State Commissioners See FCC as Agency in Need of Reform

The FCC could learn much about process from state utility commissions, said state commissioners in interviews amid their lawsuit against the federal regulator over usurping state powers (see 1606030053). State commissioners from both parties and four states said it should be a priority for the FCC to answer stakeholder concerns about transparency and politicization at the federal agency. NARUC President Travis Kavulla told us his Montana Public Service Commission "and probably most state commissions have much more sunshine than the FCC does." The FCC isn’t dysfunctional, but to maintain public trust it shouldn’t take openness concerns lightly, said Florida PSC Commissioner Ronald Brisé.

“The chairman is kind of God” at the FCC, said District of Columbia PSC Chairwoman Betty Ann Kane, a long-serving Democrat who also chairs the North American Numbering Council (NANC). The chairman sets the agenda, his staff sees the drafts, and no one else sees them until they're ready, she said. Tom Wheeler isn’t the first FCC chairman to assert control, said Kane, who has observed the agency for 30 years: "It's always been a hierarchy. Maybe more open or less open, more collegial or less collegial with various chairmen." She said Wheeler "has consolidated his role more than other chairmen.” The FCC didn’t comment.

The FCC invites less public participation than do state commissions or the Federal Energy Regulatory Commission, two state commissioners said. "The FCC tends to foist, fully sprung, these grand ideas onto the public,” said Kavulla, a Republican. "Presumably, some interests have had lots of input into such rulemakings, but it's unclear exactly who.” FERC also has self-initiated proposals from the chair, but "they strike me as being typically much more collaborative and also [more] publicly vetted," he said. Like FERC, the Montana PSC holds public roundtables and technical conferences during rulemakings, he said. FERC does outreach better than the FCC on an institutional basis, agreed Kane, though she said FCC Commissioner Mignon Clyburn is "very good at outreach” on an individual basis.

Kane doesn’t like the FCC practice of voting on summaries of items at meetings, with final text not available until sometimes weeks later. As D.C. PSC chairwoman, Kane makes her staff available to each of the two other commissioners equally, and there is much back and forth among the commissioners on the order text, she said. "There's no secrets," she said. "By the time something gets to vote, it's been through a lot of vetting internally and everybody knows what every word is from the first draft to the final draft."

Kavulla said the “nadir” of 2016 was the FCC Lifeline vote at the March 31 meeting. In particular, it was seeing GOP Commissioners Mike O'Rielly and Ajit Pai "looking lost on the commission dais as elevator music played," while the FCC decided what it was voting on, he said. "It leads to obvious questions about what's going on behind the scenes,” he said. “It just doesn't radiate confidence in this as a process that is actually politically neutral and focused on the subject matter at hand.” NARUC sued the FCC over the Lifeline order, which allowed some federal USF money to be used for broadband and not just voice service for the poor. The new rules set up a national process to verify Lifeline carrier participation, which could let companies avoid having to go through states for certification.

FCC partisan division irks Chris Nelson, Republican chairman of the South Dakota Public Utilities Commission and the NARUC Telecom Committee, he said. “Can't we do better than that, when so many of these issues in my mind don't need to be partisan?” he asked. “Isn't there some way that you can find consensus on some of these issues instead of having these 3-2 votes consistently? … You can obviously move things along on a 3-2 vote, but are you getting the very best answer for all of America?" Before the March meeting, the Lifeline order at first appeared headed to bipartisan compromise, but quickly turned into another split vote, he said. "Somebody couldn't stand that the fact there was a bipartisan compromise and it blew up.” Lobbying on that controversial vote is the subject of another story in this Special Report (see 1608220003).

"You get the sense that all the effort is to get three votes on something, rather than figuring out what's the right thing to do," Kane said. FCC staff can be quick at getting things done, but big policy issues take longer because they tend to break on party lines and there's "just an acceptance that whatever gets done is going to go to court," she said. At the D.C. PSC, Kane prefers to work toward unanimous decisions, she said.

Unlike Wheeler, neither Kane nor Nelson face the prospect of partisan splits at their commissions, with all Democrats in D.C. and all Republicans in South Dakota. But Nelson said there was a 2-1 Republican split for the first six months he was a commissioner. “You would have never known that, because never did we come at any issue from a partisan perspective," he said. "It was all working as a team … to find the best answers.”

Brisé painted a brighter picture of FCC commissioner relationships. “When I see them in person, they seem to have great personal relationships and decent working relationships even though they may hold vastly different views on some of the issues,” the Democrat said. But an outdated Telecom Act may foster more political decisions, said the Florida commissioner, who leads the NARUC Task Force on Telecommunications Act Modernization. “When the guiding regulatory framework is inadequate, that opens the door for divergent political philosophies to come into play.” For example, he said the FCC 2010 net neutrality order “was problematic, in part, because the Telecommunications Act does not speak to these new technologies.” Verizon successfully challenged aspects of that order, leading to a new order that the U.S. Court of Appeals for the D.C. Circuit upheld this year.

Even with partisan divide, the FCC isn’t dysfunctional, state commissioners said. "The FCC clearly continues to issue orders and have a fast pace of regulatory activity," Kavulla said. Nelson agreed: “They’re getting a lot of things done.” When he was in local government, Brisé saw “how dysfunction in a commission can impact the legitimacy of its decisions, and from the FCC’s voting records, I would not characterize that agency as dysfunctional -- far from it,” he said. Most FCC decisions this year were decided unanimously or by consent, he said.

Kane said she has had a positive experience working with FCC staff on numbering issues in her role as NANC chairwoman. She found the staff to be "very open, cooperative, supportive … and good to work with on those issues." It took a while to finalize the Telcordia number porting contract, she said, but the staff seemed to "have the leeway to use their professional judgment, and didn't seem cowed or controlled by the commissioners in those issues that we had to deal with.” Also, she praised the FCC website and said the agency gets “more information out than they used to.” Neustar's loss of the contract to a unit of Ericsson that was worth over $1 billion sparked a court battle and allegations of national security issues, detailed in communications we received in a Freedom of Information Act request (see 1608220044).

But the existence of concerns about FCC process means reform should be “high priority,” Brisé said. NARUC passed a resolution on FCC process reform at its February committee meetings (see 1602040062). “If there are process or transparency concerns by the parties, as well as the commissioners, it impacts their legitimacy and provides a basis for disagreement with their decisions," said Brisé. "On the other hand, if the process is clearly understood and transparent, then confidence increases.” Reports may conflict about the availability of information to various commissioners, for example, but he said “regardless of the accuracy of these claims, competing statements are still harmful to the agency.”