FCC Chairman to Step Down; Could Lead to Reversal of TCPA Ruling

In a brief statement, the Federal Communications Commission formally announced that Chairman Tom Wheeler will step down as of January 20, 2017, following more than three years at the agency. A quote from Wheeler said, "Serving as F.C.C. Chairman during this period of historic technological change has been the greatest honor of my professional life."

The Chairman's tenure was controversial, with the July 2015 Declaratory Ruling and Order on the Telephone Consumer Protection Act (TCPA) among the most contentious, especially for the ARM industry.

Following years of petitions - and waiting - for the agency to provide clarification on elements of the TCPA, a fact sheet describing proposed rules was published on May 27, 2015. The proposals were discussed at a hearing three weeks later, and then on July 10, it was revealed pubicly that the proposal had been accepted by a 3-2 majority of Commissioners along party lines. The three Democrats (including Chairman Wheeler) voted in favor of the Ruling while the two Republicans opposed it.

In March of 2016 the group testified before Congress, and we learned of the depth of disagreements between the Commissioners. It was clear that the Republican commissioners felt that the new Ruling went too far and was punitive to legitimate business.  The Democrat commissioners lumped all potential callers into the unscrupulous “robocaller” category. Commissioner Pai said this,

“First, the FCC continues to be run in a partisan fashion. Since December 2013, there have been 20 separate party-line votes at our monthly meetings.  That’s twice as many as under Chairmen Martin, Copps, Genachowski, and Clyburn combined.  Proposals from Republican Commissioners have been roundly rejected as crossing a “red line,” even when an identical proposal from a Democratic Commissioner is accepted later on.  And requests by Republican Commissioners to increase transparency or amend a proposal are routinely ignored, which means the Commission regularly adopts orders without any official response to our requests.

Second, collaboration has fallen by the wayside.  During my first eighteen months on the job, every Commissioner worked to reach consensus.  That maximized the chance that every Commissioner could vote for a proposal or order.  Under Chairman Genachowski and Chairwoman Clyburn, we reached consensus 89.5% of the time on FCC meeting items.  I can assure you that we did not always start out in the same place.  But we worked hard to reach agreements that everyone could live with.  And we usually succeeded.

It’s far different now.  All too often, softening the rough edges of an order to make it more palatable is off the table.  Narrowing the scope of a decision to achieve unanimity is rejected outright.  Indeed, consensus among the Commissioners no longer appears to be a goal.  Instead, the “rule of three” is the new norm.  Unsurprisingly, then, unanimity has precipitously dropped at the agency.  Commissioners have been able to reach consensus on only 56.4% of our monthly votes during Chairman Wheeler’s tenure.

Third, the FCC continues to choose opacity over transparency.  The decisions we make impact hundreds of millions of Americans and thousands of small businesses.  And yet to the public, to Congress, and even to the Commissioners at the FCC, the agency’s work remains a black box.

Commissioner O’Rielly’s testimony had a similar theme. He too spoke about a broken process and lack of transparency.

“Today, Commissioners do work together on certain issues – and I hopefully play some role in our bipartisan agreements.  However, the Commission is often fragmented, which is especially noticeable for the larger ticket items.  For instance, while I maintain a voting record of approximately 90 percent with the Chairman for circulated items, the percentage of open meeting items on which I have agreed is only approximately 65 percent.  That is up slightly from 62 percent a year ago, likely due to a recent effort to include one non-controversial item on each month’s agenda.  A significant reason for disagreements can be traced to procedural fouls that are unnecessary, unwise and harmful.

The Commission continues doing business as usual with all the corresponding difficulties.  We continue to see problems month after month stemming from the fact that the proposals we vote on are hidden from the public until it is too late for meaningful input.  In order to address this concern, it has now become a ritual for the Chairman’s office to release a one- or two-page, often inaccurate or misleading, “fact” sheet purporting to describe the details of each major proposal, along with one or more prose versions of the same talking points in the form of a press statement or blog post. [emphasis added]

...Further, the timing of when Commissioners actually get documents is problematic as it has become standard procedure for the Chairman’s staff to provide off-the-record briefings to favored reporters days before an item is circulated to Commissioners. The day of circulation, a major press roll-out occurs complete with press releases, blogs and “fact” sheets, but the actual document under consideration doesn’t hit my inbox until hours later, sometimes late at night. Meanwhile the press is reporting that the item has circulated and asking for comment.”

Indeed, in a conversation between O'Rielly and the Consumer Relations Consortium in January 2016 the Commissioner expressed dismay at the process that occurred relative to the TCPA Declaratory Ruling and Order, and suggested that he was surprised and frustrated by the outcome.

Last week the Republican-led Senate was scheduled to vote on the reconfirmation of Democrat Commissioner Jessica Rosenworcel for another 5 year term, however they took no action. This means it is likely she will be out at the end of December.

This leaves President-Elect Trump with the opportunity to appoint more business-friendly Commissioners, who may overturn or revise the latest TCPA Ruling, which would be a welcome development for the ARM and many other industries -- and a disappointment to consumer attorneys who have made a lucrative business out of TCPA litigation.

By Stephanie Eidelman