The Regulatory Mix - Wednesday, May 20, 2015

The Regulatory Mix, TMI’s daily blog of regulatory activities, is a snapshot of PUC, FCC, legislative, and occasionally court issues that our regulatory monitoring team uncovers each day. Depending on their significance, some items may be the subject of a TMI Regulatory Bulletin.

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US Congress

The House Subcommittee on Communications and Technology is meeting today to consider a number of bills aimed at improving transparency and process at the FCC. Members reviewed these proposals during subcommittee hearings on April 30 and May 15. See the Regulatory Mix dated 5/15/15, 5/4/15, and 4/22/15. Bills to be marked-up include:

• a draft bill of the FCC Process Reform Act that aims to increase transparency and predictability at the FCC;
• a draft bill that would require the FCC to publish a list of items that are to be decided at the bureau level in lieu of a commission vote;
• a draft bill that would require the FCC to publish the draft of a rulemaking, order, report, or any other action when it is circulated to the commissioners for a vote;
• a draft bill that would require the FCC to publish new rules on the same day that they are adopted;
• a draft bill that would require the FCC to report quarterly to Congress and to post on the FCC website data on the total number of decisions pending categorized by bureau, the type of request, and how long the requests have been pending;
• a draft bill that would require the Chairman to post the FCC’s internal procedures on the FCC website and update the website when the Chairman makes any changes; and
• a draft bill that would require the FCC to coordinate with the Small Business Administration and issue recommendations to improve small business participation in FCC proceedings.

North Caroline & Tennessee

The State of North Carolina filed a Petition for Review with the US Court of Appeals for the Fourth Circuit. NC asks that the Court review the final order of the FCC (FCC 15-25, WC Docket Nos., 14-115 and 14-116; released on March 12, 2015) which preempts North Carolina’s statutory law (N.C.G.S. §160A-340.1 et seq.) and provisions of Session Law 2011-84 governing municipal provisioning and operation of broadband communications services. The NC petition says that despite recognition that the State creates and retains control over municipal governments, the FCC unlawfully inserted itself between the State and the State’s political subdivisions.

The State of Tennessee filed a Petition for Review with the US Court of Appeals for the Sixth Circuit for review of the same FCC Order mentioned above. The TN petition says that the FCC preempts Tennessee law pertaining to the operation of municipal electric plants, including the Electric Power Board of Chattanooga, an instrumentality of the City of Chattanooga, created and controlled by the State of Tennessee. In so doing, TN says that the FCC has unlawfully inserted itself between the State of Tennessee and the State’s own political subdivisions.

Both TN and NC seek relief on the grounds that the FCC’s Order:

1. is contrary to the United States Constitution;
2. is in excess of the FCC’s authority;
3. is arbitrary, capricious, and an abuse of discretion within the meaning of the Administrative Procedure Act; and
4. is otherwise contrary to law.

The FCC requested that the NC petition be transferred to the Sixth Circuit to be consolidated with the Tennessee petition for review. The FCC’s motion was granted. In its Order the FCC said that it concluded that it has authority to preempt state laws that “primarily serve to regulate competition in the broadband market. We reach this conclusion because we read Section 706 to authorize the Commission to displace state laws that effectuate choices about the substance of communications policy that conflict with the federal communications policy of ensuring “reasonable and timely” deployment of broadband. To be clear, we do not assert that state policy preferences about the competitive landscape for broadband are inherently illegitimate. We find only that where, as here, they conflict with the federal policy set out in section 706 they must be preempted.”