Why Radical Deregulation Is Happening So Fast At The FCC

Chairman Ajit Pai is moving fast at the FCC

President Donald Trump has moved quickly to use Executive Orders and other plenary powers to deliver on some of his major campaign promises on issues such as immigration, the Dakota Access pipeline and appointment of a conservative Supreme Court Justice. For the most part, however, his promised deregulatory assault on what his chief strategist Steven Bannon calls the “Administrative State” has not advanced as quickly. Hundreds of top-level positions at Executive Branch agencies remain vacant, and the process of rescinding regulatory policies can be cumbersome and time consuming.

There is at least one important exception - media and telecommunications regulation at the Federal Communications Commission.

Within weeks after taking office, newly-designated FCC Chairman Ajit Pai has moved aggressively and with unprecedented speed to overturn many recent FCC decisions and changed some longstanding policies. While some of these actions are more symbolic in nature, others have had immediate and significant impact. Many more such actions are likely to be unveiled in the weeks, not to mention months, to come.

This is a very partial list of Chairman Pai’s early initiatives:

  1. Instructing agency attorneys not to defend the FCC’s authority to regulate intrastate prison phone rates in a court hearing held on February 6. (I was allowed to defend the intrastate rates in their stead.) While the agency’s attorneys did defend the Commission’s ability to regulate less-important interstate rates, Chairman Pai has indicated that if the FCC wins the case, he will likely set the rates at a higher level.
  2. Setting aside a decision admonishing a dozen TV stations for failure to comply with rules requiring them to place information about their sales of commercials concerning political issues.
  3. Overturning “policy guidance” that disfavored the use of certain contractual arrangements allowing broadcasters to evade the FCC’s rules limiting the number of TV stations one company can operate in a particular market.
  4. Staying the effectiveness of new rules requiring broadband Internet access service providers to protect their customers’ browsing and other data.
  5. Abandoning the FCC’s scrutiny of so-called “zero rating” practices under the Commission’s Network Neutrality rules. As a result, wireless carriers have been free to allow customers to use favored music and video content outside the companies’ monthly data caps.
  6. Setting aside orders designating nine companies to be national providers of subsidized Lifeline broadband services for low-income customers.
  7. Rescinding a cybersecurity policy white paper putting forth cybersecurity policies finding that market place forces are insufficient to protect the public and national security.
  8. Suspending an inquiry into a Comcast-affiliated video streaming service that appeared to violate the conditions imposed when Comcast was allowed to purchase NBC Universal.

Taken together, these and several other of Chairman Pai’s actions constitute a dramatic departure which is far more extensive, and far more rapid, than what any prior incoming Chairman has undertaken.

There are a number of reasons why things are moving so fast and so radically at the FCC.

First, Chairman Pai received a green light from President Trump to proceed at full speed. After meeting with then-Commissioner Pai before Inauguration Day, President Trump named him as his permanent Chair immediately after the President was sworn in. President Trump further enhanced his endorsement by inviting Chairman Pai to meet with him in the Oval Office on March 6 and re-nominating him for an additional five-year term shortly thereafter. The Presidential imprimatur gives Chairman Pai additional clout in dealing with fellow Republican Commissioner Michael O’Rielly and with GOP leaders in Congress.

Second, the fact that he was immediately named Chair enabled Chairman Pai to sprint out of the starting gate. While the President can designate a sitting Commissioner as the permanent Chair, that is not what he did for other independent agencies like the Federal Trade Commission and the Securities and Exchange Commission, where he named a sitting Republican Commissioner merely to serve as an Acting Chair. (This option is not available for single-headed Executive Branch departments and agencies like the Energy Department and the Environmental Protection Agency, where the Obama appointees departed and successors must be appointed and confirmed by the Senate.) Acting Chairs are placeholders who are expected to keep the agency functioning and deal with issues that require immediate action. However, they cannot recruit and appoint top-level staff and are not supposed to initiate major policy initiatives. Chairman Pai immediately installed his preexisting personal office staff as permanent appointees of the Chair and took immediate control of the mid-term and long-term policymaking process.

Third, Chairman Pai is extremely smart, knowledgeable and has a well-developed agenda. Ajit Pai is an especially adept politician. He is personally charming, with an “Aw shucks, I’m just a kid from rural Kansas” demeanor, the skills of a street politician who knows the names of all the secretaries and security guards, is comfortable discussing sports (both college and professional) and has a broad familiarity with popular culture. More importantly, he is a sophisticated and experienced lawyer with a comprehensive knowledge of the issue areas honed by five years issuing comprehensive and detailed dissents that he can now turn into majority opinions.

Fourth, as this author has previously explained, Chairman Pai’s predecessor, Tom Wheeler, understood that he had three years to carry out his agenda. Wheeler took all the right steps to start and complete his game plan by January 2017. He was remarkably successful in getting most, although not all, of his major projects completed by then. However, many of these decisions were not adopted until the latter half of 2016 and were subjected to administrative and judicial appeals. Because they were not “final” as a matter of law, Chairman Pai has the power to suspend implementation or vacate some of them.

This is only the beginning. Chairman Pai is well aware of the value of moving quickly before opponents can get momentum to try to stop him. He also knows that, as this author earlier discussed, the Communications Act gives him several unusually powerful tools to press for rapid deregulation. He clearly intends to use them.

By Andrew Jay Schwartzman.