Given the increasingly competitive communications marketplace and ongoing technological dynamism facilitating development of new service offerings and consumer devices, the use of rebuttable evidentiary presumptions favoring forbearance and repeal or modification of obsolete regulations would constitute an important regulatory reform. Specifically, the FCC should adopt a presumption in forbearance proceedings that, absent clear and convincing evidence to the contrary, enforcement "is not necessary to ensure that a telecommunications carrier's charges or practices are not unreasonable or unreasonably discriminatory or necessary for the protection of consumers, and non-enforcement is consistent with the public interest." It should also adopt a presumption in the regulatory review process that, absent clear and convincing evidence to the contrary, "regulation is no longer necessary in the public interest as the result of meaningful competition" between service providers.
I first proposed the use of such presumptions in a
Perspectives from FSF Scholars
, which called for adding the language quoted above to Sections 10 and 11 of the Communications Act. Representative Bob Latta (R-OH) introduced legislation that would have implemented these statutory amendments, but the legislation has not been enacted. Subsequently, in January 2017, I, along with Free State Foundation Senior Fellow Seth Cooper, renewed the call for the use of rebuttable evidentiary presumptions in separate
, one relating to
and one to
. But this time we called for the FCC to adopt the presumptions by rulemaking.
Now, the Free State Foundation reform idea has received support within the agency. In an
at an FSF event in June 2018, Commissioner Michael O'Rielly endorsed the idea:
"In light of the vibrant competition in the various sectors of the communications marketplace, not only should the Commission review all proceedings with a deregulatory eye, but it should also use available tools, such as forbearance and mandatory reviews, to eliminate unnecessary regulation….This presumption could only be overcome by clear and convincing evidence to the contrary. In context, he was arguing that deregulatory presumptions should be added by Congress to sections 10 and 11 of the Communications Act, but there is no reason why the Commission, on its own accord, could not use such an approach when considering forbearance petitions or reviewing rules."
And Commissioner O'Rielly included the idea in his recently released
listing proposed reforms the Commission should consider: "No. 20. Implement a deregulatory presumption when reviewing and implementing rules and forbearance requests.”
The primary purpose of this paper is to show once again, now with a further discussion demonstrating legal authority, that it is within the FCC's power to adopt these presumptions through the use of the agency's rulemaking authority. The presumptions would not conflict with anything in the Communications Act – an important factor that agencies have emphasized when adopting similar presumptions. Indeed, the deregulatory congressional intent is further evidenced by the fact that, under Section 10, if the FCC fails to act on a petition to forbear from regulation in a timely fashion, the forbearance petition is deemed granted, not denied. In other words, the default position is deregulatory. And the presumptions are consistent with the historical precedent of similar presumptions being created and employed by the FCC and other agencies.
The FCC can also show the requisite connection between the presumed lack of need for enforcement and regulation and the competitiveness of the telecommunications market. Congress expressly recognized the increasing competitiveness of this market when it enacted the 1996 amendments. Since that time, it is beyond dispute that competition has only grown with, among other things, Voice over Internet Protocol (VoIP) and wireless services becoming increasingly common alternatives to traditional legacy telephone services. Not to mention other communications alternatives such as WhatsApp, Snapchat, Facebook's Messenger, and Skype, which very often are substitutable by consumers for traditional telecom services.
I stress that the presumptions would not be outcome determinative. The statutory criteria for forbearance or repeal or modification of regulations would remain unchanged. The presumptions would also be rebuttable, not absolute. Moreover, even if the presumption were not overcome in specific instances, the FCC would retain the discretion to determine the scope of forbearance and whether to repeal or modify regulations, as well as the nature of any modification to its regulations.
* Randolph J. May is President of the Free State Foundation, an independent
nonpartisan free market-oriented think tank located in Rockville, Maryland. He acknowledges, and is grateful for, the substantial assistance of Kate M. Manuel, an Adjunct Senior Fellow at the Free State Foundation, in the preparation of this paper.
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