**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

In the Matter of )

)

Amendment of Section 19.735-203 )

And Addition of Section 0.458 )

of the Commission\'s Rules Concerning )

Nonpublic Information )

## ORDER

**Adopted: October** **12, 2000** **Released: October 18, 2000**

By the Commission: Commissioner Furchtgott-Roth dissenting and issuing a
statement; Commissioner Powell issuing a statement.

1\. Recent unauthorized disclosures of nonpublic internal Commission
draft orders and documents in market-sensitive proceedings prompt us to
adopt this order to amend Section 19.735-203 of our rules, 47 C.F.R. §
19.735-203. Section 19.735-203 currently governs the disclosure and
misuse by Commission personnel of nonpublic information that is
contained in Commission records or obtained in connection with
Commission employment. The purpose of the amendment is to emphasize the
responsibilities of Commission employees in this area and to provide
guidance to persons who receive nonpublic documents under circumstances
where it appears that the release of the documents was either
inadvertent or otherwise unauthorized.

2\. Currently, Section 19.735-203 prohibits the unauthorized release of
nonpublic information, including documents, by Commission officials.
Specifically, Section 19.735-203(a) states that "\[e\]xcept as
authorized in writing by the Chairman ..., or otherwise as authorized by
the Commission or its rules, nonpublic information shall not be
disclosed, directly or indirectly, to any person outside the
commission." Such nonpublic information clearly includes drafts of
Commission orders, memoranda and other documents (such as e-mail)
containing internal staff recommendations. *See* 5 C.F.R. § 2635.703
("nonpublic information is information that ... has not been made
available to the general public" including documents that are
"designated as confidential by an agency."). We take this opportunity to
emphasize that, pursuant to Section 19.735-107 of our rules, employees
that disclose such documents (or their contents) are subject to
significant disciplinary action up to and including removal for cause,
in addition to any other penalty prescribed by law. *See* 47 C.F.R. §
19.735-107. Our amendment of Section 19.735-203 cross-references this
rule governing the Commission's disciplinary and remedial authority,
which is reprinted in its entirety in Appendix B to this Order for easy
reference.

3\. Our rules prohibiting the disclosure of nonpublic information serve
to protect the integrity of the Commission's deliberative processes.
Disclosure by Commission staff of draft orders, internal confidential
memoranda and nonpublic information violates these rules, and we will
vigorously investigate and address violations of these rules by
Commission personnel.

4\. While our existing rules and our guidance in this order make clear
our commitment to ensure that Commission personnel do not disclose
nonpublic documents, the existing rules do not address the steps that
are to be taken by persons regulated by or practicing before the
Commission who receive such documents. The revision to Section
19.735-203 adds language requiring such persons who come into possession
of written nonpublic information (including written material transmitted
in electronic form), the release of which they know or reasonably should
know was either inadvertent or otherwise unauthorized, to promptly
return such written nonpublic information to the Commission's Office of
the Inspector General, without further distribution or use of the
material.

5\. Persons regulated by or practicing before the FCC may be subject to
appropriate sanctions for willful violation of this section. In the case
of attorneys practicing before the Commission such sanctions may include
disciplinary action under the provisions of § 1.24 of the Commission's
rules. (*Cf., D.C. Rules of Professional Conduct*, Rule 1.15 and
*Opinion no. 256,* adopted May 16, 1995. *See also: ABA Formal Opinion
92-368,* Nov. 10, 1992; Florida Bar Op. 93-3, Feb. 1, 1994; and Oregon
Bar Formal Op. No. 1998-150, approved Apr. 1998). Section 1.24 of our
rules is reprinted in its entirety in Appendix B to this Order for easy
reference.

6\. The revision also adds a cross reference to Section 19.735-203 in a
new section 0.458 of the Commission's rules, 47 C.F.R. § 0.458. New
Section 0.458 is within the Commission's Part zero rules dealing with
public and nonpublic information.

7\. The requirements set forth in 5 U.S.C. § 553(b) and (d) pertaining
to notice and comment and the effective date in rulemaking proceedings
do not apply to this amendment because it concerns matters of agency
organization, procedure or practice. *See* 5 U.S.C. 553(b)(A); 553(d).

8\. Accordingly, IT IS ORDERED that effective thirty days following the
publication of this item in the *Federal Register*, Parts 0 and 19 of
the Commission\'s rules, 47 C.F.R. Part 19, ARE AMENDED as set forth in
the Appendix. Authority for such action is found in Sections 4(i), 4(j),
and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. §§
154(i), 154(j), and 303(r).

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

**APPENDIX A**

Section 19.735-203 of Part 19 of Chapter 1 of Title 47 of the Code of
Federal Regulations is amended as follows:

1\. A new (d), is added after paragraph (c), and shall read as follows:

**§ 19.735-203 Nonpublic Information**

\(d\) Any person regulated by or practicing before the Commission coming
into possession of written nonpublic information (including written
material transmitted in electronic form) as described in paragraph (a)
under circumstances where it appears that its release was inadvertent or
otherwise unauthorized shall promptly return the written information to
the Commission's Office of the Inspector General without further
distribution [or use]{.underline} of the written nonpublic information.
Any person regulated by or practicing before the Commission who
willfully violates this section by failing to promptly notify the
Commission's Office of the Inspector General of the receipt of written
nonpublic information (including written material transmitted in
electronic form) that he knew or should have known was released
inadvertently or in any otherwise unauthorized manner may be subject to
appropriate sanctions by the Commission. In the case of attorneys
practicing before the Commission, such sanctions may include
disciplinary action under the provisions of § 1.24.

2.  The following sentence is added after the first sentence of the note
    following paragraph (d):

Additionally, employees should refer to § 19.735-107 of this part, which
provides that employees of the Commission who violate this part may be
subject to disciplinary action which may be in addition to any other
penalty prescribed by law.

A new Section 0.458 of Part 0 of Chapter 1 of Title 47 of the Code of
Federal Regulations is added as follows:

[]{.mark}

**§ 0.458 Nonpublic Information**

Any person regulated by or practicing before the Commission coming into
possession of written nonpublic information (including written material
transmitted in electronic form) as described in Section 19.735-203(a) of
this chapter under circumstances where it appears that its release was
inadvertent or otherwise unauthorized shall be obligated to return the
information to the Commission's Office of Inspector General pursuant to
that section. See 47 C.F.R. § 19.735-203.

**APPENDIX B**

# 47 C.F.R. § 19.735-203 Nonpublic information, as amended

\(a\) Except as authorized in writing by the Chairman pursuant to
paragraph (b) of this section, or otherwise as authorized by the
Commission or its rules, nonpublic information shall not be disclosed,
directly or indirectly, to any person outside the Commission. Such
information includes, but is not limited to, the following:

\(1\) The content of agenda items (except for compliance with the
Government in the Sunshine Act, 5 U.S.C. 552b); or

\(2\) Actions or decisions made by the Commission at closed meetings or
by

circulation prior to the public release of such information by the
Commission.

\(b\) An employee engaged in outside teaching, lecturing, or writing
shall not use nonpublic information obtained as a result of his
Government employment in connection with such teaching, lecturing, or
writing except when the Chairman gives written authorization for the use
of that nonpublic information on the basis that its use is in the public
interest.

\(c\) This section does not prohibit the disclosure of an official
Commission meeting agenda listing titles and summaries of items for
discussion at an open Commission meeting. Also, this section does not
prohibit the disclosure of information about the scheduling of
Commission agenda items.

\(d\) Any person regulated by or practicing before the Commission coming
into possession of written nonpublic information (including written
material transmitted in electronic form) as described in paragraph (a)
under circumstances where it appears that its release was inadvertent or
otherwise unauthorized shall promptly return the written information to
the Commission's Office of the Inspector General without further
distribution [or use]{.underline} of the written nonpublic information.
Any person regulated by or practicing before the Commission who
willfully violates this section by failing to promptly notify the
Commission's Office of the Inspector General of the receipt of written
nonpublic information (including written material transmitted in
electronic form) that he knew or should have known was released
inadvertently or in any otherwise unauthorized manner may be subject to
appropriate sanctions by the Commission. In the case of attorneys
practicing before the Commission, such sanctions may include
disciplinary action under the provisions of § 1.24.

Note: Employees also should refer to the provisions of the Standards of
Ethical Conduct for Employees of the Executive Branch, at 5 CFR
2635.703, on the use of nonpublic information. Additionally, employees
should refer to § 19.735-107 of this part, which provides that employees
of the Commission who violate this part may be subject to disciplinary
action which may be in addition to any other penalty prescribed by law.

As is the case with section 2635.703, this part is intended only to
cover knowing unauthorized disclosures of nonpublic information.

**47 CFR § 19.735-107 Disciplinary and other remedial action.**

\(a\) A violation of the regulations in this part by an employee may be
cause for appropriate disciplinary action which may be in addition to
any penalty prescribed by law.

\(b\) The Chairman will designate an officer or employee of the
Commission who will promptly investigate all incidents or situations in
which it appears that employees may have engaged in improper conduct.
Such investigation will be initiated in all cases where complaints are
brought to the attention of the Chairman, including: Adverse comment
appearing in publications; complaints from members of Congress, private
citizens, organizations, other Government employees or agencies; and
formal complaints referred to the Chairman by the Designated Agency
Ethics Official.

\(c\) The Inspector General will be promptly notified of all complaints
or allegations of employee misconduct. The Inspector General will also
be notified of the planned initiation of an investigation under this
part. Such notification shall occur prior to the initiation of the
investigation required by paragraph (a) of this section. The Inspector
General may choose to conduct the investigation in accordance with the
rules in this part. Should the Inspector General choose to conduct the
investigation, he will promptly notify the Chairman. In such case, the
Inspector General will serve as the designated officer and be solely
responsible for the investigation. In carrying out this function, the
Inspector General may obtain investigative services from other
Commission offices, other governmental agencies or non governmental
sources and use any other means available to him in accordance with
Public Law 100-504 or the Inspector General Act of 1978, as amended, 5
U.S.C. Appendix. The Inspector General will be provided with the results
of all investigations in which he chooses not to participate.

\(d\) The employee concerned shall be provided an opportunity to explain
the alleged misconduct. When, after consideration of the employee\'s
explanation, the Chairman decides that remedial action is required, he
shall take remedial action. Remedial action may include, but is not
limited to:

\(1\) Changes in assigned duties;

\(2\) Divestiture by the employee of his conflicting interest;

\(3\) Action under the Commission\'s Ethics Program resulting in one of
the following actions:

\(i\) When investigation reveals that the charges are groundless, the
person designated by the Chairman to assist in administration of the
program may give a letter of clearance to the employee concerned, and
the case will not be recorded in his Official Personnel Folder;

\(ii\) If, after investigation, the case investigator deems the act to
be merely a minor indiscretion, he may resolve the situation by
discussing it with the employee. The case will not be recorded in the
employee\'s Official Personnel Folder;

\(iii\) If the case administrator considers the problem to be of
sufficient importance, he may call it to the attention of the Chairman,
who in turn may notify the employee of the seriousness of his act and
warn him of the consequences of a repetition. The case will not be
recorded in the employee\'s Official Personnel Folder, unless the
employee requests it;

\(iv\) The Chairman may, when in his opinion circumstances warrant,
establish a

special review board to investigate the facts in a case and to make a
full report thereon, including recommended action; or

(v)(A) If the Chairman decides that formal disciplinary action should be
taken, he may prepare for Commission consideration a statement of facts
and recommend one of the following:

\(1\) Written reprimand. A formal letter containing a complete statement
of the offense and official censure;

\(2\) Suspension. A temporary non pay status and suspension from duty;
or

\(3\) Removal for cause. Separation for cause in case of a serious
offense.

\(B\) Only after a majority of the Commission approves formal
disciplinary action will any record resulting from the administration of
this program be placed in the employee\'s Official Personnel Folder; or

\(4\) Disqualification for a particular assignment.

\(e\) Remedial action, whether disciplinary or otherwise, shall be
effected in accordance with any applicable laws, Executive orders, and
regulations.

**47 CFR § 1.24 Censure, suspension, or disbarment of attorneys.**

\(a\) The Commission may censure, suspend, or disbar any person who has
practiced, is practicing or holding himself out as entitled to practice
before it if it finds that such person:

\(1\) Does not possess the qualifications required by § 1.23;

\(2\) Has failed to conform to standards of ethical conduct required of
practitioners at the bar of any court of which he is a member;

\(3\) Is lacking in character or professional integrity; and/or

\(4\) Displays toward the Commission or any of its hearing officers
conduct which, if displayed toward any court of the United States or any
of its Territories or the District of Columbia, would be cause for
censure, suspension, or disbarment.

\(b\) Except as provided in paragraph (c) of this section, before any
member of the bar of the Commission shall be censured, suspended, or
disbarred, charges shall be preferred by the Commission against such
practitioner, and he or she shall be afforded an opportunity to be heard
thereon.

\(c\) Upon receipt of official notice from any authority having power to
suspend or disbar an attorney in the practice of law within any state,
territory, or the District of Columbia which demonstrates that an
attorney practicing before the Commission is subject to an order of
final suspension (not merely temporary suspension pending further
action) or disbarment by such authority, the Commission may, without any
preliminary hearing, enter an order temporarily suspending the attorney
from practice before it pending final disposition of a disciplinary
proceeding brought pursuant to § 1.24(a)(2), which shall afford such
attorney an opportunity to be heard and directing the attorney to show
cause within thirty days from the date of said order why identical
discipline should not be imposed against such attorney by the
Commission.

\(d\) Allegations of attorney misconduct in Commission proceedings shall
be

referred under seal to the Office of General Counsel. Pending action by
the General Counsel, the decision maker may proceed with the merits of
the matter but in its decision may make findings concerning the
attorney\'s conduct only if necessary to resolve questions concerning an
applicant and may not reach any conclusions regarding the ethical
ramifications of the attorney\'s conduct. The General Counsel will
determine if the allegations are substantial, and, if so, shall
immediately notify the attorney and direct him or her to respond to the
allegations. No notice will be provided to other parties to the
proceeding. The General Counsel will then determine what further
measures are necessary to protect the integrity of the Commission\'s
administrative process, including but not limited to one or more of the
following:

\(1\) Recommending to the Commission the institution of a proceeding
under paragraph (a) of this section;

\(2\) Referring the matter to the appropriate State, territorial, or
District of Columbia bar; or

\(3\) Consulting with the Department of Justice.

# DISSENTING STATEMENT OF COMMISSIONER 

# HAROLD W. FURCHTGOTT-ROTH

In the Matter of Amendment of Section 19.735-203 of the Commission's
Rules Concerning Nonpublic Information

The problem with the disclosure of non-public information -- *i.e.,*
leaks \-- at this Commission is a cultural, not a regulatory, one. We
already have on our books a clear proscription against the
non-authorized disclosure of, among other things, the content of agenda
items or actions taken by the Commission on circulation. *See* 47 C.F.R.
section 19.735-203(a). Rather than burdening the communications industry
and bar with yet another layer of regulation, the Commission should
first enforce the existing rule. After all, leaks spring from the
inside, not the outside, of this building.

Admittedly, it may be difficult to discern who is ultimately responsible
for a given leak. But that just points up the fact that, in the end, we
must rely upon the integrity of those who work at the Commission, and
upon the leadership of those who head it, to ensure respectful
observance of the non-disclosure rule. Unfortunately, the Commission in
this item deflects from itself any responsibility for the many recent
high-profile leaks that prompted today's action, instead reacting to
those events by adopting new rules to govern the conduct of others. For
these reasons, I respectfully dissent.

**SEPARATE STATEMENT OF COMMISSIONER**

**MICHAEL K. POWELL**

**In the Matter of Amendment of Section 19.735-203 of the Commission\'s
Rules Concerning Nonpublic Information Order**

This *Order* would seem to help curtail the flood of document leaks out
of this Commission, but no rule change will have any effect on this
endemic problem unless we vigorously enforce our own internal rules and
tighten our document handling procedures.

The regular pattern of leaks of pre-decisional written material is
intolerable. They damage the deliberative prerogatives of the individual
Commissioners and impair the integrity of the entire agency. This brief
*Order* is *part* of the solution and I support it. This rule change
imposes responsibilities on certain outside parties to help the FCC's
Inspector General appropriately retrieve *written* materials that are
leaked. And, the new rule subjects such *outside* parties to possible
disciplinary action. This step could help prevent a wider dissemination
of our pre-decisional documents after they have left the premises, but I
have to admit that the change does little to plug the dike in the first
place.

We need stronger enforcement of our current rules, including a zero
tolerance policy for all leaks. Outside parties---including the press
which are correctly excluded from this new rule---who entice our
valuable employees to leak non-public information should be on notice as
to the peril in which they are placing their "moles." Likewise, our
employees must be well informed and educated about their
responsibilities and their fate should they disclose non-public
information without proper authorization. This item notifies everyone
inside and outside the Commission of the possible consequences. I would
also suggest that, to the extent that there is evidence that outside
parties are obtaining non-public materials by other means not involving
FCC employees directly or knowingly, appropriate law enforcement
officials should be called in immediately.

But, it will also take more than disciplinary actions or threat of such
actions against persons inside and outside of the Commission. I agree
with Commissioner Furchtgott-Roth that it will take a change in the
culture that has come now to expect such unauthorized disclosures as the
way things are done.

I, therefore, not only support the rule changes in this *Order*, but I
have joined the Chairman and my colleagues in requesting the Inspector
General and the Managing Director closely and expeditiously examine the
Commission's internal management of nonpublic information. I plan to
personally and substantially involve myself in this task. We need strong
enforcement, disciplinary action and preventative measures to make any
headway toward shifting expectations and the culture of the handling of
non-public deliberative materials and information.

To paraphrase Donny Osmond, "one bad apple should not spoil the whole
bunch." We have got a great group of employees who are very loyal and
dedicated to this agency and I am not placing blame at any level. This
is an institutional problem that needs fixing and we need the help of
all parties both inside and outside the agency.

\- FCC -