[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                         IMPROVING FCC PROCESS

=======================================================================


                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 11, 2013

                               __________

                           Serial No. 113-69


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov





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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky                 Chairman Emeritus
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania        FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon                  BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska                  ANNA G. ESHOO, California
MIKE ROGERS, Michigan                ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia                JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             JIM MATHESON, Utah
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   JOHN BARROW, Georgia
GREGG HARPER, Mississippi            DORIS O. MATSUI, California
LEONARD LANCE, New Jersey            DONNA M. CHRISTENSEN, Virgin 
BILL CASSIDY, Louisiana                  Islands
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
CORY GARDNER, Colorado               BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas                  PETER WELCH, Vermont
ADAM KINZINGER, Illinois             BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia         PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
             Subcommittee on Communications and Technology

                          GREG WALDEN, Oregon
                                 Chairman
ROBERT E. LATTA, Ohio                ANNA G. ESHOO, California
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               EDWARD J. MARKEY, Massachusetts
LEE TERRY, Nebraska                  MICHAEL F. DOYLE, Pennsylvania
MIKE ROGERS, Michigan                DORIS O. MATSUI, California
MARSHA BLACKBURN, Tennessee          BRUCE L. BRALEY, Iowa
STEVE SCALISE, Louisiana             PETER WELCH, Vermont
LEONARD LANCE, New Jersey            BEN RAY LUJAN, New Mexico
BRETT GUTHRIE, Kentucky              JOHN D. DINGELL, Michigan
CORY GARDNER, Colorado               FRANK PALLONE, Jr., New Jersey
MIKE POMPEO, Kansas                  BOBBY L. RUSH, Illinois
ADAM KINZINGER, Illinois             DIANA DeGETTE, Colorado
BILLY LONG, Missouri                 JIM MATHESON, Utah
RENEE L. ELLMERS, North Carolina     G.K. BUTTERFIELD, North Carolina
JOE BARTON, Texas                    HENRY A. WAXMAN, California, ex 
FRED UPTON, Michigan, ex officio         officio



                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     1
    Prepared statement...........................................     3
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. Robert E. Latta, a Representative in Congress from the State 
  of Ohio, opening statement.....................................     6
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     7

                               Witnesses

Larry Downes, Internet Industry Analyst and Author...............    10
    Prepared statement...........................................    12
    Answers to submitted questions...............................   137
Richard J. Pierce, Jr., Lyle T. Alverson Professor of Law, George 
  Washington University Law School...............................    37
    Prepared statement...........................................    39
    Answers to submitted questions...............................   141
Randolph J. May, President, Free State Foundation................    49
    Prepared statement...........................................    51
    Answers to submitted questions...............................   143
James Bradford Ramsay, General Counsel, National Association of 
  Regulatory Utility Commissioners...............................    67
    Prepared statement...........................................    69
    Answers to submitted questions...............................   146
Stuart M. Benjamin, Douglas B. Maggs Chair in Law and Associate 
  Dean for Research, Duke University School of Law...............    87
    Prepared statement...........................................    89
    Answers to submitted questions...............................   149
Robert M. McDowell, Former FCC Commissioner and Visiting Fellow, 
  Hudson Institute...............................................    96
    Prepared statement...........................................    99
    Answers to submitted questions...............................   152

                           Submitted Material

Congressional Budget Office cost estimate dated March 19, 2012, 
  submitted by Mr. Walden........................................   122
Letters of support, submitted by Mr. Walden......................   124


                         IMPROVING FCC PROCESS

                              ----------                              


                        THURSDAY, JULY 11, 2013

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:35 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Greg 
Walden (chairman of the subcommittee) presiding.
    Present: Representatives Walden, Latta, Blackburn, Scalise, 
Lance, Kinzinger, Long, Ellmers, Barton, Eshoo, Dingell and 
Waxman (ex officio).
    Staff present: Ray Baum, Senior Policy Advisor/Director of 
Coalitions; Sean Bonyun, Communications Director; Matt Bravo, 
Professional Staff Member; Andy Duberstein, Deputy Press 
Secretary; Neil Fried, Chief Counsel, Communications and 
Technology; Kelsey Guyselman, Counsel, Telecom; Gib Mullan, 
Chief Counsel, Commerce, Manufacturing and Trade; David Redl, 
Counsel, Telecom; Charlotte Savercool, Executive Assistant, 
Legislative Clerk; Phil Barnett, Democratic Staff Director; 
Roger Sherman, Democratic Chief Counsel; Shawn Chang, 
Democratic Senior Counsel; Margaret McCarthy, Democrat Staff; 
Kara van Stralen, Democratic Policy Analyst; and Patrick 
Donovan, FCC Detailee.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. I will call to order the subcommittee on 
Communications and Technology and open our hearing on 
``Improving FCC Process Reform.''
    The communications industry is one of the few sectors still 
firing on all cylinders in this economy, averaging $80 billion 
a year in investment since 1996. It cannot continue to do so, 
however, if faced with poor FCC process. As Blair Levin, a 
previous FCC chief of staff and architect of the National 
Broadband Plan, has lamented, and I quote, ``The FCC is 
becoming more of a political institution and less an expert 
agency.''
    Former Chairman Genachowski did make progress in reforming 
the Commission but there is more to do. The agency has fallen 
short in the past under both Democratic and Republican 
administrations. Without codification of certain protections, 
it will undoubtedly do so again. Only statute can ensure good 
process from the commission to the next commission. That is why 
we are discussing two draft bills today designed to minimize 
the potential for procedural failings, to curb abuse, and to 
improve agency decision making.
    The FCC Process Reform Act passed the House as H.R. 3309 in 
the last Congress on a 247-174 bipartisan vote. Contrary to the 
assertions of some, it does not change the public interest test 
nor strip the FCC's authority to protect consumers and 
competition. It merely asks the agency to do what we ask of 
most grade-school students: show your work, to publish the 
specific language of proposed rules, to identify a market 
failure or actual consumer harm, and conduct a cost-benefit 
analysis before regulating; to give commissioners, parties, and 
the public an adequate opportunity to review proposed rules; to 
publish the text of decisions promptly and examine whether 
adopted rules are meeting their purpose; to set ``shot clocks'' 
to ``give the parties and the public more confidence that the 
agency is acting with dispatch,'' as Commissioner Pai put it in 
his recent statement on the Softbank-Sprint-Clearwire 
transaction.
    Many of these ideas can be found in President Obama's 2011 
Executive Order on Improving Regulation and Regulatory Review, 
which binds executive branch agencies but, unfortunately, not 
to the FCC. And remember that in my state, public utility 
commissions already operate under much of what is proposed in 
this legislation. This is not unusual in America but it is in 
Washington. The draft bill also requires any transaction 
conditions to be narrowly tailored to transaction specific 
harms and otherwise within the FCC's jurisdiction. This was in 
the bill before Mr. Wheeler was nominated as FCC Chairman, but 
his blog about the AT&T and T-Mobile merger reinforces the 
need. In it he notes that the Communications Act does not 
currently prohibit the FCC from, and I quote, ``imposing merger 
terms and spectrum auction rules that might seem to be 
regulation in another guise.'' This is precisely what the 
transaction review process should not be used for: back-door 
rulemaking.
    Despite what you may hear, the bill does not dictate the 
outcome of a transaction review or alter the public-interest 
standard. The FCC can still find a proposed merger to be 
inconsistent and against the public interest and it can deny 
that transaction or adopt tailored conditions to remedy the 
specific condition.
    Now, some opponents argue implementing this bill would be 
difficult and will lead to litigation. Well, that is not true 
either. Most of the provisions rely on established definitions 
and accepted concepts under the Communications Act, the APA, 
and other law. And rather than micromanage the agency, the bill 
largely establishes principles and gives the FCC flexibility on 
how to implement them. I would nonetheless be happy to work 
with anyone who has a good-faith interest in improving the 
language as we did leading up to the final version of the bill 
that passed the House.
    Others say it would be unwise to apply these types of 
reforms except government wide in the context of the 
Administrative Procedure Act. Well, that would be fine with me, 
but this committee doesn't have that jurisdiction over the 
whole APA, and we need to start somewhere in Washington to 
reform government. Since the FCC oversees a huge and growing 
part of the economy, it seems a worthy candidate to commence 
the discussion.
    Now, the second draft bill, the FCC Consolidated Reporting 
Act, passed the House as H.R. 3310 last Congress by voice vote. 
The legislation looks to relieve burdens on the agency and make 
its reports more meaningful. It does so by consolidating eight 
statutorily mandated reports into one biennial review and 
eliminates 12 outdated studies, like one on the telegraph 
industry. The existing reports are cumbersome and often 
unnecessary. A recent Government Accountability Office study on 
the video competition report, for example, concluded that the 
reports may not be needed on an annual basis, ``especially 
given demand on FCC staff's time for other monitoring and 
regulatory duties.'' The proposed consolidated report will help 
break down siloed thinking and present a more useful picture of 
the marketplace upon which to base policy judgments.
    Now, I know there are some that have said there is no 
reason for this committee to spend its time on these efforts, 
and why would we take up these issues again when the Senate 
probably won't agree. We are here to reform government. We are 
here to make changes. We are not here to defend the status quo. 
And if the United States Senate wants to continue to have the 
Federal Communications Commission do its telegraph report, 
well, fine with them, but that is not what we are about. The 
last thing that we want to do is stifle an industry that is 
continually growing and innovating. Yet that is exactly what 
could happen if the FCC is not held to certain standards of 
decision-making. The industry deserves an efficient and 
effective regulator we can truly call expert, just as the 
public deserves a transparent and accountable federal 
government, and these reforms are a good place to start.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    The communications industry is one of the few sectors still 
firing on all cylinders in this economy--averaging $80 billion 
a year in investment since 1996. It cannot continue to do so, 
however, if faced with poor FCC process. As Blair Levin, a 
previous FCC chief of staff and architect of the National 
Broadband Plan, has lamented, ``[t]he FCC is becoming more of a 
political institution and less an expert agency.''
    Former Chairman Genachowski did make progress in reforming 
the Commission but there is more to do. The agency has fallen 
short in the past under both Democrat and Republican 
administrations. Without codification of certain protections, 
it will undoubtedly do so again. Only statute can ensure good 
process from commission to commission. That is why we are 
discussing two draft bills today designed to minimize the 
potential for procedural failings, curb abuse, and improve 
agency decision making.
    The FCC Process Reform Act passed the House as H.R. 3309 
last Congress on a 247-174 bipartisan vote. Contrary to the 
assertions of some, it does not change the ``public interest 
test'' or strip the FCC's authority to protect consumers and 
competition. It merely asks the agency to do what we ask of 
most grade-school students-to show its work. To publish the 
specific language of proposed rules, identify a market failure 
or actual consumer harm, and conduct a cost-benefit analysis 
before regulating. To give commissioners, parties, and the 
public an adequate opportunity to review proposed rules. To 
publish the text of decisions promptly and examine whether 
adopted rules are meeting their purpose. To set ``shot clocks'' 
to ``give the parties and the public more confidence that the 
agency is acting with dispatch,'' as Commissioner Pai put it in 
his recent statement on the Softbank-Sprint-Clearwire 
transaction. Many of these ideas can be found in President 
Obama's 2011 Executive Order on ``Improving Regulation and 
Regulatory Review,'' which binds executive branch agencies but, 
unfortunately, not to the FCC.
    The draft bill also requires any transaction conditions to 
be narrowly tailored to transaction specific harms and 
otherwise within the FCC's jurisdiction. This was in the bill 
before Mr. Wheeler was nominated for FCC Chairman, but his blog 
about the AT&T-T-Mobile merger reinforces the need. In it he 
notes that the Communications Act does not currently prohibit 
the FCC from ``imposing merger terms and spectrum auction rules 
that might seem to be regulation in another guise.'' This is 
precisely what the transaction review process should not be 
used for-back-door rulemaking. Despite what you may hear, the 
bill does not dictate the outcome of a transaction review or 
alter the public-interest standard. The FCC can still find a 
proposed merger to be against the public interest and deny the 
transaction or adopt tailored conditions to remedy specific 
concerns.
    Some opponents argue implementing this bill would be 
difficult and will lead to litigation. But it's also not true. 
Most of the provisions rely on established definitions and 
accepted concepts under the Communications Act, the APA, and 
other law. And rather than micromanage the agency the bill 
largely establishes principles and gives the FCC flexibility on 
how to implement them. I'd nonetheless be happy to work with 
anyone who has a ``good faith'' interest in improving language.
    Others say it would be unwise to apply these types of 
reforms except government wide in the context of the 
Administrative Procedure Act. That would be fine with me. But 
this committee does not have jurisdiction over the APA and we 
need to start somewhere. Since the FCC oversees a huge and 
growing part of the economy, it seems a worthy candidate to 
commence the discussion.
    The second draft bill, the FCC Consolidated Reporting Act, 
passed the House as H.R. 3310 last Congress by voice vote. The 
legislation looks to relieve burdens on the agency and make its 
reports more meaningful. It does so by consolidating eight 
statutorily mandate reports into one biennial report and 
eliminating 12 outdated studies, like one on the telegraph 
industry. The existing reports are cumbersome and often 
unnecessary. A recent GAO study on the video competition 
report, for example, concluded that the reports may not be 
needed on an annual basis, ``especially given demand on FCC 
staff's time for other monitoring and regulatory duties.'' The 
proposed consolidated report will help break down siloed 
thinking and present a more useful picture of the marketplace 
upon which to base policy judgments.
    The last thing that we want to do is stifle an industry 
that is continually growing and innovating. Yet that is exactly 
what could happen if the FCC is not held to certain standards 
of decision-making. The industry deserves an efficient and 
effective regulator we can truly call ``expert,'' just as the 
public deserves a transparent and accountable federal 
government. These reforms are a good place to start.

                                #  #  #

    Mr. Walden. With that, I would yield back the balance of my 
overused time and recognize my friend from California, Ms. 
Eshoo for an opening statement.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman, and good morning to 
you, and welcome to all of the witnesses. Former Commissioner 
McDowell, it is always a pleasure to see you and have you with 
us.
    Just 2 weeks ago, Mr. Chairman, we had bipartisan consensus 
on the need to focus on how federal agencies use spectrum. 
Today, we are returning to legislation that this subcommittee 
has debated for 3 straight years. It hasn't nor in my opinion 
will it go anywhere. Administrative law experts tell us it 
would tie the FCC up in years of litigation, and I think it 
really contains some policies that are not good policies. This 
proposed process reform, in my view, is a back-door way of 
gutting some of the FCC's very important authorities.
    Congress created the FCC to safeguard the public interest. 
Big corporations, as we know, are well equipped to advance 
their private interests, and they have every right to do so, 
but consumers need advocates and competitors and innovators 
need a referee to level the playing field.
    As we all know, the FCC faces an enormous set of challenges 
in the coming years including the upcoming voluntary spectrum 
auction, the transition to IP and the modernization of the e-
rate program in our Nation's schools and libraries. Our role as 
a subcommittee, I think, should be to ensure that the agency is 
equipped with the tools to meet these challenges while ensuring 
that the FCC can continue to protect the public interest and 
preserve competition. I am going to repeat that: preserve 
competition in the communications marketplace. If we really 
want to accomplish meaningful reform, I think we should start 
with a proposal that enjoys nearly universal support including 
that of the acting chairwoman of the FCC, Commissioners Pai and 
Rosenworcel, and former FCC Commissioners Abernathy, Copps, and 
McDowell.
    The FCC Collaboration Act of 2013, H.R. 539, is bipartisan, 
it is bicameral, and it will allow FCC commissioners to more 
easily collaborate with one another outside of public meetings. 
As the FCC increasingly responds to complex, highly technical 
issues, I think now is the time to get this legislation passed 
and signed into law. We just shouldn't delay anymore. It is 
really a source of embarrassment. Everyone is for it. We can 
get it done.
    Secondly, I support allowing commissioners to appoint the 
electrical engineer or computer scientist to their staff that 
some of them have asked for. This is a bipartisan proposal 
offered in the last Congress by former Representative Stearns.
    Third, I support the creation of an online searchable 
database of consumer complaints, an idea advanced by the 
ranking member of the full committee, Mr. Waxman, in the 
previous Congress, and finally, I agree that there could be 
opportunities to streamline many of the reporting requirements 
that Congress has placed on the FCC. We are now in the seventh 
month of the 113th Congress, but only one bill has moved 
through our subcommittee. Instead of working on legislation 
that creates billable hours for Washington telecom lawyers, I 
think that we need to work together to craft policies that are 
actually going to move, that will create jobs for innovators, 
promote investment in infrastructure across our country, and 
technological advances that will help American families.
    So I thank each of our witnesses that are here today. I 
know that we tried to get some of the opposite sex to show up. 
I know that they are alive and well out there, but for one 
reason or another, they couldn't, but I want, if the public is 
listening in, not to think that we have overlooked that, and 
again, I want to thank you for working with our subcommittee to 
help drive competition, promote innovation and protect 
consumers.
    And with that, I will yield back the balance of my time, 
Mr. Chairman.
    Mr. Walden. I thank the gentlelady, and I am going to ask 
for a moment of personal privilege now to acknowledge the 
service of our committee chief counsel, Neil Fried, who will be 
leaving the subcommittee soon to work for the Motion Picture 
Association of America. Neil has rendered outstanding service 
to this subcommittee for 10 years. He served as subcommittee 
counsel under full committee Chairmen Townsend, Barton and 
Upton, and subcommittee Chairmen Upton, Stearns and myself. He 
has been part of rewriting the Satellite Home Viewer Act so 
many times that well, he is going to avoid it this time, I 
think. Three times he has been there to help rewrite the Home 
Viewer Act. As a legislative rock star for the committee, his 
knowledge and expertise will be missed, but I know he will 
become a legal movie star for the MPAA. Neil, thank you for 
your service to this committee and to this country. I would 
have hoped on his final day here we would have him actually at 
the witness stand so we could have him under oath.
    I thank the committee for that indulgence, and now I would 
recognize the vice chair of the committee, Mr. Latta, for 5 
minutes.

OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Mr. Latta. Well, thank you, Mr. Chairman, and I will not 
take my 5 minutes, but I want to thank you for holding this 
hearing on ``Improving the FCC Process'', and I appreciate our 
witnesses for being here today. I really appreciate that.
    The cost of regulation to American businesses and hence our 
economy is too great to ignore. Regulatory burden is the number 
one issue I hear from everyone that I visit in my district, and 
it is amazing when you have all the different issues out there, 
the number one issue from everyone, and I have done 250 visits 
in my district of factories and businesses since the last 
August work period, it is regulations.
    Unfortunately, these job creators, many of them small 
businesses, are holding back from doing what they do best, and 
that is driving the economy and actually creating jobs, in part 
because of the burdensome regulations that are imposed.
    I have reintroduced my FCC ABCs Act from last Congress 
requiring the FCC to perform cost-benefit analysis on 
economically significant rules, and I appreciate the chairman 
including this idea in his discussion draft. Additionally, my 
bill would also reform the Commission's forbearance authority 
and biennial review of regulations by adding an evidentiary 
presumption in order to empower the FCC to arrive at more 
deregulatory decisions.
    With the telecommunications industry driving a significant 
portion of the economic growth in our country, as Members of 
Congress, we should make sure that the FCC does not produce 
regulations that will hamper this sector of the economy, and 
again, Mr. Chairman, I thank you and I yield back the balance 
of my time.
    Mr. Walden. The gentleman, I think, wants to actually yield 
to the gentleman from Texas, Mr. Barton----
    Mr. Latta. I am sorry, and I yield to Mr. Barton.
    Mr. Walden [continuing]. For such time as he may consume.
    Mr. Barton. I thank the gentleman from Ohio.
    I think it is about time that Neil got a real job. We wish 
him well. Honestly, he is a great guy.
    Mr. Chairman, I have introduced FCC reform legislation in 
the last three Congresses, two Congresses ago, as the ranking 
member in the minority and last Congress with a subcommittee 
Chairman Stearns, and of course, I am happy to be on these two 
bills today.
    I seldom disagree very strongly with the ranking minority 
subcommittee leader, Ms. Eshoo, on too many issues, but I do 
disagree with her on this. I fail to see how more openness and 
transparency, which is primarily what these two bills do--I 
mean, there are other things in the bills--but it is basically 
an attempt to get more certainty in the rulemaking process and 
more openness and transparency so that the stakeholders can 
understand what the commissioners at the FCC are doing. I don't 
see that as a negative. I see that as a positive.
    So as you pointed out in your opening statement, Mr. 
Chairman, one of these bills passed the House and maybe both of 
them in the last Congress, so maybe this is the year of the 
Congress that we actually get it through the Senate and the 
President signs it. If you look at what has happened at NSA and 
you look at what is happening with the IRS and you look at what 
has happened at the Justice Department, I would think those 
that are interacting with the FCC would want bills like these 
two because I think they are much better for the American 
people if we modernize and make more transparent their actions.
    With that, I will yield to somebody else or yield back my 
time.
    Mr. Walden. I think Ms. Blackburn had requested----
    Mr. Barton. I will yield to the gentlelady from Tennessee.
    Mrs. Blackburn. Thank you so much, and I want to welcome 
our panel because we are appreciative that you would take your 
time and be with us.
    And Mr. Chairman, I want to thank you for so diligently 
pursuing FCC reforms. It is needed. I will tell you, only in 
Washington, D.C., does it seem to be acceptable for federal 
agencies to be careless or reckless or unaccountable for 
taxpayer dollars or to oppose reforms or efficiencies or ways 
that are going to allow the customers, the end users to be 
better served. So I do look forward to this.
    We have all heard and have grown weary, it seems like there 
is a scandal and misuse of taxpayer funds every week, whether 
it is the IRS or Department of Labor or Department of Justice. 
The list goes on and on--EPA. So putting this issue forward is 
appropriate, it is timely, and we appreciate that you all would 
be here to give us your best thoughts and recommendations, and 
I yield back.
    Mr. Walden. The gentlelady yields back. All time is expired 
on our side. We will turn now to the gentleman from California, 
Mr. Waxman, for an opening statement.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you, Mr. Chairman. I want to begin by 
also thanking Neil Fried for his service on this committee, and 
I wish him well in his new position. I hope at the MPAA he will 
have occasion to visit my district more often and understand 
the problems of real people.
    Mr. Walden. You two can travel together.
    Mr. Waxman. Today the subcommittee revisits a topic that 
deeply divided our committee last Congress: the so-called FCC 
process reform. Supporters of this legislation assert that this 
bill will make the Federal Communications Commission more 
transparent and efficient. From our perspective, it is 
transparent that this legislation is an effort to undermine the 
agency's ability to adopt new rules, protect consumers, and 
promote competition, and the only efficiency gained is the 
speed with which communications lawyers could find new ways to 
take the FCC to court.
    The bill circulated by Chairman Walden earlier this week 
includes the same defects as the legislation from last 
Congress. It still undermines the ability of the FCC to act 
quickly and efficiently by putting in statute a dozen new 
mandatory process requirements, with each one subjecting the 
FCC to new court challenges. And it still alters fundamentally 
the agency's authority to impose conditions during its 
transaction review process, effectively eviscerating the 
public-interest standard that has guided the FCC for nearly 80 
years.
    The red tape created by this legislation is astounding. The 
Congressional Budget Office estimated that implementing the 
legislation from last Congress would require 20 additional 
staff positions at the FCC and cost the agency millions of 
dollars every year. I don't see that there is an abundance of 
extra funds to devote to this purpose. And the updated draft is 
even worse than last year's bill. It contains new provisions 
that would further incapacitate the agency.
    Ranking Member Eshoo and I asked committee staff to consult 
with administrative and communications law experts to 
understand the impacts of the legislation. The overwhelming 
consensus from the independent experts we spoke with was that 
adoption of this legislation would be a serious mistake that 
would slow the FCC to a crawl. They told us that the FCC-
specific mandates in this bill would remove the Commission from 
the well-established precedents of the Administrative Procedure 
Act, which could lead to decades of litigation and breed 
uncertainty and confusion. The agency would be tied up in knots 
and unable to do much of anything except report to Congress on 
its adherence to deadlines.
    I am pleased we will be able to hear from two of these 
experts today: Professor Richard Pierce of the G.W. Law School 
and Professor Stuart Benjamin from Duke Law School. Professor 
Pierce is one of the leading authorities on administrative law 
in the nation. He literally wrote the textbook on this topic. 
Professor Benjamin brings to us a unique perspective as an 
expert in both telecommunications law and administrative law 
who has spent time working at the FCC as a Distinguished 
Scholar. I also welcome back to the Committee Mr. McDowell, Mr. 
May, and Mr. Ramsay.
    Let me reiterate what I hope is obvious. Democrats are open 
to improving federal agency operations and efficiency, and the 
FCC is no exception. We proposed several reforms last Congress 
and will do so again this Congress. If there are sensible ways 
to make the agency more efficient and nimble, we should join 
together to do so. But we seriously disagree about the wisdom 
of the current effort, and I hope the majority will reconsider 
its plans to push this through the House. We do far too many 
message bills that go nowhere in the Senate.
    We have a real opportunity to enact meaningful bipartisan 
legislation that modernizes our communications and technology 
laws but every day we spend arguing over this bill, which is 
going nowhere fast, is another missed opportunity.
    Thank you, Mr. Chairman.
    Mr. Walden. Will the gentleman yield for just a second on 
the APA issue?
    Mr. Waxman. Yes.
    Mr. Walden. Because if you look at the last section of the 
draft bill, we don't change anything on APA except for the 
Sunshine Act, that you all support. Just as a matter of 
clarification, nowhere else in the Act do we change the APA 
directly. It is only the Sunshine Act.
    Mr. Waxman. Well, Mr. Chairman, I will be pleased to listen 
to what the witnesses, who are suggests in this area, have to 
think about what changes there are in the APA. This would be a 
serious matter, and I seem to sense that you think it is 
serious as well.
    Mr. Walden. I would just direct you to line 5, page 25, 
section 6, effect on other laws: ``Nothing in the Act or the 
amendment made by this Act shall relieve the FCC from any 
obligations under Title V, U.S.C. Code, except where otherwise 
expressly provided,'' and that is the Sunshine Act.
    Mr. Waxman. Mr. Chairman, reclaiming my time, as I 
understand it, it removes the Administrative Procedure Act from 
the FCC and creates another set of laws under which it would 
operate that is similar to the Administrative Procedures Act 
but is different, and I want to get that point clarified in 
this hearing. I think this is why we have hearings.
    Mr. Walden. That is exactly why we have hearings, and even 
for bills that go forward.
    Let me suggest that we have 11 minutes left in the vote, so 
rather than start with one person's testimony, I would 
recommend that we recess the committee now until after votes. 
So I know you are all poised and ready to go, and we appreciate 
it, but I think it is probably best for the flow of the 
testimony that we recess until we return from votes 
immediately. Thank you.
    [Recess.]
    Mr. Walden. If we could have everybody take their seats, we 
are going to restart the hearing and hear from our witnesses. I 
apologize for the delay, and they do expect votes again right 
around noon, so hopefully we can at least get through the 
statements of our distinguished panel members, and we will 
start off with Mr. Downes, who is an Internet industry analyst 
and author, and we welcome you to the Subcommittee on 
Communications and Technology, and go ahead and turn that mic 
on, pull it up close, and we look forward to your testimony on 
this matter. Thank you, sir.

   STATEMENTS OF LARRY DOWNES, INTERNET INDUSTRY ANALYST AND 
 AUTHOR; RICHARD J. PIERCE, JR., LYLE T. ALVERSON PROFESSOR OF 
LAW, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL; RANDOLPH J. MAY, 
   PRESIDENT, FREE STATE FOUNDATION; JAMES BRADFORD RAMSAY, 
  GENERAL COUNSEL, NATIONAL ASSOCIATION OF REGULATORY UTILITY 
 COMMISSIONERS; STUART M. BENJAMIN, DOUGLAS B. MAGGS CHAIR IN 
LAW AND ASSOCIATE DEAN FOR RESEARCH, DUKE UNIVERSITY SCHOOL OF 
   LAW; AND ROBERT M. MCDOWELL, FORMER FCC COMMISSIONER AND 
               VISITING FELLOW, HUDSON INSTITUTE

                   STATEMENT OF LARRY DOWNES

    Mr. Downes. Well, thank you, Mr. Chairman and Ranking 
Member Eshoo and members of the subcommittee. I appreciate the 
opportunity to testify today on the importance of reforming 
processes at the FCC. My name is Larry Downes. I am based in 
Silicon Valley. I am an Internet industry analyst and the 
author of several books on the information economy, innovation 
and the impact of regulation. I have also written extensively 
on the impact of communication policy on the dynamic broadband 
ecosystem and in particular the role played by the FCC.
    As the nature technological innovation has both accelerated 
and mutated in the last decade in particular, the FCC's 
inability to eliminate needless roadblocks for consumers, 
entrepreneurs and incumbents alike has reached a breaking 
point. The agency continues to tinker with a 21st century 
communications ecosystem using a 19th century toolkit. Many of 
the FCC's processes are badly in need of reform and structure. 
They lack economic rigor, transparency, expediency and 
consistency.
    As Nobel Prize-winning Ronald Coase famously wrote, ``If 
you torture the data long enough, nature will always confess.'' 
That, in a nutshell, has become the FCC's unintended modus 
operandi. The agency collects the data it needs to make wise 
and efficient decisions, but in the absence of clear guidelines 
and the most basic economic tools, the Commission cannot resist 
the urge to abandon the logical conclusions compelled by their 
own data in the service of vague, idiosyncratic, transient and, 
often, unarticulated policy goals.
    These problems devalue much of the good work of the 
agency's staff and subvert the often admirable goals of the 
FCC's Chairmen and Commissioners. They have created an epidemic 
of side effects, including reports that fail to reach obvious 
conclusions supported by the thorough data collection the staff 
performs, limiting their usefulness as policy tools to advance 
the FCC's longstanding charter to promote communications to all 
Americans; rulemakings that torture their analysis and data to 
justify what appear at least to be ex ante conclusions to 
regulate regardless of the need or cost; painfully slow reviews 
of license transfers aimed at avoiding an imminent spectrum 
crisis which when approved are rendered incoherent by laundry 
lists of unrelated conditions, many of which become 
counterproductive or mooted by technological advances years 
before they expire. In approving the Comcast-NBC University 
merger, for example, which took the FCC nearly a year, the 
agency imposed 30 pages of conditions including a requirement 
to run certain commercials on certain channels at certain times 
for a period of 5 years; and finally, past and now future 
spectrum auctions poisoned by similar interventions weighed 
down with so many strings attached, they either fail to achieve 
minimum bids or leave billions of dollars on the table.
    Given rapid changes in the broadband ecosystem, the FCC 
needs some measure of flexibility to complete its statutory 
mission. But applying that flexibility ungrounded by neutral 
principles, guidelines and analytic processes invariably does 
more harm than good. Worse, the lack of structure has left the 
FCC with the mistaken impression that the agency can predict an 
increasingly unpredictable future and design what it calls 
prophylactic remedies for consumer harms that have yet to 
occur.
    In effect, the Commission's decision-making process is at 
war with the agency's own data. Congress can easily ameliorate 
the worst symptoms of this breakdown. The two discussion draft 
bills before you provide many commonsense, modest, apolitical 
repairs imposing needed structure on the FCC's processes.
    As those of us in the technology industry have learned the 
hard way, the pace of change has long since outrun our ability 
to predict the future even in the short term. The FCC must be 
cured of its addiction to micromanaging markets that are 
evolving even as the Commission's deliberations meander along, 
and it must focus its remedial and regulatory efforts on 
relevant consumer harms that are tangible and solvable with 
both precision and measurable efficacy. That minimal level of 
regulatory process has been mandatory for executive agencies 
since President Clinton ordered it in 1993, an order amplified 
by President Obama in 2011. President Obama also made clear he 
expected though he could not require the same basic tools be 
applied as a matter of course by independent regulatory 
agencies including the FCC. Indeed, most independent regulatory 
agencies, according to a recent longitudinal survey by the 
Administrative Conference of the United States are already 
required by law to conduct some level of cost-benefit analysis. 
The FCC is one of the very few who do not have such mandates in 
their implementing statutes, and perhaps the only agency that 
doesn't do it anyway.
    There is also nothing novel or difficult about the added 
requirement the FCC consider as an alternative to specific 
interventions the possibility that high-tech markets will cure 
their own ills more quickly and efficiently and with fewer 
unintended side effects. That was, for example, precisely the 
approach taken by the Department of Justice in its separate 
review of the Sirius-XM satellite radio merger. In a 4-page 
statement closing its review, the Antitrust Division sensibly 
found that new forms of competition driven by emerging Internet 
technologies would be more than adequate to discipline the 
combined entity, and they have been proven abundantly correct. 
By contrast, it took the FCC 17 months and a 100-plus-page 
order laden with conditions to reach the same conclusion.
    Thank you for the invitation to appear today. I look 
forward to your questions.
    [The prepared statement of Mr. Downes follows:]
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    Mr. Walden. Mr. Downes, we appreciate your testimony.
    We will go now to Mr. Richard J. Pierce, Jr., Lyle T. 
Alverson Professor of Law at the George Washington University 
Law School. Mr. Pierce, thank you for being here today, and we 
look forward to your testimony, sir.

              STATEMENT OF RICHARD J. PIERCE, JR.

    Mr. Pierce. Thank you, Chairman Walden, Ranking Member 
Eshoo and members of the subcommittee. It is a privilege for me 
to be able to appear before you today to discuss the proposed 
Federal Communications Commission Reform Act of 2013.
    I have taught administrative law for 36 years. I have 
written over a dozen books and 120 scholarly articles on 
administrative law. My books and articles have been cited in 
hundreds of judicial opinions including over a dozen opinions 
of the United States Supreme Court. I am also a member of the 
Administrative Conference of the United States.
    I will discuss the provisions of the proposed Act that 
relate to the procedures the Federal Communications Commission 
is required to use to issue rules. I will not discuss the 
provisions that relate to the substantive principles the FCC is 
required to apply in its decision-making. I am not an expert on 
communications law, so I lack an adequate basis to discuss 
proposed changes in the substance of communications law.
    The proposed FCC Process Reform Act would add 12 judicially 
enforced mandatory steps to the notice and comment rulemaking 
procedure required by Section 553 of the Administrative 
Procedure Act. Those new mandatory, judicially enforced steps 
are: a minimum 30-day period for submitting comments; a minimum 
30-day period for submitting reply comments; a mandatory notice 
of inquiry issued within 3 years of the issuance of the notice 
of proposed rulemaking; mandatory inclusion of the language of 
the proposed rule in the notice of proposed rulemaking; an 
identification of the specific market failure the proposed rule 
addresses; a determination that the benefits of the proposed 
rule exceed its costs; a determination that market forces or 
changes in technology are unlikely to address the specific 
market failure addressed by the rule; advanced provision of a 
list of the available alternative options to all Commissioners, 
provision of the language of the proposed rule to all 
Commissioners well in advance of any meeting scheduled to 
consider a proposed rule; publication of the text of the 
proposed rule in advance of the meeting; adoption of 
performance measures for any program activity created or 
amended by the rule, and a finding that such performance 
measures will be effective to evaluate the activity created or 
amended by the rule.
    None of these procedures are in the Administrative 
Procedure Act. Every one of them is an add-on to the procedures 
in the APA. In my opinion, the proposed Act would not improve 
the FCC decision-making procedure. As I explain in greater 
detail in my written testimony, the proposed Act would have two 
serious adverse effects. First, it would be a significant 
departure from the wise decision Congress made in 1946. After 
15 years of debate and an unprecedented amount of empirical 
research, Congress unanimously enacted Section 553 of the 
Administrative Procedure Act. That statutory provision creates 
a uniform set of procedures that all agencies are required to 
use when they issue rules.
    The APA was one of the most thoroughly debated and 
carefully researched statutes ever enacted. It was premised on 
the belief that creation of a uniform set of procedures 
applicable to all agency rulemaking was critically important to 
the Nation. The Supreme Court has spent the last 67 years 
resisting the periodic attempts to return to the confusing, 
uncertain and ad hoc world that preceded the passage of the 
Administrative Procedure Act, yet that is exactly what this 
bill would do. It would move us back in that direction.
    Second, it is a bad idea to add 12 mandatory, judicially 
enforced procedures to a process that is already long and 
resource intensive. The proposed Act would add many additional 
procedures to the FCC rulemaking process, so many mandatory 
procedures that the agency would be able to issue, amend or 
rescind few, if any, rules. It would slow down the decision-
making process dramatically. That is exactly the opposite of 
what you want to happen in a highly volatile market like 
telecommunications. As I discuss in detail in my written 
testimony, great jurists like Chief Justice Rehnquist and D.C. 
Circuit Judge Cavanaugh have urged rejection of similar efforts 
to impose such burdens on the rulemaking process.
    That concludes my testimony. I would be glad to answer any 
questions you might have.
    [The prepared statement of Mr. Pierce follows:]
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    Mr. Walden. I appreciate your testimony, Mr. Pierce, and we 
will now move to Randolph J. May, who is the President of the 
Free State Foundation.
    Mr. May, thanks for being here today. We look forward to 
your comments.

                  STATEMENT OF RANDOLPH J. MAY

    Mr. May. Thank you, Mr. Chairman. I would like to borrow 
Professor Pierce's booming voice for my testimony.
    Chairman Walden, Ranking Member Eshoo and members of the 
committee, again, thank you for inviting me to testify today. I 
am President of the Free State Foundation, a nonprofit research 
and educational foundation. FSF is a think tank that focuses 
its work primarily in the communications law and policy and 
administrative law areas. I have been involved for 35 years in 
communications policy in various capacities including having 
served as Associate General Counsel at the FCC. I am a past 
chair of the American Bar Association's section of 
administrative law, and I am a public member of the 
Administrative Conference of the United States. So today's 
hearing on FCC process reform is at the core of my longstanding 
experience and expertise in communications law and policy and 
administrative law.
    I appreciated the opportunity to testify before this 
committee a bit more than 2 years ago. Though H.R. 3309 and 
3310 both passed the House, unfortunately they died in the 
Senate. Reform measures such as those embodied in the present 
discussion drafts are needed now more than ever. In my June 
2011 testimony, I generally supposed the proposed reforms, and 
I do so again today because the FCC's decision-making needs to 
change so that in today's generally dynamic competitive 
telecommunications marketplace, the agency will be less prone 
to continue on its course of too often defaulting to regulatory 
solutions even when there is no convincing evidence of market 
failure or consumer harm.
    The FCC still operates today with a pro-regulatory 
proclivity pretty much as it did in 1999 when the Clinton 
Administration's FCC Chairman Kennard called for the 
reorientation of the agency's mission to account for the 
increasingly competitive environment evident even then. After 
having served at the FCC from 1978 through 1981, when President 
Carter's FCC chairman was initiating efforts to reduce 
regulation in light of the new forms of competition already 
emerging then, I believe that regulatory reform measures like 
those embodied in the discussion drafts and the few additional 
ones that I advocate in my testimony deserve bipartisan 
support.
    In the time that I have, without taking anything away from 
the significance of some of the other proposed reforms, I want 
to highlight the rulemaking requirements and transaction review 
proposals because they are especially important. It is true, of 
course, that as some of the bill's opponents charge, new 
Section 13(a) would require the FCC to make additional findings 
and undertake additional analysis beyond that presently 
required before it imposes new rules. For example, the FCC 
would be required to analyze whether there is a market failure, 
and it would be required to perform a cost-benefit analysis, 
and the Commission would be required to provide a reasoned 
explanation as to why market forces and technology changes will 
not within a reasonable time period resolve the agency's 
concerns. Frankly, in today's communications environment, you 
would hope the FCC would be doing these things anyway, but the 
reality is, that it often doesn't. There is nothing inherent in 
sound principles of administrative law that suggests Congress 
should not impose particular sector-specific analytical 
decision-making requirements when circumstances warrant. While 
general theories of administrative law are nice and can be 
relevant, in general they are not necessarily applicable to a 
specific marketplace sector or regulator, and this is 
especially true in this particular marketplace sector, which 
due largely to rapid changes in technology is generally 
competitive.
    Indeed, I urge the committee to go a step further by 
specifying that the reasoned determination required concerning 
whether market forces or changes in technology are unlikely to 
resolve the Commission's concern must be based on clear and 
convincing evidence. This change will not prevent the 
Commission from adopting new regulations, and it is not 
intended to do so. It simply requires the agency to meet an 
evidentiary burden before adopting or revising regulations.
    The transaction review provisions contained in Section 
13(k), especially the addition that allows the Commission the 
conditional approval of a proposed transaction only if the 
condition addresses a likely harm uniquely presented by the 
specific transaction would go a long way towards combating the 
FCC's abuse of the transaction review process. The agency often 
has abused the process by delaying approval of transactions 
until the applicants ``voluntarily'' agree, usually at the 
midnight hour, to conditions that are not narrowly tailored to 
remedy a harm arising from the transaction or unique to it.
    I also suggest the committee reform the forbearance and 
periodic regulatory review process by in effect requiring a 
higher evidentiary burden to maintain existing regulations on 
the books. Actually, I understand from what Representative 
Latta said that maybe he agrees with that. Absent clear and 
convincing evidence that the regulations at issue should be 
retained under the existing substantive statutory criteria, 
regulatory relief should be granted. Similarly, I propose 
adoption of a sunset requirement so that all rules will 
automatically expire after X years absent a showing based on 
clear and convincing evidence that it is necessary for such a 
rule to remain in effect to accomplish its original objective.
    Again, thank you for inviting me to testify today. I will 
be pleased to answer your questions.
    [The prepared statement of Mr. May follows:]
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    Mr. Walden. Thank you, Mr. May. We appreciate your 
participation in our hearing.
    We now turn to James Bradford Ramsay, who is General 
Counsel for the National Association of Regulatory Utility 
Commissioners. Mr. Ramsay, thank you for being here. We look 
forward to hearing from NARUC.

               STATEMENT OF JAMES BRADFORD RAMSAY

    Mr. Ramsay. Thank you so much, Chairman Walden and Ranking 
Member Eshoo, for inviting me and giving me the privilege of 
testifying today.
    I am enthusiastic that there is again a focus on reform at 
the FCC. I guess I wanted to say since I am hearing the 
perspective, everybody is telling where they are coming from, I 
am coming from the perspective of a 23-year practitioner before 
the agency who actually has to deal with these procedures on a 
daily basis, and I am representing a group of people who are 
directly impacted by these procedures daily: the tate public 
utility commissions in all 50 states, each one of your tates.
    In my 23 years at NARUC, I have had the privilege of 
working with nine--the privilege and sometimes the frustration 
of working with nine different FCC chairs. I started with Al 
Sikes was chair, and of course, I am here for Mignon Clyburn, 
my really good friend. And without exception, I think they have 
all been dedicated public servants, really trying to do what 
they thought was in the best interest of the country. Mignon, 
when she came up here, Chairman Clyburn when she came up here 
before her confirmation as FCC chair, I was talking to her at 
the NARUC offices, and she just looked up, and we were talking 
about the confirmation hearing process. She said no, I don't 
really care about all this, Brad, I just want to do the right 
thing. And I think that is what all FCC Commissioners try to 
do. I think the staff over at the FCC is among the most 
professional and hardworking of all of the federal agencies 
that I deal with here in Washington, but that doesn't mean that 
there aren't process abuses at the FCC, and the process abuses, 
it also doesn't mean that Congress shouldn't be looking at some 
ways to correct the process abuses at the FCC. There have been 
process abuses at the FCC every year that I practiced before 
the agency before both Democratic and Republican 
Administrations. There have been problems, problems that 
unnecessarily increase cost to taxpayers--that is your 
constituents--problems that increase the regulatory risk 
unnecessarily for FCC policy pronouncements to be overturned on 
process issues that we shouldn't even be talking about, 
problems that directly undermine rationale decision making. I 
mean, if you look at some of the provisions in this bill, they 
are designed to make sure that the other FCC Commissioners have 
adequate time to look at the record and consider things that 
are put in the record later in the process before they make 
their decision. Those provisions I think are useful.
    There are also problems I think that the discussion draft 
will actually go a long way towards correcting, or at least 
certain provisions in the discussion draft. Is that draft 
perfect? There is no such thing as a perfect piece of 
legislation coming out of Congress, but there are some pieces 
and, you know, NARUC endorses very specifically certain aspects 
of this legislation. It provides a good framework from NARUC's 
perspective for bipartisan action going forward at FCC that are 
in there that are supported by both sides.
    I think it is worth pointing out here that like the 
committee and Congress, NARUC is bipartisan. The people that I 
represent, unlike the other witnesses on this panel, are in-
state experts whose interests align precisely with each 
representative in this room. These are commissioners that 
reside and work in your state, and there is not another 
stakeholder in the telecommunications sector that cares more 
about what happens to the infrastructure in your state and to 
the services and your state and the impact that the FCC 
decisions have on that than the people that I represent, and 
there are also few people that have the same level of 
appreciation of what that impact means and the expertise to 
provide input. I think it is significant that those same 
commissioners from your states have for years, almost a decade 
now, supported many of the specific provisions that we endorse 
in this discussion draft, and when I look at process reform, 
there are so many reasons that you should be considering this 
carefully. One of them is that if you fix it so that the record 
is better, if you put in these provisions, my belief is, 
publishing the rule ahead of time, making sure there is an 
opportunity to reply to late ex parte filings and studies that 
have been in the record fairly close before the deadline for 
advocacy drops, if you give an opportunity for people to 
respond to these, if you give the Commissioners more time to 
consider things that they are given, then you will get a better 
decision and you will get a better decision because there is a 
better record. If you don't put in some of these requirements, 
and I will mention just three of them, the rule to publish the 
text of the rule in advance, to require minimum comment cycles, 
which is crucial for state commissions because we have limited 
resources and we can't act as fast as others can, and to 
effectively require time for reasonable consideration of the ex 
partes, if just those three requirements, you get a better 
record. If you don't do those requirements, the people that get 
disadvantaged are the people that I represent and small 
businesses in your states and the consumer advocates in your 
states. We are the ones that don't have the resources and can't 
respond quickly. But no one benefits if we all end up in court 
arguing about process instead of policy.
    I can see my time is running down here, but I will just 
say, if you look in my testimony, I point out, I am litigating 
right now in the 10th Circuit over a decision that came from 
this Administration. There are examples from all the 
Administrations of process problems. There I think we have a 
reasonable chance of coming back, bringing the entire 
reformation of the federal university service regime 
accomplished by the agency in 2011 back to the agency just on 
process issues, and if those provisions that I mentioned had 
been enacted into law at the beginning of 2011, I wouldn't be 
litigating those issues today.
    So I think the bill provides a useful vehicle, and I 
encourage you to seize the opportunity to move forward with 
reform. Thank you very much.
    [The prepared statement of Mr. Ramsay follows:]
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    Mr. Walden. Mr. Ramsay, thank you very much for your 
helpful comments. We appreciate that.
    We will turn now to Mr. Stuart M. Benjamin, Douglas B. 
Maggs, Chair in Law and Associate Dean for Research at Duke 
Law. Mr. Benjamin, thank you for being here.

                  STATEMENT OF STUART BENJAMIN

    Mr. Benjamin. Thank you, Chairman Walden, Ranking Member 
Eshoo, members of the subcommittee. Thank you for the 
opportunity to testify today.
    My academic career has centered around the FCC. I teach 
telecommunications law, I coauthor a telecommunications law 
casebook, and I teach and write in administrative law and the 
First Amendment. From 2009 to 2011, I was the inaugural 
Distinguished Scholar at the FCC, and I thank co-panelist Rob 
McDowell for coming up with that job title for me. True story.
    So I should also say I have no clients, paid or unpaid, nor 
have I had any clients or consulting relationships since I 
became an academic in 1997. All right.
    I think I understand the concerns that motivate the FCC 
Process Reform Act, and I think there are quite legitimate 
questions about FCC processes and standards. I do have concerns 
about the bill as drafted, though, for several reasons. First, 
as has already been touched on, the bill contains many new 
requirements that are unique and would bring the FCC into 
uncharted territory. So there are neither agency nor judicial 
precedents that would provide guidance and clarity, and these 
new requirements could be the subject of litigation; that is to 
say, one could bring a lawsuit based on them. For instance, in 
addition now to being able to challenge a rule as arbitrary and 
capricious, which one is already able to do, one can challenge 
the adequacy of any or all of the new findings required. My 
concern is, this runs the risk of the bill being a jobs program 
for lawyers. If I were in private practice in D.C., that might 
be great. As a citizen, I am not sure that it is so great.
    And then this uncertainty created by new provisions is 
exacerbated by the fact that the provisions apply only to the 
FCC, and that brings me to the second concern which is, as Dick 
Pierce has pointed out, the great strength of the 
Administrative Procedure Act is that it applies the same rules 
to all agencies allowing for consistency and fairness, and this 
bill would undermine that consistency by creating a special set 
of rules for the FCC. My own view is, if the bill's proposals 
are good ideas, I think they are worth applying across the 
board. If they are not worth applying across the board, I am 
not sure why they should apply only to the FCC.
    The third concern I want to raise involves merger review. 
As I detail in my written testimony, the requirement of narrow 
tailoring--narrow tailoring is not found in the U.S. Code, it 
is found only in strict judicial scrutiny--and the requirement 
of uniqueness of harms will, I think, make it difficult, if not 
impossible for the FCC to impose any meaningful merger 
conditions. If Congress's goal is to eliminate the FCC's merger 
review, my suggestion would be, you should simply repeal the 
FCC's merger authority. That would save everyone--companies, 
citizens, FCC staff--a huge amount of time, energy, and money. 
If, on the other hand, Congress wants the FCC to play a 
meaningful role in merger review, I think the legislation 
should use somewhat less forbidding language than this stark 
language of strict scrutiny.
    My fourth reservation arises out of provisions that would 
diminish the chairman's authority. This is something I got 
great insight into when I was at the FCC. In my time there, I 
came to recognize the great value arising out of the clarity of 
lines of authority, of having a clear hierarchy, and reducing 
the chairman's authority would undermine that clarity, 
potentially creating confusion and inefficiency within the FCC. 
I understand the arguments for allowing, for instance, a 
majority of the Commissioners to place an item on the agenda. 
One thing that particularly jumped out at me was a proposal to 
empower a minority of commissioners to block actions taken 
under dedicated authority. I think that is a different matter. 
The Commission makes thousands of decisions every year, and 
businesses and individuals rely on the predictability and speed 
of the FCC's decision-making process in resolving those 
matters. So changing that process may unsettle a lot of 
reasonable expectations.
    Fifth and finally, the bill creates additional procedures 
that I fear will confer little, if any, benefit. Notices of 
inquiry, which of course don't appear anywhere in the APA and 
only one provision of the United States Code, sometimes make 
sense, and the Commission sometimes uses them, but requiring 
notices of inquiry will further ossify the rulemaking process, 
and I think the same is true of the requirement that proposed 
rules be issued with a notice of proposed rulemaking. The 
Commission already sometimes or often puts out proposed rules 
with its notices of proposed rulemaking, but requiring them, I 
think, adds cost and very uncertain benefit. And it will push 
rulemaking even more into a rule-adopting process in which all 
the important decisions are made before the APA process even 
starts. That is to say, the danger is that the APA process 
becomes kabuki theater and public comments arrive after all the 
meaningful decisions have been made. So the concern is, in 
general these provisions will not make the FCC regulation 
better, just more laborious.
    I see that my time is up so I will stop there.
    [The prepared statement of Mr. Benjamin follows:]
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    Mr. Walden. All right. We will get to you on questions, I 
am sure, and you will have a chance to elaborate. Thank you for 
your testimony and your participation in the hearing, Mr. 
Benjamin.
     We will now go to the Honorable--I guess we still call you 
that even though you are out of office now--Robert M. McDowell, 
former Federal Communications Commission member, and Visiting 
Fellow at the Hudson Institute. Mr. McDowell, we really 
appreciate your coming in today to give us your unique 
perspective as a former commissioner and now outside of the 
portals can speak freely as you did when you were inside the 
portals. So we welcome your testimony, sir.

                STATEMENT OF ROBERT M. MCDOWELL

    Mr. McDowell. Thank you, Mr. Chairman and Ranking Member 
Eshoo and all the members of the subcommittee. It is terrific 
to be back before you, my first time back since the leaving the 
Commission just about 7 weeks ago. And I did want to also make 
a special note to thank Neil Fried for his many, many years of 
public service. I have had the privilege and the honor of 
working very closely with Neil on I can't even count the number 
of issues over the years, and he has been a terrific colleague 
and a friend, and we wish you well in the movie business, so we 
will see at the movie theater, I guess.
    So currently I do serve as a Visiting Fellow at the Hudson 
Institute's Center for Economics of the Internet. Having said 
that, all of the views I express today are purely my own, and 
they may be very lonely ideas if no one else agrees with them, 
but I will say them nonetheless.
    FCC process reform is not necessarily the most glamorous of 
topics but it is an important one, and I commend the 
subcommittee for its ongoing work in this area. The FCC after 
all regulates about one-sixth of the American economy, and 
really indirectly affects the rest. Just as important, the 
Commission also serves as a regulatory template for countries 
across the globe. The ways in which the FCC considers proposed 
regulations and goes about shaping their substance has a direct 
effect on the U.S. economy and ultimately not just American 
consumers but consumers around the globe. In short, to 
paraphrase Chairman Emeritus Dingell, those who control the 
process also control the outcome. Accordingly, it is prudent 
for Congress to cast a bipartisan oversight eye on the 
processes of all administrative agencies. Chairman Walden and 
other members should be commended for sparking this 
conversation with the legislation from the last Congress as 
well as this year's discussion drafts.
    But before going further, I would be remiss if I did not 
mention the need for a fundamental rewrite of our Nation's laws 
regulating the information, communications and technology 
sector. Such a comprehensive rewrite has not occurred since 
1996, and even that left in place legacy stovepipes that 
regulate technologies rather than just market conditions. 
Today, consumers don't know or usually don't really care if 
their data is transmitted over a coaxial cable, fiber optics, 
copper or wireless platforms. In fact, usually data is being 
transmitted over hybrid networks that we are not even aware of. 
It is seamless to the consumer. Instead of directly focusing on 
whether the marketplace is experiencing a concentration of 
power, abuse of that power, and resulting consumer harm, 
today's regulations draw their authority from the nearly 80-
year-old Communications Act of 1934. The FCC will celebrate its 
80th birthday next spring. And that Act is based on 19th-
century-style monopoly regulation, which rests on an even older 
foundation. Therefore, having different regulations based on 
the type of technology used and their history rather than on 
current market conditions is likely distorting investment 
decisions. For the sake of improving America's global 
competitiveness, I respectfully urge Congress to move ahead as 
soon as possible with a comprehensive rewrite of our 
communications laws with the aim of promoting investment and 
innovation while protecting consumers.
    Putting some of this into tangible terms, in 1961 when 
consumers had a choice of one phone company and three broadcast 
TV networks, the FCC's portion of the Code of Federal 
Regulations filled just 463 pages. In 2010, the FCC's rules 
filled 3,695 pages, despite the bipartisan deregulatory 
mandates of Congress as codified in the Telecommunications Act 
of 1996. Today, the Commission's rules fill 3,868 pages despite 
President Obama's call in 2011 to pare back unnecessary rules. 
In short, in a marketplace that is undeniably more competitive 
than it was in 1961, the FCC's regulations grew by more than 
800 percent as just measured in the number of pages with a 
nearly 5 percent increase just since 2010. In contrast, the 
American economy has grown by a much smaller number since 1961 
by about maybe 370 percent.
    Some of these rules are necessary but are all of them? 
Shouldn't the Commission have the authority to weed out all 
outdated rules the way it can and must for rules affecting 
telecommunications services under Title II as mandated by 
Sections 10 and 11? Forbearance authority should apply to all 
platforms and industries, not just traditional telecom 
services.
    Along those lines, as my fellow witness Randy May has 
advocated for quite some time, requiring the Commission to 
justify new rules with bona fide cost-benefit and market 
analyses would help better inform policymakers and restrain 
them from issuing unnecessary rules. Exercising discretion and 
regulatory humility while being patient with markets can create 
a better experience for consumers. Similarly, new rules should 
sunset after a definitive period, and the renewal should be 
justified from scratch in new proceedings with public notice 
and comment. The continuation of old rules may be absolutely 
necessary, but let us test that premise every few years.
    I see I am running out of time. In fact, I am way out of 
time. But other ideas to explore should include, just for 
respectful mention here, limitations on unnecessary merger 
conditions that have nothing to do with the attendant 
transactions, shot clocks with exceptions, consolidation of 
industry reports, and regulatory fee reform, among many others.
    Lastly, I would like to end with a bipartisan applause 
line: Let us have Sunshine Act reform so more than two 
Commissioners can meet to discuss substance without having to 
call for a public meeting. Let the record reflect there was 
thunderous applause on both sides of the aisle after that.
    Thank you for the opportunity to speak before you today, 
and I look forward to answering your questions.
    [The prepared statement of Mr. McDowell follows:]
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    Mr. Walden. Mr. McDowell, as always, thank you for your 
testimony, as entertaining as it always concludes. We 
appreciate all of the witnesses. I will start out with some 
comments and questions.
    First of all, picking up on your last comment, I know the 
desire of the agency to be able to have Commissioners, more 
than one, meet together without a public setting. The irony 
coming from the State of Oregon that pioneered meeting 
requirements both for its legislative assembly and its agencies 
is that that is the one piece of this bill that would actually 
allow activities to occur in private that are otherwise public 
today, and it is also the only provision, and correct me if I 
am wrong, that actually amends the APA itself. So the irony is, 
my friends who object to these other reforms and requirements, 
alleging that somehow this committee would only be affecting 
the APA for one agency, want to affect the APA for one agency 
to allow members of the Commission to meet in private without a 
public setting and do their business. Is that not correct, Mr. 
McDowell, with all due respect to the applause lines?
    Mr. McDowell. Yes, Mr. Chairman, I agree with that.
    Mr. Walden. Thank you.
    Now, having put that on the record, let me go to the 
expenditure piece, and I would put in the record with unanimous 
consent the Congressional Budget Office cost estimate from 
March 19, 2012, which looked at the predecessor bill and I 
think was referenced by the distinguished gentleman from 
California.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. The CBO also went on to say that assuming 
appropriations and necessary amounts for personnel and 
information technology, under current law, the FCC is 
authorized to collect fees sufficient to offset the costs of 
its regulatory activities its year. Therefore, CBO estimates 
that the net cost to implement the provisions of H.R. 3309 
would not be significant, assuming annual appropriation actions 
consistent with the agency's authorities. Yes, it does require 
a few more people. Guess what? Open processes do.
    Mr. Ramsay, I would like to go to you as representing the 
public utility commissions around the country. As you know, my 
senior policy advisor, Ray Baum, behind me, chaired the Oregon 
Public Utility Commission. Much of what we are proposing here 
is actually already accomplished by many public utility 
commissions in their processes, is it not? Don't they require 
rules to be published in advance? Don't they almost prohibit ex 
parte contact? Don't they require a much more transparent 
process, which is what we are getting at here?
    Mr. Ramsay. Yes, sir. Generally speaking, my experience has 
been that the State regulatory process is more transparent and 
less subject to processes lapses than the FCC and other federal 
agencies.
    Mr. Walden. And do you think it is right that a federal 
agency can require as a condition of a merger quote, unquote, 
voluntary actions that they could not require under their 
statutory authority otherwise?
    Mr. Ramsay. Well, NARUC hasn't taken a position on the 
merger condition authority in the statute, so I----
    Mr. Walden. All right. I will go to Mr. McDowell. Do you 
think it is right that a federal agency can require two 
parties, or three or five or however many in a merger, to do 
certain things that it could not require them to do under their 
statutory authority? And in fact, there are people maybe headed 
to the FCC who believe that authority should be used that way 
to affect the marketplace, and wouldn't that have an effect on 
other players in the market not subject to the merger, and 
would that be fair to them?
    Mr. McDowell. That was a compound question so I want to 
make sure I hit all parts of it. So yes, I agree that it is 
problematic. I have been a long-time critic of imposing merger 
conditions that are not related to the actual transaction. It 
does start to enable the Commission to impose effectively a 
rulemaking or other policies not envisioned by Congress so in 
essence, the FCC is legislating through that type of process.
    Mr. Walden. And Mr. Benjamin, I want to pick up on one 
point on the notice of inquiry requirement that you objected 
to. We should also, for the record, point out that is only a 
requirement if in the prior 3 years the Commission has not done 
work in that area. So it is not required every single time, it 
is just to try and get some background information ahead of 
time if they are going to act or they haven't acted before. Is 
that not accurate?
    Mr. Benjamin. Right. So I think the way it is written, you 
have to have either a notice of proposed rulemaking, which 
would have rules in it, or a notice of inquiry or a judicial 
order. So one way or another, before you start the new NPRM, 
you will have actually had a huge amount of process beforehand 
through a notice of inquiry or through a prior set of rules in 
an NPRM.
    Mr. Walden. So our goal here is--many of you have had very 
good recommendations about things you think could be done 
better or differently, but our goal here--and we will take 
those into account as we go into a markup at some point and try 
to get this right. We don't want to hogtie the FCC. We don't 
want to add to litigation. Believe me, I get a round of 
applause in any town when I confess I am not an attorney. And 
so I have no interest in adding to the legal establishment's 
billing hours. I am actually trying to improve public process 
and open this up and do what other agencies already do and do 
what the President has suggested agencies not constituting the 
FCC do, and we will continue to work on this until we get it 
right but we will move forward.
    So with that, my time has expired, and we have--oh, yes, I 
have one other UC I need to do, which are statements of support 
from various entities, the United States Chamber of Commerce, 
the National Association of Regulatory Utility Commissioners, 
the National Association of Broadcasters, USTelecom, Americans 
for Tax Reform, Citizens Against Government Waste, National 
Cable and Telecommunications Association, Comcast, NTCA, and 
AT&T, statements in support of the legislation, unanimous 
consent to enter into the record.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. With that, my time is expired.
    Ms. Eshoo. Were they voluntary, Mr. Chairman?
    Mr. Walden. You know, I will let you read them for 
yourself, and yes, I think they are all voluntary.
    Ms. Eshoo. Is it my turn now?
    Mr. Walden. It is your turn. And I will turn to my friend 
from California, who we have a little disagreement on parts of 
this bill, but I would tell you, we have 12 minutes left in the 
vote, so when she concludes, then we recess again and then come 
back.
    Ms. Eshoo. Thank you, Mr. Chairman.
    To all of the witnesses, I just want to share the following 
with you. In listening very carefully to each one of you, I 
leaned over and I said to Mr. Waxman, isn't it so extraordinary 
that we have the level of expertise that is represented at this 
time in our country. It makes me feel very, very proud. Whether 
I agree with some of your views or not is not the point but it 
is really nothing short of remarkable, so thank you. I love 
hearings, and I always learn a lot, so thank you for being here 
and offering what you did in your testimony.
    I just want to get something straight off the table so it 
can be just yes or no. Do you all support a standalone action 
on the FCC Collaboration Act as a way of allowing FCC 
Commissioners to collaborate outside of official public 
meetings? Yes or no. We will start with Mr. Downes.
    Mr. Downes. I don't have an opinion on that.
    Ms. Eshoo. OK.
    Mr. Pierce. I think it is a good idea but I would like to 
see it as an amendment to the government in the Sunshine Act 
applies to all of the agencies that are run by collegial 
bodies. There is no reason--again, I see nothing unique about 
the FCC here. It is the same as the FERC or any other agency 
run by a collegial body. This would be a big improvement.
    Ms. Eshoo. I appreciate that. I think what needs to be 
stated for the record, and I think the chairman may have 
thought that it was the reverse of what takes place in his home 
State. There is a requirement in this legislation that is 
bipartisan and bicameral for transparency. So it is not that 
Commissioners can go off in secret, the public never knows what 
they have talked about and discussed and that it just remains 
there in a secret bubble. That is not the way the legislation 
is drafted.
    So Mr. May, yes or no?
    Mr. May. I can't answer yes or no.
    Ms. Eshoo. OK. Mr. Ramsay?
    Mr. Ramsay. Yes.
    Ms. Eshoo. Mr. Benjamin?
    Mr. Benjamin. I agree entirely with what Dick Pierce said.
    Ms. Eshoo. OK.
    Mr. McDowell. I don't have an opinion if it is separate or 
together, but it is a good idea nonetheless.
    Ms. Eshoo. Good. My sense of what really underlies more of 
this effort surrounds one issue, and that is the whole issue of 
the FCC's authority to review acquisitions and mergers, and I 
think that that is where there is concern. I think that is 
where there is disagreement. I think that is where there is 
agitation. I think there is aggravation. And I think that is 
driving this more than anything else, because there are some 
smaller reforms that can be made that we can do on a bipartisan 
and I think bicameral basis, but I do think that this is the 
area that really causes the most heartburn, both pro and con.
    Now, Mr. Pierce and Mr. Benjamin, I think that you made 
references to this in your written testimony, and I want to 
give you the opportunity to elaborate on it. I think that the 
draft legislation only allows the FCC to impose conditions that 
are ``narrowly tailored to remedy a harm that arises as a 
direct result of the specific transaction,'' but these 
transactions are huge in terms of their impact on the American 
people, on consumers, on media consolidation, which I think it 
really goes to the heart of democracy. So would either one of 
you care to comment on what I just said?
    Mr. Benjamin. Sure. What is remarkable to me about the 
language is that it is the language of strict judicial 
scrutiny, and narrow tailoring, when it is--if I were a judge, 
I would think Congress chose this language for a reason. They 
chose it because they were picking up on strict judicial 
scrutiny because it is a term of art.
    Ms. Eshoo. Well, it has been chosen for a reason. It didn't 
create itself.
    Mr. Benjamin. I understand, but just to be clear, when 
courts apply strict scrutiny narrow tailoring, they require 
that the government use the least restrictive means in order to 
achieve a goal, and that is a very difficult standard to meet. 
As Justice Breyer noted in dissent in a couple of cases, any 
clever or creative lawyer or judge can come up with some other 
less restrictive means. So I think as crafted, I think it will 
be difficult for the FCC to have any meaningful merger 
conditions. And a separate question is whether the FCC should 
be in the business of reviewing mergers at all. My only 
recommendation would be then just do it and avoid a lot of 
confusion.
    Ms. Eshoo. Well, I think that there are some here that 
believe that they just shouldn't. I don't know how many but I 
think there are some that hold that view, and they are entitled 
to it. But I think it is very clear that there is a public-
interest standard that the FCC is charged with, and this has a 
lot to do with the interest of the public and the country. This 
isn't just about getting into some menacing details just to be 
complex and complicated. Would you like to comment, Mr. Pierce?
    Mr. Pierce. I didn't address this in my prepared testimony 
because it struck me as an issue of substantive communications 
law, and I am not an expert in that. I will change hats, 
though, and tell you I am an expert in antitrust law. That is 
another subject I have been teaching for the last 30-some 
years, and I agree completely with Mr. Benjamin that it would 
make a lot of sense to take the FCC completely out of this. The 
FCC doesn't know much about antitrust law. The FTC and the 
Department of Justice know a lot about antitrust law. They have 
the power to impose conditions. They regularly impose 
conditions on mergers. Those conditions are specifically 
tailored to address the competitive issues that are raised by a 
proposed merger. That is something the FTC and the Department 
of Justice, Antitrust Division, know a lot about, and the FCC 
knows very little about. So I agree completely with Professor 
Benjamin that the far more sensible thing would be a statutory 
change that would probably require about 10 words that says the 
FCC has no power over mergers; that is exclusively the realm of 
the DOJ and the FTC.
    Mr. Walden. Mr. McDowell, I will go to you, but I have to 
excuse our colleagues. We are down to 5 minutes.
    Ms. Eshoo. My time is expired anyway.
    Mr. Walden. Go ahead.
    Mr. McDowell. On second thought, actually there is an 
emerging headline right here, which is, I would agree.
    Mr. Walden. You would agree?
    Mr. McDowell. I would agree.
    Mr. Walden. With what?
    Mr. McDowell. Antitrust review is a form of public-interest 
review. So DOJ or FTC under the antitrust review, they are 
looking at harms to consumers, and the public-interest standard 
of the FCC is really ill defined and that is why you get these 
merger conditions which sometimes have nothing to do with the 
emerging transaction resulting in any consumer harm. So we 
might be on to something here.
    Mr. May. I agree as well, Mr. Chairman.
    Mr. Walden. All right. I have to cut this off right now 
because we have got less than 4 minutes for the vote on the 
floor. They expect a few votes thereafter like 15 minutes, so I 
am going to suggest we will try and come back here about 1 
o'clock, a little after 1:30, if that works. If there are 
others who have questions----
    Mr. Waxman. Mr. Chairman, I have an appointment at 1:30. 
Otherwise, I am here and I wanted to get my----
    Mr. Walden. OK. We will come back.
    Mr. Waxman. At 1 o'clock?
    Mr. Walden. I am just speculating that because they said 
votes about 12:30, 12:45. By the time we get back, it will 
probably be a little after 1:00. If we are back sooner, we will 
start sooner, but to give them--you all plan 12:45. How is 
that? And if we can get back here at 12:45, we will, because I 
want to make sure other members have their chances to ask 
questions of our distinguished panel.
    With that, we will stand in recess.
    [Recess.]
    Mr. Walden. We will call back to order the Subcommittee on 
Communications and Technology on our ``Improving FCC Process'' 
hearing, and we appreciate your indulgence. I hope you all had 
a chance to get out and get a little lunch or something while 
we were voting. You didn't? Uh-oh. Well, sequester strikes 
again.
    We are going to go now to the vice chair of the 
subcommittee, Mr. Latta, for 5 minutes for questions.
    Mr. Latta. Well, thank you very much, Mr. Chairman. I 
appreciate that. And again, thanks for our witnesses. We have 
had a few votes this morning, and I appreciate your willingness 
to stick around.
    Mr. May, if I could ask a question in regards to 
forbearance reform at the FCC and get your thoughts on that?
    Mr. May. Thank you, Mr. Latta. In my view, it was pretty 
clear when Congress put the forbearance authority in the 1996 
act that it intended it to be used when appropriate as a 
deregulatory measure when competition warranted, and I think 
the fact of the matter is--and that is also true of the 
regulatory review provision that follows it, the periodic 
regulatory review. The fact of the matter is that the 
forbearance authority has just been little used as a 
deregulatory tool. So what I have recommended, and I think you 
have just introduced a bill which may be somewhat along these 
lines is that without changing the substantive criteria in the 
forbearance provision that is protecting consumers and 
protecting the public interest, that none of that would be 
changed, but that the Commission in order to maintain 
regulations when it has a petition to forbear, that is bear the 
evidentiary burden, in other words, there be a presumption that 
the statutory requirements aren't met absent clear and 
convincing evidence or some type of burden. And I think by 
doing that, without changing, again, the substance of the 
criteria, just as a matter of process and procedure, it would 
leave the tool to be used more as I believe Congress intended 
when it included it in the Act back in 1996.
    Mr. Latta. Thank you.
    Mr. McDowell, could I get your thoughts on forbearance 
reform?
    Mr. McDowell. Yes, as I said in my written and oral 
testimony, Congressman, I think it would be a terrific idea to 
expand that to more than just telecommunications services, 
which is what Congress did in the 1996 Act. Now, having said, 
there is a little footnote, which is Section 336, for some 
reason referred to as Section 202(h). So our quadrennial media 
ownership review is also supposed to be a review and to 
deregulate as more competition comes into the media space, but 
beyond that, for cable, for wireless and other areas, the 
Commission does not have forbearance authority. So I think it 
would be constructive to expand that authority to all aspects 
of what the Commission regulates.
    Mr. Latta. Thank you.
    Mr. Ramsay, if I could turn to your testimony. You state 
something there that I mentioned in my opening remarks. You 
state that ``Unquestionably, especially when there is certain 
lapses that occur, unfortunately, when that occurs, those with 
limited resources, small business, State commissions, 
consumers, consumer advocates, are disproportionately 
disadvantaged,'' and that is what I hear a lot back home from 
all these smaller companies out there that, you know, they 
don't have the resources. Can you just elaborate a little bit 
on that, how you see that for those that would be disadvantaged 
that have more limited resources?
    Mr. Ramsay. Well, the problem is, if you have fewer 
resources and you get--and again, I can go back to the 
transformational order that revised the entire Universal 
Service program at the federal level. There were literally 
hundreds of items that went into the record shortly before the 
deadline for further advocacy dropped, and if you only have one 
or two lawyers, and in my case, it is one lawyer, there is no 
way that you can go through and look at all of those materials 
and respond really at all, whereas larger, better funded people 
frequently can. In fact, larger and better funded people are 
frequently the source of a lot of the last-minute filings. So 
in this particular case, there are two or three provisions that 
I cite in my testimony that would level the playing field a 
little more for the consumer advocates, the State public 
utility commissions and the small businesses and small 
entities.
    Mr. Latta. Because that would also really impact those 
startups out there.
    Mr. Ramsay. Yes, I would think so, the people with limited 
resources.
    Mr. Latta. And I have met with a lot of the smaller 
startups and they are always concerned because, you know, they 
are just getting started and all of a sudden they don't have 
those dollars that they have to have to try to meet these 
regulations that are in place.
    And Mr. Chairman, I will yield back the balance of my time. 
Thank you very much.
    Mr. Walden. The gentleman yields back the balance of his 
time. The chair recognizes the gentleman from California, Mr. 
Waxman, for 5 minutes.
    Mr. Waxman. Thank you very much, Mr. Chairman. Before I get 
to my questions, I want to make a brief comment about the 
subject that was raised before we broke, and that was whether 
the FCC jurisdiction on the public interest is something in 
addition to the role of the Department of Justice and the 
Federal Trade Commission. Under the test, the FCC will approve 
a transaction if considering the potential consumer benefits 
and harms, it determines that the transaction is in the public 
interest. That is a little different than just the antitrust 
issues. For example, the FCC looks at the diversity of voices. 
They look to see whether certain populations are being served, 
low-income people, disabled people. They will look to see what 
the impact is on jobs. They will look at questions of access to 
telecommunications services. All of these are part of what the 
FCC deals with when we talk about public interest.
    The DOJ process is entirely confidential. The FCC process 
is generally open with public comment and advocacy subject to 
certain exceptions for proprietary information. So I don't want 
to leave anyone with the impression that we all agree and maybe 
you really don't all agree when you think about that the role 
is duplicative or less than critical for the FCC to maintain 
that power.
    When Chairman Walden circulated the discussion draft 
earlier this week that adds new provisions to the bill that was 
passed by the House last year, I believe these provisions 
further incapacitate the FCC, and I would like to ask our 
witnesses questions about two of these provisions.
    The draft legislation contains a new provision that 
requires the Commission when considering a rule with an 
economically significant impact--those are the words--to, among 
other things, ``make a reasoned determination that market 
forces and changes in technology are unlikely to resolve within 
a reasonable period of time'' the problems the Commission 
intends to address in the rule. In other words, the new 
language requires the FCC to determine whether technology and 
market changes will solve a problem and negate the need for 
regulation before issuing a rule.
    Mr. Ramsay, in your testimony, you suggest that this 
provision seems, at best, unnecessary because regulators should 
take a technology-neutral or functional approach to oversight 
of any market sector. Do you think basic principles like 
protecting consumers and promoting competition should be linked 
to changes in technology and are regulators in a good position 
to make predictive judgments about future changes in 
technology?
    Mr. Ramsay. I think the part of my testimony that addresses 
that was focused on the fact that technology and technology 
changes are only relevant to the extent that they actually 
impact market forces. The reasons for regulations--and NARUC 
has been on record for years. The reasons for regulation don't 
change ever, and they don't change based on the technology that 
is being used to provide a particular service. So in the case 
of----
    Mr. Waxman. Excuse me. Do you think this language is 
important to have, or do you think----
    Mr. Ramsay. I think the reference to technology is not 
necessary. It is perhaps a little confusing in the context of 
that Section 3 and it doesn't add anything to any type of 
determination of the level of competition that exists.
    Mr. Waxman. I thank you for that answer. I am going to move 
on to some other issues.
    The APA applies to all agencies, and this bill would accept 
that, which the chairman pointed out to me, that his bill 
specifically says that they are not excluding--``nothing in 
this Act or the amendment made by this Act shall relieve the 
FCC from any obligations under Title V, United States Code, 
except where otherwise expressly provided.''
    Now, Mr. Pierce, you have indicated that this adds another 
layer of requirements on the FCC which could be litigated, and 
what was once litigated under the APA may not apply when there 
are new provisions. Is that a correct statement of your view?
    Mr. Pierce. That is correct, and actually the provision you 
were just referring to is a good illustration of that. I mean, 
there is certainly nothing wrong with it. In fact, it would be 
laudable for the FCC to look at the relationship between market 
forces and technology and the need for regulation and look at 
the likelihood, but as soon as you put that in the statute, you 
have got more lawyers' work, and when it is an agency-specific 
statute, the likelihood is that it will take 15, 20 years 
before we get a settled judicial interpretation of what that 
means, and I don't have any idea what that--and I don't know 
what the triggering language will be.
    Mr. Waxman. I thank you for that answer.
    This draft legislation also contains a new provision that 
would require advance notice to the Commissioners of any 
decision or action taken at the bureau level, known as 
delegated authority, and the provision empowers two or more 
Commissioners to block any use of such delegated authority, 
instead require that the issue be considered by the full 
Commission. So two members can, in effect, hold hostage things 
that are routinely done at the bureau level. Now, most of what 
the FCC does in 2012, there are 165 items released by the full 
Commission, in 2014, items released at the bureau level. That 
means 92 percent of all the actions the FCC took last year were 
pursuant to delegated authority at the bureau level. So my 
concern is that if two Commissioners could block the exercise 
of this authority and require what could have been a routine 
matter to be addressed by all five Commissioners, that is going 
to be an extra burden. It is sort of like the Senate that can 
stop things from happening but putting holds on nominees or 
requiring a threat of a filibuster.
    Professor Benjamin, would you be concerned this might allow 
a minority of Commissioners to frustrate the will of the 
majority or the chairman's agenda, potentially adding weeks or 
months of delay to routine actions supported by the majority?
    Mr. Benjamin. Yes. The serious question would be, why would 
you want to empower a minority that way? Because there really 
are thousands of decisions that we are talking about, and right 
now there are fairly clear lines of authority in the Commission 
which makes for greater efficiency. So if I were a business 
before the agency with a routine matter, I would be concerned.
    Mr. Waxman. Thank you. My time is up. But Mr. McDowell 
wanted to respond.
    Mr. Walden. We will do that on Mr. Scalise's time, I think. 
Mr. Scalise?
    Mr. Scalise. If the chairman is so inclined, could I yield 
to the chairman?
    Mr. Walden. I would appreciate that. Thank you.
    So I want to point out why we have added that provision, 
and Mr. McDowell, as a Commissioner, please feel free not only 
to weigh in on Mr. Scalise's time subsequently yielded but also 
on what I am about to say.
    So it is routine, Mr. Benjamin, that they have these 
delegated authority and these things go through, but there has 
also been a custom, I believe, of 48-hour notice for the other 
Commissioners so they know what is going through on delegated 
authority. Recently, there was a case where an item was put on 
up on delegated authority on a Friday night triggering the 48-
hour notice over the weekend. Now, I don't think there was any 
mischief in that, but at some point here you could have a lot 
of mischief occur over a weekend. And so we are saying, you 
know, two Commissioners could say wait a minute, whoa, whoa, 
whoa, what are you doing on supposed delegated authority, 
because I don't think that is always clearly spelled out.
    But Mr. McDowell, are we hitting on something here?
    Mr. McDowell. A little bit of history here. First of all, 
it is rare for Commissioners to ask for anything that is being 
done under delegated authority to be elevated to an 8th-floor 
vote. It wouldn't be, with all due respect, akin to a hold in 
the Senate. What it is, it is asking for an 8th-floor vote on 
these things rather than the bureau issuing the role. And, you 
know, before this hearing I polled some of my former staff to 
ask them how many times did we actually ever want something to 
be elevated to an 8th-floor vote, and we could count on less 
than one hand the number of times in my 7 years there where 
that would actually happen. So it wouldn't hold things up per 
se. What it actually might do is in a way speed things up 
because bureau decisions can be brought to the 8th floor 
through petitions for reconsideration and other administrative 
vehicles, and that takes time to get to the 8th floor, so you 
could actually be short-circuiting that sort of appeals 
process, and also keep in mind, it is very rare. And by the 
way, in the past when it happened, I mean, one of the instances 
had to do with a switch digital issue and set-top boxes during 
Chairman Martin's tenure, and the other four Commissioners, two 
Republicans and two Democrats, we were very concerned about the 
direction that was heading in. It was an enforcement 
proceeding. So it was a bipartisan issue, the same with some 
other issues that I worked with Commissioners Copps and 
Adelstein on during that era. So it is very rare and also----
    Mr. Walden. Make it real quick because I am using up his 
time. So let us go to Mr. Scalise. Thanks for your indulgence.
    Mr. Scalise. Thank you for yielding back. Those are the 
exact questions I was thinking of asking myself, Mr. Chairman. 
I appreciate you asking them in a much more eloquent way with 
that great radio voice that you have.
    I am glad that we are having a hearing on FCC process 
reform. I was little surprised at the beginning of the hearing 
that there were some that were expressing objection or concern 
about us taking up FCC process reform, and obviously, Mr. 
Chairman, you have got two bills on this agenda that we are 
talking about, and both of them deal with, I think, very 
important reforms. But when you look--the IRS serves as a 
poster child for what happens when a federal agency thinks that 
they are no longer accountable to the American taxpayer, and 
you just look at the abuses that are happening because they 
weren't reform, because they didn't think that they had to 
answer to anybody. And so when we talk about reforming 
processes at the FCC, it is critical that Congress play this 
role. And look, if the Senate doesn't think it is important to 
have transparency and accountability and reform, let them go 
out and defend it, but shame on us if we don't exercise our 
responsibility in making sure that these federal agencies that 
we oversee are accountable, because we have seen some troubling 
examples at the FCC, and I think, Mr. Chairman, you pointed out 
some real concerns, especially as we have seen with mergers in 
the past and then the comments by Mr. Wheeler where he in 
essence was tacitly condoning the practice of the FCC literally 
just trying to hold up a merger unless companies would accept 
regulations, de facto regulations that Congress didn't even 
pass. So Congress said we don't think that this should be a 
law, and somebody at the FCC who thinks they are unaccountable 
says I think it should be a regulation anyway and even though I 
can't get it approved, I will just hold up a company's merger 
unless they agree to something that Congress doesn't even think 
should be passed, and I think that is a major concern of a lot 
of us. I think there is some real issues that need to be 
pursued on that. We need to get involved congressionally and 
stop them from doing this.
    Commissioner McDowell, in my last few seconds here, I want 
to ask you about it. First of all, I want to ask, does anybody 
on the panel think it is oK for the FCC to shake down a 
company, to hold up a merger over requiring them to accept a 
regulation that Congress didn't even pass? Does anybody want to 
defend that practice? I am glad to see, it is sort of like the 
thunderous applause you had, Commissioner McDowell. Nobody 
wants to defend it. But did you see it when you were at the 
FCC? Did you see that kind of what I think is unethical 
activity?
    Mr. McDowell. Sure. There are reasonable differences in 
interpretation of what the public interest is. I have had a lot 
of conversations with my colleagues over the years over this, 
and some think that anything that benefits the public is the 
cost of the transaction. I disagree with that. I think it has 
to do with, is there a merger-specific harm to consumers that 
needs to be cured. Others think that it is a broader 
interpretation of a public-interest standard, but that is 
precisely what the bill, I think, tries to address is to put a 
fence around that, a definition around what the public-interest 
standard would be.
    Mr. Scalise. I think that would be important to have, so I 
thank you, and I thank you, Mr. Chairman. I yield back.
    Mr. Walden. I now recognize the chairman emeritus of the 
committee, the gentleman from Michigan, Mr. Dingell.
    Mr. Dingell. Mr. Chairman, I thank you for your courtesy. I 
commend you for this hearing.
    Like the chairman, I am very much concerned about the 
somewhat curious functioning of the Federal Communications 
Commission, so I performed a very thoughtful analysis of the 
Commission Reform Act to see how it works, and one of my first 
concerns it, it seems to affect in a curious way 67 years of 
administrative law and related jurisprudence. It subjects only 
one federal agency to unique administrative procedures that 
will be different than all of the others and will open the door 
to years of litigation and uncertainty, ultimately stymieing, I 
think, rather than streamlining the work of the Commission.
    My questions this morning are directed to Mr. Benjamin and 
they concern only the draft Federal Communications Commission 
Process Reform Act. I hope you will oblige me, sir, with yes or 
no answers.
    Mr. Benjamin, with respect to the Commission's rulemaking 
authority, I note that Section 13(a)(2) of the draft bill 
mandates the Commission to fulfill a number of new requirements 
prior to amending or adopting a new rule. Is it your 
understanding that a party could challenge the Commission's 
completion of such new requirements in court? Yes or no.
    Mr. Benjamin. Yes.
    Mr. Dingell. Now, Mr. Benjamin, the practical effect of 
such judicial review would be to slow or to hinder the 
Commission's ability to promulgate new rules, yes or no?
    Mr. Benjamin. Yes.
    Mr. Dingell. And it would be a significant change in the 
Administrative Procedure Act, would it not?
    Mr. Benjamin. Yes, with respect to the FCC.
    Mr. Dingell. Now, Mr. Benjamin, the new requirements in 
Section 13(a)(2) contain undefined terms such as ``specific 
market failure'', ``actual consumer harm'', ``burden of 
existing regulation'' and ``reasonable period of time.'' Is it 
probable that interested stakeholders will challenge the 
Commission's application of such terms in the event 
stakeholders disagree with the Commission's ruling on a 
particular matter in court? Yes or no.
    Mr. Benjamin. Yes.
    Mr. Dingell. Now, Mr. Benjamin, again, the practical effect 
of such challenges would be to hinder and to slow the 
Commission's ability to agree on new rules or to amend or 
rescind existing rules. Yes or no?
    Mr. Benjamin. Yes.
    Mr. Dingell. Now, so far it would seem then that one of the 
draft bill's primary effects would be to sand the gears of the 
Commission when it comes to rulemaking. I would like to turn my 
attention to the draft bill's effect on the Commission's merger 
review authority.
    Now, Mr. Benjamin, Section 13(k)(1)(A) requires that the 
Commission impose conditions on transactions and transfers that 
are ``narrowly tailored to remedy a harm that would likely 
arise as a direct result'' of such transactions and transfers. 
Is it your opinion that this requirement will invite strict 
scrutiny by the courts of merger conditions imposed by the 
Commission? Yes or no.
    Mr. Benjamin. Yes.
    Mr. Dingell. And it would be a fine opportunity for repeal 
and judicial review, right?
    Mr. Benjamin. Sorry, repeal?
    Mr. Dingell. The conditions and so forth would be a fine 
opportunity for judicial review?
    Mr. Benjamin. Yes.
    Mr. Dingell. Now, Mr. Benjamin, is it your opinion that it 
will be extremely difficult to craft merger conditions that 
would satisfy Section 13(k)(1)(C) of the draft bill, which 
specifies that such conditions address a harm ``uniquely 
presented by the specific transfer of lines, transfer of 
licenses or other transactions such that the harm is not 
presented by persons not involved in the transfer or other 
transaction.'' Yes or no?
    Mr. Benjamin. I think I understand your question. Yes.
    Mr. Dingell. That is a wonderfully complex sentence too, 
isn't it?
    Now, Mr. Benjamin, additionally, I note that Section 
13(k)(2) of the bill prohibits the Commission from adopting 
voluntary merger conditions that are not consistent with the 
conditions I mentioned in my previous questions. Is it your 
opinion that such prohibition would serve as additional 
roadblock to merger approvals and to potentially diminish, if 
not eliminate, the Commission's role in merger reviews? Yes or 
no.
    Mr. Benjamin. Yes, in combination with the other 
provisions.
    Mr. Dingell. I am running out of time and I apologize to 
you.
    Now, finally, is it correct that the draft bill provides no 
additional authorizations of appropriations or personnel for 
the Commission to comply with the new requirements of the 
legislation which would impose a demand for new personnel, 
money and so forth through the agency? Yes or no.
    Mr. Benjamin. Yes.
    Mr. Dingell. So the long and short of this is that the 
draft bill then could conceivably hinder the Commission 
rulemakings but also severely restrict its ability to approve 
mergers. At this point I am rather distressed to note that the 
bill would impose a kind of curious Magnuson-Moss rulemaking 
requirement on the Commission which will not streamline its 
processes or provide it with resources with which to comply 
with the draft bill's new and more onerous mandates.
    I say this to you, Mr. Chairman, with affection and 
respect, in the hope that the committee will continue to seek 
the views of stockholders and stakeholders about the draft bill 
that will enable it to work to expeditiously conduct the 
business of the Commission, and I would hope that the 
thoughtful work of the committee will enable us to solve some 
of the questions that appear here to stand in the way of 
writing good legislation. I thank you for your courtesy to me.
    Mr. Latta [presiding]. Thank you. The gentleman's time has 
expired, and at this time the chair recognizes the gentleman 
from Illinois for 5 minutes.
    Mr. Kinzinger. Thank you, Mr. Chair, and thank you, 
gentlemen, and you made it to the bottom row so you are almost 
about to go home. Congrats.
    Thank you for being out here. The discussion we are having 
is important regarding the efficacy and efficiency of the 
regulatory environment. In looking through the written 
testimony, one statement that really caught my eye in Mr. 
Downes' testimony was transfers delayed are consumers 
underserved. That sums up a lot of this debate quite nicely.
    We are all trying our best to complete work that will best 
serve our constituents, but the problem is that overly caustic 
and non-standardized regulations keep delaying the possible 
benefits of the changes in the telecommunications industry for 
our constituents. With the continuing advances of technology 
occurring at such a rapid pace, I do believe that current FCC 
process needs to be reformed to deal with such a unique 
industry.
    That brings us to the topic of today's hearing, the draft 
legislation for FCC process reform and the FCC Consolidated 
Reporting Act. We discussed similar legislation in the 112th 
Congress, which actually passed the House in a bipartisan 
manner, and I am happy to see that we are back today discussing 
what I believe are much improved versions of those pieces of 
legislation.
    The FCC process reform draft will make great strides in 
improving the predictability, efficiency, and most importantly, 
the transparency of the FCC in its operations. Government 
transparency is a major key to gaining the trust of the 
American public, and this draft legislation includes a number 
of provisions that will not only standardize many of the 
actions of the FCC but will also make it more transparent to 
the general public.
    I would also like to add that I do appreciate the efforts 
of former Chairman Genachowski and Acting Chairwoman Clyburn on 
many of these issues. As I have said before, though, statutory 
authority should be what drives the decision-making process at 
the FCC, not the discretion of whomever may be the chair during 
a specific period of time.
    In response to some of the questions, however, that we just 
heard, I would like to ask Commissioner McDowell, I am going to 
give you a number of questions and we will do the yes-no thing 
if that works for you. While most agencies are subject to the 
APA, they don't all rely on procedures that differ to varying 
degrees such that no agency actually has the same processes. Is 
that correct?
    Mr. McDowell. Exactly, yes.
    Mr. Kinzinger. Do the new requirements in the bill 
requiring the FCC to actually justify its actions prior to 
adopting a rule constitute good government practices that will 
result in better rules?
    Mr. McDowell. Yes.
    Mr. Kinzinger. Do stakeholders currently challenge most of 
the Commission's significant decisions in court even when the 
FCC is on relatively firm ground?
    Mr. McDowell. Pretty much everything the FCC does gets 
appealed, yes.
    Mr. Kinzinger. Understood. Has poor FCC process and weak 
analysis caused the litigation?
    Mr. McDowell. It has, but again, everything gets appealed, 
even when it is strong.
    Mr. Kinzinger. All right. A lot of lawyers in this town.
    Mr. McDowell. Yes.
    Mr. Kinzinger. So is it fair to say the bill won't really 
increase the amount of litigation but actually might reduce it, 
do you think?
    Mr. McDowell. I don't know if it will reduce it but it 
could help make for better public policy.
    Mr. Kinzinger. OK. Does the FCC itself often adopt 
requirements that contain undefined terms?
    Mr. McDowell. All the time.
    Mr. Kinzinger. Does leaving some terms in the bill 
undefined and allowing the FCC to define them provide 
flexibility to the agency?
    Mr. McDowell. It provides more certainty, and therefore, 
for future Commissions would limit the sort of arbitrary nature 
of whoever is in those chairs interpreting more ambiguous 
terms.
    Mr. Kinzinger. Thank you. Doesn't the bill leave the 
public-interest standard intact and still allow the FCC to deny 
transactions or impose tailored conditions such as divestitures 
of certain assets?
    Mr. McDowell. Yes, and real briefly, I think it actually 
makes things more efficient in that regard. So if you are 
narrowing the scope of merger approval process and the 
substance of it, then you are actually, I think, speeding 
things up, that there are a lot of extraneous things that could 
not be examined because it is not specific to the merger.
    Mr. Kinzinger. And lastly, is it your belief that there are 
sufficient bodies at the FCC that some could be spared to help 
implement this new law and that the improvement in policy would 
be well worth the effort?
    Mr. McDowell. I think the improvement would be well worth 
the effort.
    Mr. Kinzinger. Excellent. With that, I have got 50 seconds 
left, I don't want to get into a new line of questioning, so 
Mr. Chairman, I will yield back. Do you want----
    Mr. Walden. If you don't mind yielding to the gentleman?
    Mr. Kinzinger. I will yield to the esteemed gentleman.
    Mr. Latta. The gentleman yields.
    Mr. Walden. So Mr. McDowell, just in the final 40 or so 
seconds here, we didn't get time to really get into chevron 
deference and what agencies can do, and the courts have a 
pattern of deferring to what agencies have done, if they have 
done their work, correct?
    Mr. McDowell. If they have done what? I am sorry.
    Mr. Walden. Well, if they have followed their procedures 
and they have shown how they complied, haven't courts also 
given chevron deference to the FCC in matters?
    Mr. McDowell. On procedure but also on the substantive 
statutory language if they are following that and are faithful 
to Congress's intent, yes.
    Mr. Walden. Because again, back to the Oregon example with 
the public utility commission, if you do your job, the courts 
will generally--isn't this true, Mr. Ramsay--defer to the 
expert agency?
    Mr. Ramsay. Particularly on factual terms, yes, sir.
    Mr. Walden. My time, your time is expired. I will let the 
chairman wrap it up.
    Mr. Latta. The gentleman's time has expired, and at this 
time I defer to the chairman to see if there is any further 
business to come before the committee?
    Mr. Walden. I don't believe so. We want to thank our 
witnesses, though, for your expert testimony. It is very 
helpful. We realize we have a work product in front of us. What 
you have suggested will help us refine that product and get it 
right, and we will continue our efforts to reform this agency 
in a way that makes it a leader for the other agencies, and 
since we don't have full jurisdiction over the APA, we can only 
do what we can do, but we are going to do it. So thank you all.
    Mr. Latta. Hearing no further business before the 
committee, the committee stands adjourned.

    [Whereupon, at 2:00 p.m., the subcommittee was adjourned.]

    [Material submitted for inclusion in the record follows:]

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