On Tuesday, March 27, 2012, the House is scheduled to consider H.R. 3309, the Federal Communications Commission Process Reform Act of 2012, subject to a rule. The bill was introduced on November 2, 2011, by Rep. Greg Walden (R-OR) and referred to the Committee on Energy and Commerce.

On March 6, 2012, the Committee held a mark-up on the bill and reported the legislation, as amended, by a vote of 31-16.  The rule for consideration of H.R. 3309 provides for one hour of general debate equally divided and controlled by the chair and ranking minority member of the Committee on Energy and Commerce. The rule also makes 10 amendments in order, each of which is summarized below.

H.R. 3309 would require the Federal Communications Commission (FCC) to be more transparent and methodical in determining whether to intervene in the communications marketplace, in dealing with consumers and regulated parties, and in reviewing transactions.  Specifically, the bill would require the FCC to do the following:

• Survey the marketplace through a notice of inquiry before proposing new rules that would increase costs for businesses and consumers;
• Conduct another notice of inquiry before proposing rules if three years have elapsed since the last inquiry, to make sure the FCC does not act on a stale record;
• Publish the specific text of proposed rules, so the public and industry know what is being considered and have adequate information to provide input;
• Allow the public and industry adequate time both to review proposed rules, ex parte filings and reports, as well as to provide comment;
• Identify a market failure or consumer harm and conduct a cost benefit analysis before adopting economically significant rules that cost more than $100 million;
• Create performance measures to evaluate the effectiveness of large programs that cost more than $100 million, such as the Universal Service Fund; and
• Set time limits and schedules for issuing decisions and to report to Congress on how well it is abiding by them, so the public and industry know when issues will be resolved.

According to the House Energy and Commerce Committee Report 112-414, the communications and technology sector is among the most competitive and innovative of our economy.  From fiber optics to 4G wireless service, from the smartphone to the tablet to the connected TV, this sector has been creating new services and new devices—and the high-quality jobs that come with high-tech innovation and investment—despite the economic doldrums our country is caught in.  In 2010, the industry invested $66 billion to deploy broadband infrastructure, $3 billion more than in 2009, totaling more than half a trillion dollars invested to upgrade their networks over the past eight years.  America is now the world leader in wireless LTE network deployment. To ensure it doesn't stall that economic engine, the FCC should not only strive to be the most open and transparent agency in the federal government, but should also engage in rigorous analyses demonstrating the need for regulation before intervening in the marketplace.

The communications industry is one of the few sectors still firing on all cylinders in this economy; the market is more competitive than it has ever been before, and the underlying technologies and business models are evolving at a rapid and accelerating pace. The FCC cannot know if intervention is appropriate unless it has rigorously examined the marketplace and afforded the public and affected parties adequate opportunity to review proposals and provide input. Consumers, small businesses, and outside-the-beltway stakeholders in particular do not have the regulatory lawyers needed for rushed review of proceedings; the only way to get their input is to give them time to provide feedback on well delineated proposals. Before it starts intervening, the FCC should make sure it has a full understanding of the state of competition and current technologies.

Based on information from the FCC, the Congressional Budget Office (CBO) estimates that the agency would require 20 additional staff positions to handle the new rulemaking, reporting, and analysis activities required under the bill.  CBO estimates that implementing the provisions of H.R. 3309 would cost $26 million over the 2013-2017 period, assuming appropriation of the necessary amounts, for additional personnel and information technology expenses.  Under current law, the FCC is authorized to collect fees sufficient to offset the cost of its regulatory activities each year; therefore, CBO estimates that the net cost to implement the provisions of H.R. 3309 would not be significant, assuming annual appropriation actions consistent with the agency's authorities.  Enacting H.R. 3309 would not affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply.

Amendment No. 1—Rep. Crowley (D-NY): The amendment would require that in the event that the FCC create or amend a rule relating to baby monitors, the FCC require that the packaging of an analog baby monitor display a warning label stating that sounds or images captured by the baby monitor may be easily viewed or heard by potential intruders outside a consumer’s home.

Amendment No. 2—Rep. Stearns (R-FL): The amendment would modify existing law so that each FCC Commissioner may hire an electrical engineer or computer scientist to provide in-depth technical consultation as well as interface with the Office of Engineering and Technology (OET) and other Commission technical staff to help inform their decisions.

Amendment No. 3—Rep. Waters (D-CA): The amendment would strike the portion of the bill that would diminish the FCC’s capacity to impose or accept voluntary public interest conditions or commitments from applicants to a media merger.

Amendment No. 4—Rep. Waters (D-CA): The amendment would prohibit FCC officials from accepting employment with a regulated entity within one year of the official’s vote and/or action in a proceeding in which the employer was a party or applicant.  The amendment would apply penalties to a Commissioner or employee who knowingly accepts an offer of employment in violation of this provision.  In addition, the amendment would establish procedures for a Commissioner or employee to request advice from an appropriate Commission ethics official regarding whether acceptance of a particular offer of employment would constitute a violation of the Act.

Amendment No. 5—Rep. Eshoo (D-CA): The amendment would require entities sponsoring political programming to disclose the identity of any donor that has contributed $10,000 or more to such entity in an election reporting cycle.  The amendment would require that a broadcast licensee, cable operator, or provider of direct broadcast satellite service not be held responsible for an inaccuracy in a certification filed under this subsection, unless such licensee, operator, or provider had actual knowledge, at the time such certification was filed, that such certification was false or fraudulent.

Amendment No. 6—Rep. Diaz-Balart (R-FL): The amendment would make the FCC's handling of FOIA requests more open and transparent, by publishing on the Commission’s website the Commission’s logs for tracking, responding to, and managing requests submitted, including the Commission’s fee estimates, fee categories, and fee request determinations.  In addition, the amendment would require the FCC present information about the Commission’s handling of requests in the Commission’s annual budget estimates submitted to Congress and the Commission’s annual performance and financial reports.

Amendment No. 7—Rep. Owens (D-NY): The amendment would express that nothing in the Act shall impede the FCC from implementing rules to ensure broadband access in rural areas.

Amendment No. 8—Rep. Green (D-TX): The amendment would clarify that the bill would not impede the FCC’s ability to provide in times of an emergency, for effective and efficient communication systems to alert the public of dangerous weather conditions.

Amendment No. 9—Rep. Speier (D-CA): The amendment would prevent the Act from taking effect until the FCC provides a report on the impact of the changes of the Act on the FCC's mandate to promote competition and innovation.

Amendment No. 10—Rep. Clarke (D-NY): The amendment would express that nothing in the Act can impede the FCC from providing efficient and effective communication systems for state and local first responders.