Politics, Chevron Seen as Big Differences Between FCC, Antitrust Regulators

The ways the FCC and antitrust agencies like DOJ evaluate deals can diverge widely, said experts Saturday at American University-hosted annual Research Conference on Communications, Information and Internet Policy. Steptoe & Johnson's Jon Sallet said the FCC's big question is often what range of policy options are "reasonable" under the Chevron doctrine of judicial deference to agencies, and what record would support a decision made within that range, while at DOJ the focus was on how does one convince a judge, with the burden of proof being on government to prove its case.

The FTC and FCC ostensibly should go about their regulatory jobs in much the same way, being five-commissioner agencies, but politics seems to play a bigger role in FCC decisions than at the FTC, said Jonathan Baker of AU. Part of the reason may be the FCC, with its focus on a single sector, confronts more concentrated interested groups, he said. He said FTC norms are judicial, with decisions based on law and policy, while the FCC norm is finding a compromise position among interest groups. Both approaches have pros and cons, Baker said, with the FCC able to take longer-term perspective and to supervise relief beyond what an antitrust agency can.

The FCC is seen as more vulnerable to capture by a particular group, but major transactions like mergers aren't captured, Baker said. The agency likely could benefit from expanding the range of information it requires regulated firms to routinely submit, he said. Howard Shelanski of Davis Polk said the FTC and DOJ aren't as invulnerable to capture as some might think since they often still see many of the same lawyers and economists.

The notion of there not needing to be an FCC except to handle specific spectrum matters, with its other work being done by antitrust agencies, presupposes the telecom market has changed fundamentally from the days when obvious market failures resulted in the commission being a sector-specific agency, Shelanski said. There likely is a case for less regulation, but FCC expertise and those market failure dangers mean there's a risk to getting rid of agency regulation and replacing it with competition policy, he said. One thing antitrust can't do well is tackle noneconomic values, like viewpoint diversity in media markets, he said.

A potential problem at both the FCC and FTC is the relative lack of economists compared with lawyers, said Roslyn Layton, American Enterprise Institute visiting scholar. It's also not clear which approach is more effective -- having economists embedded in particular bureaus or in their own specialized department like the approach the FCC is taking with its Office of Economics and Analytics. She also said agencies aren't budgeted the way they need to be today so they could have analytic tools such as artificial intelligence that could then lead to more airtight decisions surviving judicial review.

Pointing to the antitrust/regulatory models of other countries, William Kovacic, a George Washington University law professor, said a major flaw in how the U.S. approaches regulation is the Sunshine Act. He said the law restricts too tightly policymakers talking among themselves.