencies, agreed that the FCC should be more deregulatory.

The RFA, passed in 1980, is “obsolete … so I think Congress should step in” to update it, Stearns told us. Some but not all independent agencies are “following the spirit” of President Barack Obama’s January executive order requiring executive agencies to review which existing rules should be streamlined, reduced, improved or eliminated, he said. Legislation would require independent agencies to follow the order, Stearns said. Stearns said he didn’t know if his bill would be finished this year. The subcommittee will ask the agencies for ideas, “and then we will take it to staff and see if we can incorporate their suggestions into some kind of draft bill."

The executive order isn’t legally binding on independent agencies, noted Ranking Member Diana DeGette, D-Colo. Congress designed independent agencies to be “insulated” from political influence, and the RFA and the Administrative Procedure Act already act to stop bad rules, DeGette said. The RFA is “toothless,” McDowell said. He promised to assist in any legislative update. But Consumer Product Safety Commissioner Robert Adler said the RFA is useful and, for any update, “the devil’s in the details.” Other witnesses from the FTC, Federal Energy Regulatory Commission and the Consumer Product Safety Commission said they'd work with the subcommittee on an update.

FCC regulatory reviews required by law “fall short of what the president and this committee have asked the agencies to do,” said Stearns, citing the FCC’s biennial review of telecom rules and quadrennial review of media ownership rules. “They only cover a narrow set of rules at the FCC and the Commission can’t seem to get these reviews done on time.” And the FCC hasn’t “repealed or modified any significant regulations in recent review periods,” he said. “Perhaps that’s because the Commission is too busy taking conclusion-driven actions, such as the net neutrality order and the chairman’s Section 706 report.” Meanwhile, the FTC “resorts to rulemaking through orders and guidelines that do not undergo a notice and comment process,” Stearns said.

Increasing telecom competition has not led to deregulation as intended by Congress in the 1996 Telecom Act, McDowell said. While McDowell praised some reform efforts taken by Chairman Julius Genachowski, the Republican commissioner recommended “a comprehensive and sustained effort to repeal, or where appropriate, streamline unnecessary, outdated or harmful FCC rules.” McDowell suggested the FCC kill its “outcome-driven” December net neutrality order, the newspaper/broadcast cross-ownership rule and the equal-access scripting rule requiring incumbents to tell consumers that they have a choice of long-distance providers. McDowell added that the FCC requires companies to fill out “too many” forms.

"I'm proud of what we have achieved at the Commission,” FCC Chairman Julius Genachowski said in a letter Thursday to Stearns and DeGette. Genachowski, who did not testify due to a “previously scheduled out of town commitment,” listed several reform efforts at the commission. “Of course, there is always more to do to improve performance, and I am committed to continuing our efforts at reform,” he said.

The FTC supports the goals of the January executive order, even though it’s not binding, said FTC Commissioner William Kovacic. The agency is taking steps to improve retrospective review of regulations, Chairman Jon Leibowitz said. The agency plans to update its schedule of rule and guide reviews for the next decade, seek public comments to improve regulatory review, launch a regulatory review webpage on FTC.gov and revamp forms and other information that companies must submit when seeking antitrust clearance for proposed mergers and acquisitions, Leibowitz said.

The FTC won’t impose a top-down Internet privacy mandate, Leibowitz said. That’s “the last thing we want to do,” he said. But the FTC is working on an update of the Children’s Online Privacy Protection Act (COPPA), and Leibowitz hopes to issue a draft rule for public comment “within the next few weeks or by the end of the summer,” he said.

Stearns protested the absence of Genachowski. At the end of the hearing, the congressman refused to add Genachowski’s letter into the record. “Staff gave him plenty of notice” about the hearing date, Stearns told us afterward. “He should have been here.”