Too Much Power, Too Little Restraint: How the FCC Expands Its Reach Through Unenforceable and Unwieldy “Voluntary” Agreements

Those who really deserve praise are the people who, while human enough to enjoy power, nevertheless pay more attention to justice than they are compelled to do by their situation. -- Thucyclides I. INTRODUCTION The character of a regulatory agency is most severely tested at the zenith of its power. When the Federal Communications Commission ("FCC" or "Commission") breaks free of the limitations imposed by the law, the Commission's leadership sets its own course. It is at these times, when legal oversight is at a minimum, that it becomes most important for the agency to "pay more attention to justice." Unfortunately, as outlined below and in Commissioner Furchtgott-Roth's separate statements, the FCC has often failed this test of institutional character.(1) Indeed, the Commission seems to capitalize on these situations to achieve goals that would not be attainable through traditional policymaking. The result is a far-reaching, unenforceable, opaque and ultimately arbitrary policy and process that undermines both the Commission's standing and the public interest. These criticisms spring from three fundamental principles of regulatory policy: (1) an agency should never act beyond its jurisdiction--even when it may "get away with it"--because it detracts from its statutorily defined mission, (2) an agency should not promulgate obligations that it is not prepared to enforce fully because it undermines the agency's credibility, and (3) rules should be generally applicable and transparent to the public. Following these principles, the Commission can readily achieve its public policy objectives without resorting to its current circuitous approach. Nonetheless, in at least the three contexts set forth below--license transfers, national security review, and consent decrees--the Commission has proven to be something less than a benevolent master. In each case, the Commission has an appropriate and limited role to play under the Communications Act of 1934 ("Act"). In each case, however, that role lies outside the traditional scope of judicial review. Unfortunately, in each case, the current Commission leadership uses the confluence of the vulnerability of licensees and the absence of legal oversight to advance its particular public policy agenda; impose many requirements it cannot or will not enforce; and facilitate the creation of vast company-specific regulatory regimes that undermine transparency and predictability. II. EVASION OF LEGAL OVERSIGHT The Commission's ability to exploit its power to achieve policies outside its mandate depends on the agency's ability to escape judicial and, to a lesser degree, congressional review. In theory, a number of forces should constrain the FCC's authority. Most fundamentally, the Act, like other delegations of congressional authority, delineates the scope of the Commission's authority over the communications marketplace.(2) Essential to this statutory scheme is the ability of aggrieved parties to obtain judicial review of the FCC's actions.(3) Through judicial review, the courts limit the Commission's discretion to act by enforcing legislative limitations and holding the FCC to standards of reasoned decisionmaking and constitutional norms.(4) Beyond the limits imposed by the Act and the courts, Congress impacts the FCC's authority through appropriations and oversight.(5) Theoretically, these constraints require the Commission to stay within its regulatory and jurisdictional boundaries and to engage in reasoned and publicly documented decision-making procedures. In practice, however, traditional limitations on the Commission's authority have not always applied. In license-transfer proceedings, national security reviews, and consent decrees, procedural loopholes and circumstance create opportunities for the Commission to operate free of the discipline imposed by the statute and administrative procedure. Certain license-transfer proceedings provide perhaps the most visible example. …