Full FCC to Vote on Consent Decrees for Enforcement Actions Begun by Full Commission

The FCC Enforcement Bureau is no longer allowed to settle enforcement actions begun by the full commission without a vote of all members, Chairman Ajit Pai said in a statement Wednesday on his latest change to processes. Pai has announced a process modification each day this week (see 1702070072 and 1702060062). Meanwhile, the other Republican commissioner asked the agency to be more consistent with deadlines, holding all to them after a general amnesty period except for when waivers are granted. And AT&T slammed past FCC enforcement measures.

In recent years, “in cases in which the full Commission has previously voted to propose and/or impose a forfeiture, such consent decrees have generally not been presented to the Commissioners for a vote,“ Pai said. The settlements were instead approved on delegated authority by the Enforcement Bureau chief “at the direction of the Chairman’s Office,” Pai said. The new policy will be immediately implemented on a consent decree that was circulated to commissioners by the Enforcement Bureau Wednesday, Pai said.

The policy change could open up enforcement actions to additional lobbying, communications attorneys told us. Though he praised Pai's process reform goals of improving transparency and efficiency, Georgetown University Institute for Public Representation Senior Counselor Andrew Schwartzman said the change “politicizes enforcement proceedings.” Companies and entities targeted by the enforcement bureau will likely favor the move, said Fletcher Heald broadcast lawyer Harry Cole.

Since individual commissioners will get to weigh in on how affected enforcement proceedings are concluded, they each present a lobbying opportunity for the target of the enforcement, Cole said. This process change “is very dangerous,” Schwartzman said. He said the move “reflects a lack of confidence in career staff and the enforcement chief to carry out the policies of the commission." The change is likely a reaction to some of the Enforcement Bureau consent decrees reached under former bureau Chief Travis LeBlanc, which Pai criticized and some industry officials considered overly punitive, a broadcast attorney said.

The Enforcement Bureau change may be more of an action against the bureau using delegated authority when it agrees to settle an enforcement proceeding begun by the full commission than a reaction to the previous bureau leadership, said one experienced communications attorney. A number of bureau level reversals ordered by Pai last week are also seen as intended to take back authority previously delegated to the bureaus.

The Enforcement Bureau’s past actions were also the target of a blog post by AT&T Senior Vice President-Federal Regulatory Joan Marsh Wednesday. Marsh called Enforcement “a Bureau that operated for many years with professionalism but whose recent practices have been marked increasingly by bad process, novel and tenuous theories of liability, and Notices of Apparent Liability (NALs) that languish after adoption.” Marsh's blog post also focused on consent decrees, and the FCC's use of them to create precedents without commission votes.

FCC and AT&T spokesmen said the timing of the blog post calling for enforcement changes and Pai's announcement was coincidental. If an enforcement matter is settled, new requirements imposed on the target of the enforcement action “become enshrined and apply not only to the parties that were subject to the enforcement investigation, but also to everyone else in the industry,” Marsh said. The previous bureau used this method so “an entirely new class of protected information” was fashioned in an NAL against TerraCom and YourTel, Marsh said. “The new requirements were then referenced in the FCC’s privacy rulemaking as settled law.”

Marsh also criticized the bureau for using a policy on “continuing violations” to get around statutes of limitations, and for imposing overly high penalties. “Regulated companies should not be subject to extreme and multiplied penalties when they took reasonable and appropriate steps to comply with the law and the Commission should provide more detailed guidance on when enhanced penalties are appropriate,” Marsh said.

Marsh said the Enforcement Bureau should be required to notify the subject of an NAL of the accusations against it and allow that subject to respond before the bureau issues the NAL. She also urged that a matter that isn't resolved within six months of the NAL's issue should be dismissed. “Such an approach would encourage investigatory discipline before a NAL issues and would give parties clarity on process after they have presented their public opposition,” Marsh said. “It would also discourage the issuance of NALs that are lacking in merit.”

Commissioner Mike O'Rielly proposed his own process changes in a blog post Wednesday, saying the FCC should standardize its reaction to missed deadlines. “For Commission rules and procedures to be truly effective, everyone needs to know with a certain level of confidence what will happen if applicable deadlines are missed,” O'Rielly said. “Certain bureaus have dismissed a petition for reconsideration filed one day late, are more than willing to cancel Commission-issued licenses that are not in compliance, and exclude auction participants that miss a deadline at the drop of a hat,” O'Rielly said. “On the other hand, some bureaus seem to go out of their way to make late filings seem as our mistake and work with applicants to rectify their omission, making them completely whole.” O'Rielly pointed to the FCC renewing the license for an FM station that had filed its application four years after its license term concluded. “Depending on the particular issue and the specific bureau, a provider or individual subject to Commission rules can see vast differences in how the deadlines are treated and enforced,” O'Rielly said.

He also backed an amnesty window to allow companies to self-report rule violations. ”What I envision as being eligible for relief are the same type of licensing and deadline errors as discussed above and other minor licensing matters that can be easily rectified,” O'Rielly said. ”The past Commission’s approach to enforcement matters -- one generally based on optics and achieving headlines -- discouraged regulated entities from self-reporting any instances where they may be out of compliance.