Tag Archives: Chairman Brendan Carr

Is the FCC an Independent Agency?

FCC Chairman Brendan Carr recently told Congress that he doesn’t believe that the FCC is an independent agency. The FCC went so far as to remove the term independent from its website. The bottom line of Chairman Carr’s opinion is that he believes the FCC should take direction from the White House.

It’s an interesting position that contradicts the long-standing intentions that the FCC, and many other federal agencies are independent, meaning that they don’t take directions directly from the Administration, but are required to follow whatever enabling laws and rules established by Congress. There are a number of independent agencies other than the FCC, including the EPA, SEC, Federal Reserve, NASA, CIA, FTC, SSA, and NTSB.

There are several key characteristics of independent agencies. First, they are not part of, and don’t report to any of the fifteen cabinet departments like State or Treasury. Independent agencies were generally established by Congress to be somewhat shielded from political pressure. For example, it’s not easy for the President to fire the head of an independent agency. The agencies are often structured with a multi-member Board or Commission, which typically includes rules that require representation from both parties. Some agencies like the SEC and the FCC are accorded rule-making power within a specified range of issues.

The FCC was created by Congress with the passage of the Communications Act of 1934. The agency has been directed by Congress to regulate radio, television, wire, satellite, cable, and the Internet. The Act did not include language that specified the FCC was independent. The independent status is inferred from the structural provisions in the Act that define how the agency operates. The relevant language appears in Section 4(a) of the Act (codified as 47 U.S.C. § 154(a)), which establishes the structure of the Commission. The Act created a commission of five (originally seven) members who are appointed by the President and confirmed by the Senate. The Commission must be bilateral, and no more than three members can be from the same political party. Commissioners serve for fixed, five-year terms. The FCC is required to follow laws passed by Congress aimed specifically at the agency.

The Supreme Court has explored issues related to independent agencies over the years. Supreme Court rulings, like Humphrey’s Executor v. United States (1935), defined a key element of an independent agency to be a lack of explicit legislative language giving a President the power to remove commissioners at will (i.e., for any reason). Instead, the ability to remove commissioners is widely understood to be limited to specific reasons like “inefficiency, neglect of duty, or malfeasance in office.” This structure of independent agencies is done deliberately to insulate agencies from direct presidential control and ensure decisions are based on the public interest rather than political pressure.

Chairman Carr’s statements are a direct challenge to Congress. Historically, independent agencies like the FCC are given general marching orders from Congress through legislation, but even then, the agency is free to interpret specifically how to enact laws. Chairman Carr says that he feels empowered to take direction directly from the White House, and it seems likely this will eventually trigger a showdown. At some point, Congress will have to assert its authority or cede its power to the Administration.

The FCC has never been free from politics, because almost nothing in Washington D.C. can be. The FCC Chairman has traditionally been from the same party as the White House and is typically sympathetic to policies of the administration. But there has always been an uproar if an FCC Chairman has been accused of directly taking direction from the administration. An example of this happened when Republicans accused Chairman Tom Wheeler of too closely following the White House direction on the issue of net neutrality.

The long-term repercussions of a political FCC are not good for the industry. While ISPs, carriers, and programmers all have a wish list of regulations they don’t like, there has always been a huge benefit for regulated companies to have regulatory certainty, which means that rules don’t change drastically with every change of administration. Regulated companies might complain loudly about being overregulated, but they benefit financially from knowing the rules, since this allows them to develop long-term strategies. Every large ISP will quietly admit that regulatory certainty is far better for them than rules that change with each Administration.

FCC to Review State AI Regulation

FCC Chairman Brendan Carr announced that the FCC will pursue the directive from the White House to review and possibly block state regulations related to artificial intelligence (AI). At an industry summit, he was quoted as saying that the FCC has authority under Section 253 of the Communications Act related to the FCC having authority to step in if a state of local law is prohibiting the deployment of modern infrastructure.

It’s been a while since I read 47 U.S. Code § 253, and it turns out that the language in that section is short and succinct:

In general, no State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.

 Nothing in this section shall affect the ability of a State to impose, on a competitively neutral basis and consistent with section 254 of this title, requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications service, and safeguard the rights of consumers.

 If, after notice and an opportunity for public comment, the Commission determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates subsection (a) or (b), the Commission shall preempt the enforcement of such statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency.

The FCC faces a regulatory conundrum if it tries to use Section 253 to regulate AI. It’s clear that Section  253 only applies to telecommunications services.

There are only two paths I can think of that would enable AI to be considered as a communications service. The obvious one is if Congress passes a law that says it is. However, I imagine the folks in the AI industry would fight hard not to be regulated like a telecommunications service.

The more roundabout way would be for the FCC to deem broadband to be a telecommunications service, and then somehow determine that AI comes along for the ride. That doesn’t seem likely since Chairman Carr had plans to immediately declare that broadband is not a telecommunications service when he became Chairman. He was saved from having to do that when, in early January, the U.S. Court of Appeals for the Sixth Circuit overturned the ruling from the previous FCC that put broadband under Title II regulation. That meant that the FCC reverted to the rules made by the Ajit Pai FCC that said that broadband is not a telecommunications service and can’t be regulated as such.

It’s hard to see a logical path to regulate AI as a telecommunications service if broadband is not telecommunications. I can’t think of a logical argument to enable that. It’s also not easy to claim that AI is communications. AI is mostly computer calculations done in a data center. AI prompts initiate from users and are carried to a data center via broadband, and the results are carried back to the customers via broadband. But there is no way in a fiber network that AI bits are different from any other kinds of bits.

I’ve never heard any argument that the other kinds of content that ride broadband networks can be considered to be a communications service. If AI is somehow considered to be communications, then so are responses from Google search, a movie from Netflix, and practically everything else that traverses the Internet. Every company that transmits content will vehemently oppose the idea that what they send over the Internet is a regulated communications service.

The FCC faces an additional challenge in trying to overturn State AI regulations. Several recent Court rulings have weakened the FCC’s authority. Loper Bright Enterprises v. Raimondo overturned the Chevron Doctrine, which brings into question the ability of the FCC to enact laws that were not specifically mandated by Congress. This year, McLaughlin Chiropractic v. McKesson Corp gave District Courts more leeway to disagree with rulings made by federal agencies like the FCC.

It’s clear that the FCC is going to tackle the issue, but it’s going to take some interesting regulatory and legal gymnastics to pull this off. Perhaps the FCC’s goal is to just tamp down State regulations before they are enacted, but a Google search tells me that every State either has passed or is considering regulations related to AI.

Eliminating Regulations

The FCC, under Chairman Brendan Carr, has issued a Public Notice asking for public input on eliminating regulations that create unneeded burdens or that stand in the way of the deployment, expansion, competition, or technological innovation.  The Notice is titled: ‘In Re: Delete, Delete, Delete.’

The Public Notice asks for comments of various types:

  • Cost-benefit Considerations. The FCC invites the public to comment on regulations where the cost of compliance is more than can be justified by the benefits. They ask commenters to take a stab at documenting the cost/benefit of proposed rule changes.
  • Experience Based on Implementation. This asks if some rules are too complex based on the experience of companies that must comply. Are there rules that are routinely waived because of the complexity?
  • Marketplace and Technological Changes. Have marketplace changes or new technologies made some rules obsolete?
  • Barriers to Entry. Are there regulations that act as a barrier to entry of new companies? (I must note that many such regulations are on the books at the request of monopoly providers).
  • A Broader Regulatory Context. Are there rules that are now obsolete due to later regulations that supplanted them?
  • Consideration of Court Decisions. This asks if there are regulations that might be considered in light of Supreme Court rules like Roper Bright that says that regulatory agencies shouldn’t undertake any major regulation that hasn’t been explicitly directed by Congress?

I have no doubt that every large company and lobbyist will trot out their wish list of regulations they would love to see eliminated. I have little doubt that there is somebody who dislikes every regulation on the FCC books. But there are a lot of obsolete regulations. For example, it’s ridiculous in today’s environment for the FCC to have rules about video channel lineups. There are a ton of rules on the books for technologies that are no longer in use.

It’s worth noting that the FCC already routinely ignores obsolete regulations, as do all regulatory agencies. While it’s cleaner to get old regulations off the books, it’s nearly as effective to not consider or enforce old rules that no longer apply.

The FCC also has to consider the source of various regulations. The agency does not have the authority, on it’s own, to eliminate a requirement imposed in the past by Congress. Eliminating such rules is fine as long as nobody objects, but doing so also opens the agency to lawsuits, which would be a colossal waste of time.

It’s a good idea for any regulatory agency to do this periodically as long as this is done well. This will hopefully not become an excuse to let large ISPs, wireless companies, TV and radio station owners, and others walk away from needed regulation.

What is most interesting about this effort is that Chairman Carr came into the position with a fairly long list of new regulations he’d like to see the FCC tackle. At the top of his list is a new look at the FCC’s role in regulating Section 230 related to web content.