Telecommunications: FCC Should Take Steps to Ensure Equal Access to Rulemaking Information
Published: 2007-09-06T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Federal Communications Commission (FCC) is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. The Telecommunications Act of 1996 established that FCC should promote competition and reduce regulation to secure lower prices and higher-quality services for American consumers. FCC implements its policy aims through rulemaking, whereby the agency notifies the public of a proposed rule and provides an opportunity for the public to participate in the rule's development. These rulemakings are documented within a public docket that contains the rulemaking record. In response to a congressional request on FCC rulemaking, GAO (1) described FCC's rulemaking process; (2) determined, for specific rulemakings, the extent to which FCC followed its process; and (3) identified factors that contributed to some dockets and rulemakings remaining open. GAO reviewed recent FCC rules, interviewed FCC officials and stakeholders, and conducted case studies of rulemakings.
section_title: What GAO Found
paragraphs: FCC's rulemaking process includes multiple steps as outlined by law, with several opportunities for public participation. FCC generally begins the process by releasing a Notice of Proposed Rulemaking and establishing a docket to gather information submitted by the public or developed within FCC to support the proposed rule. Outside parties may meet with FCC officials but must file a disclosure in the docket, called an ex parte filing, that includes any new data or arguments presented at the meeting. FCC analyzes information in the docket and drafts a final rule for the commission to adopt. The FCC chairman decides which rules the commission will consider and whether to adopt them by vote at a public meeting or by circulating them to each commissioner for approval. Stakeholders unsatisfied with a rule may file a petition for reconsideration with the commission or petition for review in federal court. FCC generally followed the rulemaking process in the four case studies of completed rulemakings that GAO reviewed, but several stakeholders had access to nonpublic information. Specifically, each of the four rulemakings included steps as required by law and opportunities for public participation. Within the case studies, most ex parte filings complied with FCC rules. However, in the case studies and in discussions with other stakeholders that regularly participate in FCC rulemakings, multiple stakeholders generally knew when the commission scheduled votes on proposed rules well before FCC notified the public. FCC rules prohibit disclosing this information outside of FCC. Other stakeholders said that they cannot learn when rules are scheduled for a vote until FCC releases the public meeting agenda, at which time FCC rules prohibit stakeholders from lobbying FCC. As a result, stakeholders with advance information about which rules are scheduled for a vote would know when it is most effective to lobby FCC, while stakeholders without this information would not. The complexity and number of rulemakings within a docket and the priority the commission places on a rulemaking contribute to dockets and rulemakings remaining open. The commission determines when to open and close a docket and which rulemakings are a priority; therefore, the commission determines how a docket and rulemaking progress. Dockets and the rulemakings within them may remain open because the dockets are broad and include multiple rulemakings, or because the commission has not yet voted to close the dockets even though they include completed rules. Within dockets, some rulemakings may remain open because they involve complex, technical issues or because competing priorities can force FCC officials to work on one rulemaking as opposed to another. Stakeholders generally said they are not concerned about the number of open dockets.

section_title: Letter
paragraphs: Federal Communications Commission (FCC) regulations potentially affect  the daily lives of every American, from rules governing who may own the  morning newspaper to the networks connecting the last long-distance  telephone call at night. These regulations have a direct influence on how  consumers and businesses access telecommunications and media services  by, for example, providing the regulatory framework for the digital  broadcasting transition, facilitating the deployment of broadband services,  and fostering competition to achieve a wider range of communications  services. FCC-regulated industries provide Americans with daily access to  local and long-distance communications services, mobile telephone  services, broadband Internet services, and free over-the-air radio and  television broadcasts. FCC also serves other important public interests,  working to ensure that Americans have access to 911 services, that  emergency responders can communicate effectively to provide for public  safety, and that underserved (typically, rural or low-income) areas have  access to reasonably priced communications services.
The Communications Act of 1934 (Communications Act) established FCC  as an independent regulatory agency responsible to Congress. The  Communications Act, which the Telecommunications Act of 1996  (Telecommunications Act) substantially revised, tasks FCC with regulating  methods of electronic communication to foster a competitive  environment, with an emphasis on the public interest. To implement the  intent of these and other laws, FCC makes regulations (or rules) through a  process that is largely defined in law. This process requires FCC to provide  the public with notice of its proposed and final rules and with an  opportunity to comment as the rules are developed. All comments and  information gathered by FCC constitute the public record to support  rulemakings and are electronically maintained in a docket. A docket may  address a number of issues, and, as a result, there may be several  rulemakings within one docket.
Seeking information about FCC’s efforts to maintain transparency and  opportunities for public participation, you asked us to review FCC’s  rulemaking process. Accordingly, this report (1) describes FCC’s  rulemaking process; (2) determines, for specific rulemakings, the extent to  which FCC followed its process; and (3) identifies factors that contributed  to some dockets and rulemakings remaining open.
To describe FCC’s rulemaking process, we reviewed FCC documents and  applicable laws and interviewed FCC officials and representatives from  industry and public interest organizations that have participated in FCC  rulemaking proceedings. These proceedings are known as “informal” or  “notice and comment” rulemakings. We also (1) gathered and analyzed  available data on FCC rulemaking orders published in the Federal Register  over the 5-year period from 2002 through 2006—we refer to these rules  throughout this report as “recent rules”—and (2) reviewed selected U.S.  Courts of Appeals opinions that addressed challenges to these orders. To  determine the extent to which FCC followed its process for specific rules,  we selected four of FCC’s rules published between 2002 and 2006 as case  studies. Each of these rules originated in a different bureau—Media,  Wireless Telecommunications, or Wireline Competition—or in FCC’s  Office of Engineering and Technology. These bureaus and office had the  most rulemakings during the period of our analysis. We also based our  selection of rules on why the rules were initiated, how long they took to  complete, and whether they were challenged in court. To help identify  factors that may contribute to dockets and rulemakings remaining open,  we selected four rulemakings for case studies from a list of ongoing  rulemakings that FCC publishes in the Federal Register every 6 months.  We selected these cases from the three bureaus and one office that  conducted the most rulemakings during the 5-year period from 2002  through 2006. We also selected these rules to include rules that were  initiated in different ways and had been open for different lengths of time.  For all case studies, we reviewed and analyzed the rulemaking records and  interviewed FCC officials and stakeholders involved in the rulemakings.  The findings in our case studies cannot be generalized to all FCC  rulemakings. We determined that these data were sufficiently reliable for  our review. We conducted our review from October 2006 through July  2007 in accordance with generally accepted government auditing  standards. A detailed discussion of our scope and methodology appears in  appendix I.
subsections: section_title: Background
subsections: section_title: Purpose and Organization of FCC
paragraphs: Established by the Communications Act, FCC is charged with regulating  interstate and international communications by radio, television, wire,  satellite, and cable. The Telecommunications Act, which substantially  revised the Communications Act, established that FCC should promote  competition and reduce regulation to secure lower prices and higher- quality services for American telecommunications consumers and should  encourage the rapid deployment of new telecommunications  technologies. The law grants FCC broad authority to execute its  functions. FCC implements its policy initiatives through a process known  as rulemaking, which is the agency process for implementing, interpreting,  or prescribing law or policy. Figure 1 shows some common  communications services affected by FCC rulemaking.
FCC is an independent regulatory agency that must follow many, but not  all, federal laws related to rulemaking. Under the Communications Act,  the commission is composed of five commissioners appointed by the  President with Senate confirmation. The President designates one of the  commissioners as chairman. The chairman derives authority from  provisions in the act and FCC’s rules, which define the chairman’s duties  to include (1) presiding at all meetings and sessions of the commission,   (2) representing the commission in all matters relating to legislation and  before other government offices, and (3) generally coordinating and  organizing the work of the commission. The commissioners delegate many  of FCC’s day-to-day responsibilities to the agency’s 7 bureaus and   10 offices (see fig. 2). While this report focuses on the rulemaking process,  FCC also makes decisions on many other issues, such as enforcement  actions and issuing licenses for communications devices. Between   2002 and 2006, FCC data show that the agency made 1,835 decisions by  FCC commissioners and 17,406 decisions within FCC bureaus and offices.
section_title: Laws Governing FCC Rulemaking
subsections: section_title: Administrative Procedure Act of 1946
paragraphs: APA is the principal law governing how agencies make rules. The law  prescribes uniform standards for rulemaking, requires agencies to inform  the public about their rules, and provides opportunities for public  participation in the rulemaking process. Most federal rules are  promulgated using the APA-established informal rulemaking process, also  known as “notice and comment” rulemaking. APA outlines a multistep  process to initiate and develop rules and includes provisions for parties to  challenge them, which FCC must follow. Many steps require agencies to  provide public notice of proposed or final actions as well as provide a  period for interested parties to comment on the notices—hence the  “notice and comment” label. APA does not generally address time frames  for informal rulemaking actions, limits on contacts between agency  officials and stakeholders, or requirements for “closing” dockets.
section_title: Communications Act of 1934
paragraphs: The Communications Act outlines procedures for addressing petitions for  reconsideration by FCC and appeals to federal court for FCC rules. The  act states that a petition for reconsideration may be filed within 30 days of  the date of public notice. The U.S. Courts of Appeals have jurisdiction to  review all final FCC rules.
section_title: Other Laws
paragraphs: Other laws and orders also apply to FCC rulemakings, including but not  limited to the following:    Regulatory Flexibility Act. This act requires federal agencies to assess  the impact of their forthcoming regulations on small businesses, small  governmental jurisdictions, and certain small not-for-profit organizations.  The act also requires rulemaking agencies to publish a “regulatory  flexibility agenda” in the Federal Register each October and April, listing  regulations that the agency expects to propose or promote and that are  likely to have a significant economic impact on a substantial number of  small entities. This requirement, as well as a similar requirement in  Executive Order 12866, is generally met with entries in the Unified  Agenda of Federal Regulatory and Deregulatory Actions. The Unified  Agenda is published twice a year in the Federal Register and provides  uniform reporting of data on regulatory activities under development  throughout the federal government.
Congressional Review Act. This act requires agencies to submit final  rules to Congress and GAO before they can take effect. We compile and  make available on our Web site basic information about the rules we  receive through an on-line database, including the rule’s priority, listed as  either “significant/substantive” or “routine/info/other” as indicated by the  agency’s submission. According to the GAO database, 240  significant/substantive FCC rules were published in the Federal Register  between January 2002 and December 2006.
The Government in the Sunshine Act of 1976 (Sunshine Act). This act  requires federal agencies headed by a collegial body composed of two or  more individual members, such as FCC, to hold regular public meetings  with sufficient public notice that the meeting will take place. The agency  must release the meeting’s agenda, known as the Sunshine Agenda, no  later than 1 week before the meeting. In addition, the act prohibits more  than two of the five FCC commissioners from deliberating with one  another to conduct agency business outside the context of the public  meeting.
E-Government Act of 2002. This act requires agencies, to the extent  practicable, to accept public comments on proposed rules by electronic  means and to ensure that a publicly accessible Web site contains  electronic dockets for their proposed rules.
Paperwork Reduction Act. This act seeks to minimize the paperwork  burden imposed by government on the public and requires an agency to  seek clearance from the Office of Management and Budget if it proposes to  collect information from 10 or more people on a particular matter. For  example, this requirement would apply to an agency’s proposed rule that  might seek information from the public.
section_title: Ex parte and Nonpublic Information Rules
paragraphs: APA places no restriction on “off-the record” or “ex parte” communication  between agency decision makers and other persons during informal  rulemaking. However, FCC has rules about such contacts to protect the  fairness of its proceedings by providing an assurance that FCC decisions  are not influenced by off-the-record communications between decision  makers and others. The rules also give FCC the flexibility to obtain the  information it needs for making decisions. Under its ex parte rules, FCC  generally classifies its rulemaking proceedings as “permit-but-disclose,”  meaning that outside parties are allowed to present information to FCC  either in writing or in person, but are required to disclose such  communications in the public record. The rules require a person making  an oral ex parte presentation that includes data or arguments not already  reflected in that person’s other filings to submit a disclosure to the record  summarizing the new data and arguments. The rules state that the  summary should generally be “more than a one or two sentence  description” and not just a listing of the subjects discussed. When there is  ambiguity about whether data or arguments are already in the public  record, FCC encourages parties to briefly summarize the matters  discussed at a meeting. FCC’s ex parte rules also establish the Sunshine  Period, which begins when FCC releases the Sunshine Agenda of items  scheduled for a vote at a public meeting and ends when those items are  released to the public after the vote or are removed from the agenda  before the meeting. During the Sunshine Period, the public may not  contact the agency to discuss any matters that appear on the Sunshine  Agenda unless there is a specific exemption. The Sunshine Period does  not apply to items that are voted on by circulation.
FCC rules state that staff must not directly or indirectly disclose nonpublic  information outside the agency without authorization by the chairman.  Nonpublic information includes the content of public meeting agenda  items, except for as required to comply with the Sunshine Act, and actions  or decisions made by the commission at closed meetings or by circulation  prior to the public release of such information.
section_title: FCC’s Rulemaking Process Includes Multiple Steps with Opportunities for Public Participation
paragraphs: FCC’s rulemaking process includes multiple steps as outlined by law with  opportunities for the public to participate during each step. FCC initiates  rulemaking in response to statutes, petitions for rulemaking, or its own  initiative. Any person may petition FCC to amend or create new rules.  After FCC releases an NPRM, it develops and analyzes the public record to  support a rule, leading to a final rule for the commission to adopt. Anyone  may participate in the development of the public record through electronic  filings and meetings with FCC officials. The FCC chairman has the  flexibility to decide what proposed and final rules the commission will  consider for adoption. At the chairman’s discretion, the commission may  adopt final rules either at a monthly public meeting or by circulating  written items to each commissioner. Stakeholders unsatisfied with an FCC  rule may file a petition for reconsideration with the commission or seek  federal judicial review.
subsections: section_title: Initiation
paragraphs: FCC initiates rulemaking in response to statutes, petitions for rulemaking,  or its own initiative. FCC may propose rules under its broad regulatory  authority granted by the Communications Act or in response to a specific  statutory requirement. Congress may also impose a time frame or  conditions for rulemaking. FCC may also propose rules in response to  petitions for rulemaking filed by outside parties. FCC puts petitions for  rulemaking out for public comment and, after reviewing any comments,  may initiate rulemaking on the issue or deny the petition. FCC does not  have to respond to a rulemaking petition within a set time frame, so a  petition for rulemaking can remain open indefinitely.
When initiating a new rulemaking, FCC has the flexibility to organize the  public record in the manner that it deems most appropriate. FCC may  establish a new docket to house the rule’s supporting documents or  initiate the proceeding in an existing docket, particularly if the filings  already in that docket would be germane to the new proceeding. As we  have previously discussed, there were 240 significant/substantive rules in  our database published in the Federal Register between 2002 and 2006.
Among these recent rules, 47 were initiated in response to a petition for  rulemaking, 172 were initiated on FCC’s own authority or in response to a  specific legal requirement, and 21 were initiated for a combination of these  reasons.
section_title: Rule Development
paragraphs: The commission’s release of an NPRM signals the beginning of a  rulemaking; the NPRM may or may not contain the text of the proposed  new or revised rules. The NPRM provides an opportunity for comment on  the proposal and indicates the length of the comment and reply comment  periods, which stakeholders can use to submit comments and reply to  other comments. These periods begin once the NPRM is published in the  Federal Register. The NPRM also indicates the ex parte rules for contact  under the rulemaking, which are generally “permit-but-disclose.” After  FCC releases an NPRM, it begins developing and analyzing the public  record to support a rule, leading to proposed final rules for the  commission’s adoption.
FCC provides multiple avenues for public participation during rule  development, including opportunities to submit filings electronically and  to meet with FCC officials. Outside parties provide FCC with written  comments, reply comments, and other types of data to support their  positions on a rulemaking. Outside parties are permitted to discuss  rulemakings with FCC officials, including commissioners, at any time  except during the Sunshine Period. FCC officials said they make every  effort to meet with any outside party that requests a meeting. For these  meetings, FCC rules require the outside party to submit an ex parte  disclosure for each meeting, indicating what new data or arguments were  presented during the meeting. This disclosure, like any other filing in the  docket, becomes part of the public record available electronically to the  public through FCC’s Electronic Comment Filing System (ECFS), a  searchable Web-based depository of rulemaking notices and filings. Each  document filed as part of the public record is associated with one or more  dockets. FCC provides guidance to the public on its Web site for how to  use ECFS and file comments.
FCC officials said that they do not usually conduct their own studies in  support of rulemaking issues. Instead, they rely mostly on external  stakeholders to submit this information into the public record, and FCC  staff analyze the information. In addition, stakeholders can critique each  other’s data that are in the public record. On more technical issues, FCC’s  Office of Engineering and Technology may conduct analyses for the public  record, and information FCC routinely collects, such as data on broadband  use, may be placed in a docket if it is relevant to a rulemaking. Also, while  FCC officials said that they do not typically identify and reach out to  parties to participate in rulemakings, they may contact a particular  stakeholder and request additional information for the public record or  use publicly available data, such as data from the U.S. Census, to augment  the public record. For example, officials from the Wireline Competition  Bureau told us they contact rulemaking participants if they need an  additional level of detail in the public record to adequately support a rule.  In some cases, FCC also holds field hearings, such as the current series of  hearings on media ownership, to solicit comment for the public record on  specific rulemaking issues.
Using information contained in the public record as support, bureau staff  draft proposed final rules for the commission to vote on. FCC officials  must consider all timely filed comments and reply comments when  developing a rule and have the flexibility to also consider information from  ex parte filings. FCC officials said that they consider all types of comments  filed in ECFS to support rulemakings; however, they said that specific  comments on contentious rulemaking issues are more helpful than general  comments that express support or opposition to a rule. FCC officials told  us that they may also consider comments from stakeholders with a vested  interest in an issue more seriously than those from other parties. FCC’s  Office of General Counsel and Office of Managing Director provide  rulemaking guidance to bureaus and review rules to determine whether  the bureaus followed the steps required by various rulemaking laws. FCC  uses an electronic system, known as the Electronic Management Tracking  System to track rulemakings and manage associated staff workload.
The chairman decides when the commission will vote on final rules and  whether the vote will occur during a public meeting or by circulation,  which involves electronically circulating written items to each of the  commissioners for approval. According to FCC officials, while it is not  possible to vote on every rulemaking at a public meeting, items that are  controversial or have a broad impact on the industry are more likely to be  voted on during a public meeting. Of the 240 recent rules, 101 were  adopted on the day the commission held a public meeting, indicating they  may have been voted on at the meeting, while the other 139 appear to have  been adopted by circulation.
Three weeks before the commission considers an item at a public meeting,  the chairman’s office releases to FCC officials the draft version of the  proposed rules the commission expects to vote on at the public meeting.  These drafts are internal, nonpublic documents. FCC officials told us they  do not release information to the public about what items the commission  is planning to vote on at public meetings or items being circulated by the  commission for adoption. FCC’s written rulemaking guidance states that  such information is nonpublic and may not be disclosed in any format,  including via paper, electronic, or oral means, unless the chairman  authorizes its disclosure.
For items to be voted on during a public meeting, the Office of Managing  Director releases the Sunshine Agenda no later than 1 week before the  meeting. The agenda includes a list of items the commission intends to  vote on at the meeting and notifies the public that it may not contact the  commission about those items during the week before the vote, the period  known as the Sunshine Period. Items voted on through circulation do not  usually appear on the Sunshine Agenda and, therefore, are not subject to  the contact prohibition. According to FCC officials, at the chairman’s  discretion, the commission could adopt items included on the Sunshine  Agenda by circulation in advance of the public meeting. No more than two  commissioners may meet to deliberate on rulemaking matters outside of  an official public meeting, according to a requirement of the Sunshine Act.  Some FCC commissioners have said that this requirement should be  changed because it creates logistical complications and transfers the daily  discussion of rules down from the commissioners to their staff. We did not  evaluate these claims.
Once the commission adopts a rule, the originating bureau often makes  technical corrections to it and may also make substantive changes. Each  commissioner is given the final rule before it is released and can decide if  the rule has undergone substantive changes. Any substantive changes are  approved by the commissioners, and the rule goes through a final internal  review before FCC releases the rule and submits it to the Federal Register  for publication. FCC may adopt and release some rules on the same day,  while other rules may require months of revision because the commission  may vote on a particular issue or policy position and not the precise  wording of the rule. When this occurs, the final wording of the rule is  approved by all commissioners before the order is released.
It is difficult to determine time frames for FCC rules because FCC tracks  which dockets are open, and many rules are in dockets that have been  open for a long time. These dockets may include other rules or may have  remaining issues to address. For example, one docket that has been open  since 1980 includes several NPRMs and rules. A recent rule in this docket,  issued in 2006, was attached to a Further Notice of Proposed Rulemaking,  and was published in the Federal Register as an “interim rule,” indicating  the issue is ongoing even though FCC has released several rules in the  docket. Documents that are both an NPRM and a rule can be difficult to  find in FCC’s database because the database allows a document to have  only one document-type label, even if the document serves multiple  purposes. As a result, if a document is filed as a rule and it also includes an  NPRM, when searching for NPRMs this document would not be found.
FCC may also develop rules on the basis of comments solicited from  notices other than a docket’s first NPRM. For example, a 2005 rule from a  docket that began in 1997 was supported by an analysis of comments  solicited in 2000 and 2003. FCC officials told us that some dockets— particularly those that address complex issues—contain multiple  rulemakings. Specifically, a docket may contain different NPRMs and rules  that are issued at different times. Therefore, a rule may be made in a  docket to address a long-standing issue, but relate specifically to an NPRM  that was not released until years after the docket was established.  Consequently, some rules could be considered to have shorter time frames  because they address issues primarily raised in subsequent NPRMs  released in the same docket. FCC officials told us that they do not track  the time it takes to complete a rulemaking and generally are not required  by statute to complete rules within certain time frames. The time it takes  to complete rules may vary because of the unique nature of each  rulemaking. Certain factors, such as the technical complexity of the issue  being address and the priority of the rulemaking in comparison to other  issues, can also affect rulemaking time frames. We also reviewed  rulemaking at the Environmental Protection Agency and Federal Trade  Commission, but we could not compare their time frames with FCC’s  because of differences in their rulemaking processes.
section_title: Reconsideration and Appeal
paragraphs: Stakeholders unsatisfied with an FCC rule may file a petition for  reconsideration with the commission or petition for federal judicial  review. Stakeholders are allowed 30 days after a rule is published in the  Federal Register to file a petition for reconsideration, although FCC  usually has no required time frame for acting on such a petition. FCC  officials said they give priority consideration to petitions identifying  problems with the rules they should correct quickly.
Parties may also petition the U.S. Courts of Appeals for review of an FCC  rule, typically after the commission has already considered the issue, such  as after FCC has denied a party’s reconsideration petition. An appeals  court may uphold, vacate (hold unlawful or set aside), or remand an FCC  rule (send it back to the agency for further consideration) entirely or in  part, which may lead the commission to take additional action on the  rulemaking, such as issuing a new version of the rule to address the court’s  concerns. Twenty-five of the 240 recent rules had published opinions from  the U.S. Courts of Appeals resulting from challenges. According to these  opinions, the court denied or dismissed the challenges to 19 rules, and 6  rules, either wholly or in part, were determined to be unlawful or sent  back to FCC for further consideration. In addition, according to FCC  data, challenges to 12 of the 240 recent rules were pending in the U.S.  Courts of Appeals as of June 2007.
section_title: FCC Generally Followed the Rulemaking Process for Selected Rules, but Unequal Access to Nonpublic Information May Give Some Stakeholders an Advantage
paragraphs: FCC generally followed the rulemaking process in the four case studies we  reviewed. Specifically, each rulemaking included an NPRM and a notice  and comment period. In reviewing the docket for each case study, we  found that most—but not all—ex parte filings complied with the ex parte  rules, and there was no evidence that FCC violated its Sunshine Period  rule. However, we found that multiple stakeholders—both those involved  in our case studies and other stakeholders who often file comments in  FCC rulemakings—often knew when proposed rules were scheduled for a  vote well before FCC released the agenda to the public and before the  Sunshine Period began. This advance information is not supposed to be  released outside of FCC. Other stakeholders with whom we spoke told us  that they cannot learn when rules are scheduled for a vote until the agenda  is publicly available. At that time, FCC rules prohibit stakeholders from  lobbying, or making presentations to, FCC. This unequal access to  information could create an unfair advantage for FCC stakeholders who  know when FCC is about to vote on a rulemaking and, therefore, would  know when it is most effective to present their arguments to FCC officials.
subsections: section_title: In the Rulemakings We Reviewed, FCC Generally Followed the Rulemaking Process
paragraphs: We reviewed four case studies of rules that were released from 2002  through 2006. Each of these rules originated in a different bureau—Media,  Wireless Telecommunications, or Wireline Competition—or in FCC’s  Office of Engineering and Technology. These bureaus and office had the  most rulemakings during the period of our analysis. Table 1 describes each  of our case studies.
Among our four case studies, three rules were initiated by FCC in  response to specific statutory requirements or on its own initiative, and  one rule—amateur radio service—was initiated in response to petitions for  rulemaking. Each of our case studies began with an NPRM, which, among  other things, included either the language of the proposed rule or a  description of the subjects and issues involved. The NPRM also described  the notice and comment period during which stakeholders could file  comments that FCC must consider. One NPRM—amateur radio service— included a specific proposal for the rule, while the other NPRMs included  only the subject of the rulemaking. For example, in the public safety  interference rulemaking, the NPRM discussed various methods to  minimize interference and asked for comments on these proposals. Some  stakeholders told us that it is much easier to comment on an NPRM that  includes a proposed rule. According to these stakeholders, it is easier to  comment on a specific proposal instead of trying to comment on an entire  subject or a range of proposals. However, there is no requirement that an  NPRM include a proposed rule.
One NPRM that we reviewed contained an error, but that error did not  appear to substantially affect the rulemaking. Specifically, the NPRM for  the rulemaking on cable boxes incorrectly stated that the rulemaking was  not bound by ex parte rules. FCC officials told us that this error occurred  because language was inadvertently carried over from an earlier drafting  of a notice of inquiry on cable boxes. FCC later decided to issue an NPRM  instead of a notice of inquiry, but accidentally left in the language that the  proceeding was not bound by ex parte rules. FCC officials told us that this  mistake had no bearing on the rulemaking because stakeholders submitted  ex parte filings anyway. Our review of the docket confirmed that  stakeholders submitted ex parte filings in this rulemaking.
In each case study, numerous stakeholders participated in rule  development, both during and after the comment period. Specifically, the  case studies had between 42 comments (for the cable boxes rule) and   273 comments (for the public safety interference rule) filed during the  comment period. In addition, FCC received between 8 (for the amateur  radio service rule) and 2,237 (for the Incumbent Local Exchange Carrier  (ILEC) unbundling rule) ex parte filings and comments in the docket after  the formal comment period ended. These filings and comments, which  were filed through FCC’s Web site, either reflect a meeting between FCC  officials and stakeholders or are written comments that stakeholders  submitted after the formal comment period had ended. The comments  range from lengthy studies to one-page, mass-produced e-mails. In  formulating a rule, FCC must consider all comments that are filed during  the comment period and may consider comments that are filed after the  comment period. Each filed comment is placed in a docket that is publicly  accessible through FCC’s Web site. Generally, FCC does not produce its  own studies to develop a rule. Rather, FCC relies on stakeholders to  submit information and analysis that is then placed in the docket so that  FCC and other stakeholders can critique the information. According to  FCC officials, this results in both transparency and quality information  because each stakeholder has had an opportunity to review and comment  on all of the information in the docket.
In addition to submitting comments, stakeholders often meet with FCC  staff to discuss issues. Stakeholders involved in our studies told us that  they were able to meet with FCC officials when they requested meetings.  Other stakeholders with whom we spoke who were not involved in these  case studies but regularly comment on FCC rulemakings also told us that  they were able to meet with FCC officials. A few of these stakeholders told  us that, while FCC officials were always willing to meet with them, they  were sometimes unsure if FCC officials were currently focused on the  rulemaking that was being discussed. FCC officials told us that they meet  with stakeholders who request a meeting, even if the stakeholders have no  new information to present.
We found that most of the hundreds of ex parte filings in the four case  studies appeared to meet the requirements, but several did not appear to  be sufficient. These filings, which publicly document when stakeholders  meet with FCC officials, generally detailed who attended the meeting or  what arguments were raised. However, in the cable boxes rulemaking, one  filing did not reveal which organization was represented at the meeting or  what was discussed. Another filing discussed new information that was  supported by a research report, but the report was not included with the  ex parte filing. If the information is not filed in the public record with the  ex parte filing, then it cannot be used to support a rulemaking. Therefore,  stakeholders have an incentive to file complete ex parte disclosures. We  also found some ex parte comments in three of the four case studies that  do not describe the discussion at the meeting, but refer to comments  already in the docket. While such filings may comply with ex parte rules,  the effect of this type of filing is mixed. Since the ex parte filing did not  explain those positions, it may not be very helpful to other stakeholders  because other stakeholders would have to go to the docket and look up  the party’s filed comments. Some stakeholders told us that there is nothing  wrong with these kinds of ex parte filings. According to these  stakeholders, they already know the other stakeholders and what their  arguments are. As a result, these stakeholders are not concerned about the  adequacy of ex parte filings. In contrast, a few stakeholders told us that  they do not have the time or the resources to monitor each docket and,  therefore, such ex parte filings are not helpful. FCC officials told us that,  generally, bureau staff both remind stakeholders to submit ex parte filings  and review them for accuracy. If a filing is not accurate or complete, the  staff member asks the stakeholder to resubmit the filing. Stakeholders  may file a complaint with FCC if they believe that other stakeholders have  not provided complete ex parte filings. However, according to FCC  officials, very few complaints have been filed.
We found that FCC followed its Sunshine Period rule that prohibits  unauthorized contact with FCC. In reviewing dockets and meeting with  stakeholders and FCC officials, we found no evidence of any prohibited  contact during the Sunshine Period. According to FCC officials and  numerous stakeholders, the rules are well known and stakeholders do not  generally request meetings or submit comments during this time. FCC  officials told us that, if stakeholders do try to contact FCC or submit  comments during the Sunshine Period, then FCC takes steps to ensure that  the comments are not seen by the FCC staff working on the rulemaking. In  the ILEC unbundling rulemaking, we found that several stakeholders  submitted comments to FCC during the Sunshine Period. We also found  that those comments were prominently marked in FCC’s ECFS as  comments that were submitted during the Sunshine Period and were not  to be viewed by FCC staff working on the rulemaking.
The ILEC unbundling case study took a number of months to be released  after the commission voted to approve it. The rule was adopted at a public  meeting in February 2003, but was not released until August 2003.  According to FCC officials, this delay was necessary because the final  order was approximately 800 pages and the actual wording of the order  was not voted on during the public meeting. Rather, the meeting included  votes on the policy positions and issues associated with the order but not  on the actual language. After the rule was adopted by the commission,  Wireline Competition Bureau staff worked with relevant offices to draft  the precise wording of the order, and then there were multiple  discussions, comments, and revisions as the order went through each  commissioner’s office and each substantive change was approved by the  commissioners.
The rules in our four case studies took between 1.0 and 4.5 years to  complete from the time the related NPRM was issued. Generally, however,  stakeholders told us that they are not concerned about the time it takes to  conduct a rulemaking. Stakeholders told us that, if they support a  rulemaking, they would like it to be completed more quickly. However,  these same stakeholders said they may oppose another rulemaking and  would like that rulemaking to proceed slowly or not be completed at all. In  contrast, another stakeholder told us that they always support quick  rulemakings because the businesses they represent prefer a stable  regulatory market, and ongoing rulemakings create uncertainty for some  businesses and their investors.
Three of the four rulemakings we reviewed were challenged in court. Both  the public safety interference and the cable boxes rules were upheld by  the U.S. Court of Appeals for the D.C. Circuit. In the ILEC unbundling  rulemaking, the D.C. Circuit vacated and remanded the rule in part, which  means that part of the rule was struck down, part of the rule was returned  to FCC for reconsideration, and part of the rule was upheld. In response  to the court’s ruling, in August 2004, FCC issued another rule and NPRM  soliciting comment on alternatives that would be consistent with the  court’s ruling, as well as a rule implementing a 12-month plan to stabilize  the telecommunications market while the new rules were being written.  Six months later, FCC issued a rule that the commission said was  consistent with the court’s guidance. This rule was also challenged and  upheld by the D.C. Circuit.
section_title: Multiple Stakeholders May Have an Advantage Because They Are Given Nonpublic Information
paragraphs: Several stakeholders told us that they learn which items FCC is about to  vote on even though that information is not supposed to be released  outside of FCC. FCC circulates information internally approximately 3  weeks before a public meeting to inform FCC staff of what is scheduled to  be voted on at the public meeting. FCC rules prohibit the disclosure of this  information to anyone outside of FCC. Specifically, the information is  considered nonpublic information and cannot be released by any FCC  employee without authorization from the FCC chairman. FCC officials in  the units responsible for the case study rules and FCC officials in the units  that conducted most of the rulemakings between 2002 and 2006 all told us  that this is nonpublic information, and that they do not release it outside  of FCC.
However, nine stakeholders—both those involved in the case studies we  reviewed and other stakeholders with whom we spoke who regularly  participate in FCC rulemakings—told us that they hear this information  from both FCC bureau staff and commissioner staff. One stakeholder— representing a large organization that is involved in numerous  rulemakings—told us that FCC staff call them and tell them what items are  scheduled for a vote.
In contrast, a number of other stakeholders told us that they do not learn  this information and do not know which items are scheduled for a vote.  These stakeholders, who generally represent consumer and public-interest  groups, told us that they do not know when FCC is about to vote on a  rulemaking or when it would be best to meet with FCC staff to make their  arguments. In contrast, stakeholders who know which items have been  scheduled for a vote know when to schedule a meeting with FCC  commissioners and staff because they know when FCC is about to vote on  a rulemaking.
FCC officials told us that, for stakeholders to successfully make their case  before FCC, “timing is everything.” Specifically, if a stakeholder knows  that a proposed rule has been scheduled for a vote and may be voted on in  3 weeks, that stakeholder can schedule a meeting with FCC officials  before the rule is voted on. In contrast, a stakeholder who does not know  that the rule is scheduled for a vote may not learn that the rule will be  voted on until the agenda is announced 1 week before the public meeting.  However, once the agenda has been announced, the Sunshine Period  begins, and no one can lobby FCC officials about the proposed rule. As a  result, the stakeholder who learns that a rule has been scheduled for a  vote 3 weeks before the vote can have a distinct advantage over a  stakeholder who learns about an upcoming vote through the public  agenda. Our case study reviews and discussions with multiple  stakeholders showed that some stakeholders know this nonpublic  information and, as a result, these stakeholders may have an advantage in  the rulemaking process.
Even though advance knowledge that a rule is scheduled for a vote is  nonpublic information, it has been reported by news agencies in the past.  Specifically, in the cable boxes rulemaking, an industry newspaper  published a story stating that the proposed rule would likely be circulated  among the commissioners for a vote within the next few weeks. The  newspaper attributed this information to unnamed “FCC sources.”
section_title: Several Factors May Contribute to Dockets and Rulemakings Remaining Open
paragraphs: The complexity and number of issues within a docket and the priority the  commission places on an issue may all factor into how long dockets, and  the rulemakings within these dockets, remain open. FCC tracks open  dockets, which may contain one or more rulemakings. The commission  determines which rulemakings are a priority and when to open and close a  docket; therefore, the commission determines how a rulemaking and a  docket progress. Specifically, a docket may remain open because it is  broad and is intended to include multiple rulemakings or because the  commission has not voted to close the docket even though the docket  includes completed rulemakings. Some rulemakings may remain open  because they involve complex, technical issues or because competing  priorities can force FCC officials to work on one rulemaking as opposed to  another.
As of December 2006, FCC had 133 open dockets on the Unified Agenda,  99 of which originated from three bureaus—Media, Wireless  Telecommunications, or Wireline Competition—and one office— Engineering and Technology. These four units had the most dockets  during the period of our analysis. These dockets remain open for a variety  of reasons. According to FCC officials, rulemakings may be completed  within a docket even if the docket remains open. As we have previously  discussed, one docket that has remained open since 1980 includes a  number of NPRMs and rulemakings that were issued.
We selected four open dockets as case studies, each of which originated in  a different FCC unit and had been open for a different length of time.  Table 2 provides an overview of these dockets.
According to FCC officials, there is no way to determine exactly why a  docket or a rulemaking remains open. While the chairman sets the FCC’s  agenda, the commission decides when to open and close dockets and  when action will be taken on specific rulemakings, so whether or not a  docket and rulemaking remain open is ultimately a commission decision.  However, certain factors may contribute to dockets and rulemakings  remaining open, including the following:    Broad dockets. Some dockets may remain open because FCC designed  them to be broad with multiple rulemakings. For example, FCC officials  involved in the Internet protocol services case study told us that this  docket was created to encompass a variety of issues related to this topic.  Specifically, the commission wanted to initiate a rulemaking that looked at  a number of issues related to Internet protocol services and anticipated  that the docket would be open for years and would include a broad NPRM  followed by a number of rules. FCC has already completed four rules  within this open docket, including rules related to 911 service and voice- over-Internet-protocol service.
Housekeeping. Some dockets may remain open even though the issue(s)  within the docket has been addressed by a rulemaking. For example, in  the airport terminal use case study, the docket remains open even though  the issue raised in the NPRM has been addressed with a rule. FCC officials  told us that the commission must vote to formally close a docket, and the  commission will generally wait until after stakeholders have had a chance  to file a petition for reconsideration or challenge the rulemaking in court.  As a result, dockets often remain open for a time after a rule has been  issued. FCC officials also told us that an open docket is a “housekeeping”  issue, and that there is no harm in having dockets remain open.  Stakeholders generally agreed that having dockets remain open is not an  issue.
Complex/Technical issues. Within open dockets, some rulemakings may  remain open for many years because they involve complex, technical  issues. For example, the satellite coordination case study involves the  technical properties of different types of satellites and involves worldwide  coordination and complex decisions about a satellite’s potential  interference with another satellite. FCC officials also told us that satellite  issues take a long time to resolve in part because of the nature of  satellites, which require a worldwide frequency, a number of different  applications, and millions of dollars. In the distributed transmission  systems (DTS) case study, FCC officials and stakeholders told us that the  issue involves complex new technology. Specifically, DTS technology  would allow broadcasters to place towers around urban areas to more  easily transmit digital programming. Within the rulemaking, stakeholders  have submitted items such as proposed geographic locations for siting the  towers to implement DTS, proposed criteria for determining if the towers  are interfering with other broadcasts, and procedures to allow for  potential additional transmitters without interference with adjacent  channels.
Competing priorities. Some rulemakings may remain open because other  rulemakings take precedence and the number of staff available to work on  rulemakings is limited. For example, FCC officials told us that they  worked on some rulemakings that are more important to the transition to  digital television instead of the DTS rulemaking because Congress has set  a deadline for the end of the digital television transition. FCC officials  decided to focus their staff resources on more important rulemakings,  especially since only a few companies have applied to use DTS since FCC  adopted the interim DTS policy. All of the stakeholders involved in the  DTS rulemaking with whom we spoke agreed with FCC officials and told  us that other issues related to digital television are more important than  establishing permanent DTS rules. FCC officials also told us that the issues  in the DTS case study are similar to other rulemakings on the transition to  digital television. Since the staff with expertise in digital television cannot  work on every rulemaking, FCC officials have to prioritize the rulemakings  on which they work. As a result, some rulemakings, such as DTS, remain  open.
Stakeholders generally told us that they are not concerned about the  number of open dockets. According to these stakeholders, an open docket  is not important; what matters is whether the rulemaking has been  addressed. However, as we have previously discussed, stakeholders also  told us that their views on the length of the rulemaking process could  change depending on whether or not they favor the proposed rule.  Specifically, supporters of an issue generally prefer a quick rulemaking,  while opponents are likely to favor a lengthy rulemaking process.
section_title: Conclusions
paragraphs: As a regulatory agency, FCC is routinely lobbied by stakeholders with a  vested interest in the issues FCC regulates. It is critical that FCC maintain  an environment in which all stakeholders have an equal opportunity to  participate in the rulemaking process and that the process is perceived as  fair and transparent. Situations where some, but not all, stakeholders  know what FCC is considering for an upcoming vote undermine the  fairness and transparency of the process and constitute a violation of  FCC’s rules. Since the success of lobbying for a particular issue can be  highly dependent on whether an issue is being actively considered, FCC  staff who disclose nonpublic information about when an issue will be  considered could be providing an advantage to some stakeholders,  allowing them to time their lobbying efforts to maximize their impact. As a  result, FCC may not hear from all sides of the issue during an important  part of the rulemaking process. This imbalance of information is not the  intended result of the Communications Act, and it runs contrary to the  principles of transparency and equal opportunity for participation  established by law and to FCC’s own rules that govern rulemaking.
section_title: Recommendation for Executive Action
paragraphs: To ensure a fair and transparent rulemaking process, we recommend that  the Chairman of the Federal Communications Commission:    Take steps to ensure equal access to information, particularly in regard to  the disclosure of information about proposed rules that are scheduled to  be considered by the commission, by developing and maintaining   (1) procedures to ensure that nonpublic information will not be disclosed  and (2) a series of actions that will occur if the information is disclosed,  such as referral to the Inspector General and providing the information to  all stakeholders.
section_title: Agency Comments
paragraphs: We provided FCC with a draft of this report for their review and comment.  FCC had no comment on the draft report and took no position on our  recommendation.
As we agreed with your office, unless you publicly announce the contents  of this report earlier, we plan no further distribution of it until 30 days  from the date of this letter. At that time, we will send copies to the  appropriate congressional committees and the Chairman of the Federal  Communications Commission. We will also make copies available to  others on request. In addition, the report will be available at no charge on  the GAO Web site at http://www.gao.gov.
If you or your staff have any questions, please contact me on   (202) 512-2834 or at goldsteinm@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. See appendix II for a list of major contributors to this  report.
section_title: Appendix I: Scope and Methodology
paragraphs: To describe the Federal Communications Commission’s (FCC) rulemaking  process, we reviewed agency documents available on FCC’s Web site that  describe its rulemaking process. We also reviewed FCC’s internal  rulemaking guidance documents and applicable laws, such as the  Administrative Procedure Act of 1946 (APA) and the Communications Act  of 1934. We interviewed FCC officials from the Offices of General Counsel,  Managing Director, and Engineering and Technology and the Wireline  Competition, Wireless Telecommunications, Media, and Public Safety and  Homeland Security Bureaus to determine how FCC generally conducts  rulemaking. Because we wanted to focus our review on FCC rulemaking  as it applies to regulating telecommunications and media in the United  States, we excluded rulemaking by FCC’s International Bureau from the  scope of this study. We also interviewed organizations that represent a  number of industries regulated by FCC as well as public-interest  organizations to determine how these organizations participate in FCC  rulemaking. Table 3 is a list of the organizations we interviewed and the  principal sectors they represent.
We also gathered and analyzed available data on FCC rulemaking orders  published in the Federal Register between 2002 and 2006. While each  rulemaking order may contain one or more rules, each order is generally  referred to as a rule. Therefore, throughout the report, we referred to each  rulemaking order as a rule. We used the GAO online rules database to  identify FCC rules published in the Federal Register between January 1,  2002, and December 31, 2006, and compiled a list of those rules contained  in the database as of February 1, 2007, which we refer to as “recent rules.”  We compiled only those rules FCC had identified as  “significant/substantive” and excluded rules labeled as  “routine/info./other.” We then used the Federal Register to identify each  rule’s FCC document number and the number of its associated docket.  With those numbers, we were able to use FCC’s Web-based document  databases—the Electronic Comment Filing System and the Electronic  Document Management System—to retrieve FCC rulemaking documents,  such as Notices of Proposed Rulemaking (NPRM), reports and orders  (R&O), and comments and ex parte filings from public participants.  NPRMs and R&Os include the dates they were adopted and released.  Using these sources, for each recent rule, we were generally able to  determine the rule’s docket; the originating bureau; the dates the rule was  adopted, released, and published in the Federal Register; and the dates the  first NPRM was released in the rule’s associated docket. Although some  dockets contain multiple NPRMs, we did not analyze each rule to attempt  to determine which specific NPRM(s) the rule was associated with, as it  was not always clearly stated in the rules and a content comparison  between each rule and each NPRM could not have been completed within  the time frame for this study. We analyzed these NPRMs to determine  generally why FCC initiated rulemaking.
We reviewed selected U.S. Courts of Appeals opinions that addressed  challenges to these rules. We identified appeals court opinions published  between January 1, 2002, and June 1, 2007, using legal research databases,  FCC’s Web site, and the Web site for the U.S. Court of Appeals for the D.C.  Circuit. Using citations in these cases, we identified which cases were  related to the “recent rules” we have previously identified. We then  gathered and analyzed the published opinions related to those recent rules  and identified the court’s decision in each case. We also obtained from  FCC a list of ongoing court challenges to their rules.
To determine the extent to which FCC followed its rulemaking process,  we selected for case study four rules that were completed between   2002 and 2006. Of the 240 rules FCC completed during that time, 190 rules  originated in the Media, Wireless Telecommunications, or Wireline  Competition Bureaus or in the Office of Engineering and Technology. We  selected one rule from each of these units. We also based our selection of  rules on why the rules were initiated, how long they took to complete, and  whether they were challenged in court. For each rule, we reviewed and  analyzed the rulemaking records and interviewed FCC officials and  stakeholders involved in the rulemakings. We used information from these  case studies to illustrate examples of FCC rulemaking; however, the  findings in our case studies cannot be generalized to all FCC rulemakings.  In addition to these case studies, we interviewed stakeholders who  represented different sectors of the telecommunications field, including  wireless providers, satellite providers, and public safety and consumer  groups. We also interviewed FCC officials in each of the four units to  obtain information on general experiences with the FCC rulemaking  process.
To identify the factors that contributed to dockets and rulemakings  remaining open, we reviewed FCC’s list of dockets in the December 2006  Federal Register’s Unified Agenda of Federal Regulatory and  Deregulatory Actions. The Unified Agenda is published every 6 months  and includes a list of dockets that FCC considers to be open. As of  December 2006, FCC had 133 open dockets, 99 of which originated from   3 bureaus—Media, Wireless Telecommunications, or Wireline  Competition—or FCC’s Office of Engineering and Technology. Of these   99 open dockets, 1 began in 2006—making it too recent to include in our  analysis. As a result, we analyzed 98 dockets. From those 98 dockets, we  selected 4 dockets for case study. We selected dockets that originated in  different FCC bureaus or offices, were initiated for different reasons, and  had been open for various lengths of time. Each docket may contain one  or more rulemakings, and we analyzed each docket and the rulemakings  within each docket. We reviewed and analyzed the rulemaking records and  interviewed FCC officials and stakeholders involved in the rulemakings to  determine why the dockets and rulemakings remained open. We used  information from these case studies to illustrate examples of FCC  rulemaking; however, the findings in our case studies cannot be  generalized to all FCC rulemakings.
We determined that the data used in this report were sufficiently reliable  for the purposes of our review. We conducted our review from October  2006 through July 2007 in accordance with generally accepted government  auditing standards.
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, individuals making key  contributions to this report include Tim Bober, Lauren Calhoun, Maria  Edelstein, Bess Eisenstadt, Edda Emmanuelli-Perez, Andrew Huddleston,  Sara Ann Moessbauer, Josh Ormond, John W. Shumann, Tristan T. To, and  Mindi Weisenbloom.