III. Components of the Regulatory Process
In addition to the Communications Act, the FCC conducts its business pursuant to the Administrative Procedure Act and the Government in the Sunshine Act. Both of these laws apply to federal agencies involved in policymaking. These statutes ensure a high degree of fairness and transparency in the government decisionmaking process.
The Administrative Procedure Act governs the manner in which an agency makes its decisions, requiring public notice of proposed rules and opportunities for any interested member of the public to comment. When the FCC wishes to develop or change a policy, it adopts a Notice of Proposed Rulemaking (NPRM) describing the proposed changes. The NPRM is publicly available, placed on the FCC website, and is summarized in the Federal Register. A deadline is specified for comments and reply comments. (The reply comment period enables commenters to critique the initial presentations of other commenters). FCC proceedings frequently attract participation from opposing commercial interests, so the agency normally has informed critiques of industry positions. Public interest groups also participate in these proceedings. All comments and reply comments are made a part of the public record of the proceeding. In very limited circumstances, the FCC permits parties to its proceedings to submit confidential material. Interested parties may visit FCC commissioners and staff to express views in a proceeding, but they must file an "ex parte" letter in the public record of the proceeding, detailing whom they visited and what they discussed. This creates transparency in the decision-making process so that all interested parties can monitor issues raised in a proceeding.
The FCC and other federal agencies are required to make decisions public and to explain the rationale for their decisions. These decisions are subject to judicial review and can be reversed on various grounds, for example if they are found to be "arbitrary and capricious." FCC decisions are rendered in the form of a Report and Order (R&O). The R&O explains the FCC decision and its rationale. NPRMs and R&Os are generally adopted at open meetings of the Commission.
After the FCC has released an R&O, interested parties who disagree with the decision have 30 days to file a petition for reconsideration, asking the FCC to reconsider all or part of its decision. The FCC seeks comment on such petitions and then renders its decision. The FCC can grant reconsideration petitions in whole or in part, thus modifying the original decision, or deny them. A party still not satisfied with an FCC decision may appeal to the U.S. court system.
Pursuant to the Government in the Sunshine Act, meetings among a quorum of the Commissioners must be open and public. Many FCC decisions are made at open meetings. As noted above, however, some decisions are voted on separately by each Commissioner; these decisions are said to be made "on circulation." In addition, the Commission has delegated some decisionmaking authority to bureaus and offices within the agency.
FCC decisions create a body of precedent, and this provides a substantial degree of predictability when it comes to repeated application of the same statutory provision, rule, or policy. When novel issues are involved, however, there is a lesser degree of predictability.
In addition to NPRMs and R&Os discussed above, there are a variety of other types of documents that the FCC may adopt. If the FCC is interested in a particular issue but has not formulated a specific rule change proposal, the agency may adopt a Notice of Inquiry (NOI). An NOI simply asks for comments and information about some topic or topics. The comments submitted in response to an NOI may lead the FCC to propose a specific rule change in an NPRM. Alternatively, an NOI may be used to gather information for a report, perhaps to Congress, either at the FCC's own initiative or in response to Congressional direction.
The FCC may also act in response to a request from an interested member of the public. Members of the public that wish the FCC to change its rules or develop new ones may file a "Petition for Rulemaking" requesting that action. The FCC generally puts such petitions out for comment and reply comment before deciding whether to issue an NPRM. A member of the public may also file a "Petition for Declaratory Ruling" with the FCC. This is a request that the FCC clarify the scope or application of an existing rule. In response, the FCC may issue a Declaratory Ruling intended to provide greater certainty to the public.
The FCC is responsible for licensing a variety of communications providers. In the wireline context, the Commission approval process for interstate and international telecommunications carriers is very limited, and is intended to promote competition in these markets. (States license providers of local telephony services). The FCC has provided a blanket grant of authority for domestic interstate carriers that are classified as non-dominant, so no application is necessary. Carriers that provide international services generally receive a presumption in favor of entry and are subject to a 14-day streamlined approval process.
The FCC also licenses satellite systems. It grants licenses for both space stations and earth stations. Satellite licensing raises unique issues involving spectrum and orbital resources, technical interference and coordination.
The FCC also issues licenses to provide terrestrial wireless (i.e., non-satellite based) telecommunications services. These are generally divided into Commercial Mobile Radio Services (CMRS), such as cellular, paging, Personal Communications Services (PCS) and Specialized Mobile Radio (SMR); and Private Mobile Radio Services (PMRS), private systems used for a variety of purposes including for personal convenience, to promote safety of life and property, to increase commercial productivity, and to advance the science of telecommunications. In addition, the Commission processes requests for antenna tower registrations.
As discussed below in the Spectrum Management chapter (VII), the terrestrial wireless licensing process flows from previous decisions by the FCC as to which services may be provided in which spectrum bands. The FCC has come to rely increasingly on competitive bidding or auctioning to assign licenses. In the past, the FCC relied mainly on comparative hearings, in which the qualifications of competing applicants were examined, to award licenses. Comparative hearings, however, proved tremendously time-consuming and resource-intensive. Competitive bidding is an effective way to ensure that licenses are assigned quickly to the entity that values them most, while recovering the value of spectrum for the public. Furthermore, from a regulatory standpoint, auctions promote transparent decisionmaking by providing a clear basis upon which a license applicant can determine why and how it did or did not obtain a license.
It is important to note, however, that auctions may not be appropriate in all circumstances. For example, when only one party has applied, auctions are not necessary because the license can easily be assigned without consideration of any competing alternatives. In addition, fundamental public policy goals (for example, public safety and national defense) might not be well served by using a competitive bidding mechanism. There may also be cases in which the most efficient and effective use of spectrum is achieved not by granting exclusive licenses to winning bidders, but rather through the shared use of the spectrum, either on a licensed basis -- as is the case with most private services in the United States - - or on an unlicensed basis. In such cases, spectrum fees or other reimbursement methods may be considered to ensure that the public is adequately compensated for use of the resource.
The FCC also licenses both radio and television broadcasting stations, including all U.S. AM and FM radio broadcasting stations and all VHF and UHF television broadcasting stations, which includes the new digital television stations. Broadcasting stations are licensed either as commercial for-profit stations (which means that they are allowed to include commercial advertising messages) or as non-commercial educational stations (which means that they are not allowed to include commercial advertising messages). Radio and television stations are licensed for an 8-year period, and these licenses are nearly always renewed. In the future when the FCC receives competing applications for a commercial radio or television station to serve the same location using the same frequency, we will use a license auction to select the winning licensee.
The FCC also licenses providers of direct-to-home video satellite services using high- powered geostationary satellites. With regard to cable television service, providers are licensed by municipalities, although the FCC processes applications for cable television relay service (CARS), a microwave-based service that relays signals for local distribution, inter-city relay and remote TV pickup.
Pursuant to the Communications Act, the FCC is charged with adjudicating complaints against common carriers for the violation of either the Act or the Commission's rules. The FCC receives, processes, and assists in the resolution of tens of thousands of consumer complaints each year. The FCC also adjudicates formal complaints filed against common carriers. These complaints frequently involve disputes between competing carriers or disagreements between carriers and their customers over the terms and conditions of service. The FCC may also take independent (self-initiated) enforcement action. Enforcement actions may result in assessing forfeitures, issuing cease and desist orders, or revoking operating authority for carrier conduct that violates either the Communications Act or the Commission's rules.
THE ORGANIZATION OF THE FCC
The FCC has six operating bureaus, and ten offices that provide support services.
The six operating bureaus reflect broad divisions of FCC responsibility. These are the Cable Services, Common Carrier, Compliance and Information, International, Mass Media, and Wireless Telecommunications Bureaus.
Cable Services Bureau (CSB)
The Cable Services Bureau has responsibility for issues related to the cable television industry and other multi-channel video programming providers. It is also responsible for regulations concerning "must carry," retransmission consent, customer services, technical standards, home wiring, consumer electronics, equipment compatibility, indecency, leased access and program access provisions.
Common Carrier Bureau (CCB)
The Common Carrier Bureau has responsibility for policies concerning telephone companies that provide telecommunications services to the public through the use of wire- based transmission facilities. These companies, called common carriers, provide voice, data, and other transmission services.
Compliance and Information Bureau (CIB)
The Compliance and Information Bureau, through its headquarters staff and various field offices, informs the public about FCC regulations, policies, practices, and procedures; ensures compliance with FCC rules; and uses its technical expertise to solve problems in the communications environment.
International Bureau (IB)
The International Bureau promotes innovative, efficient, reasonably priced, widely available, reliable, timely and high quality international and global communications services. IB develops, recommends and administers policies and programs for the authorization and regulation of international telecommunications facilities and services, and the licensing of domestic and international satellite systems. IB advises and makes recommendations to the Commission, or acts for the Commission under delegated authority, on the development and administration of international telecommunications policies and programs. Additionally, IB develops FCC proposals to World Radiocommunication Conferences (WRCs) and other multilateral and international conferences, meetings and assemblies.
Mass Media Bureau (MMB)
The Mass Media Bureau advises the Commission on policy pertaining to broadcasting - television and radio - as well as Multipoint Distribution Service (MDS) and Instructional Television Fixed Service (ITFS). The Bureau issues licenses, performs policy and rulemaking functions, and administers the enforcement program for all mass media services.
Wireless Telecommunications Bureau (WTB)
The Wireless Telecommunications Bureau oversees the use of radio spectrum to fulfill the communications needs of businesses, local and state governments, public safety service providers, aircraft and ship operators, and individuals. In addition to licensing commercial providers of wireless services, WTB monitors the more than two and a half million licensees that use private radio for personal convenience, to promote safety of life and property, to increase commercial productivity, and to advance the science of telecommunications.
The FCC has ten operating offices that are responsible for administrative, outreach, and various technical functions of the agency.
Office of Administrative Law Judges
Administrative Law Judges preside over hearings and issue Initial Decisions. The full Commission reviews these decisions.
Office of Communications Business Opportunities (OCBO)
The Office of Communications Business Opportunities is responsible for providing advice to the Commission on issues and policies concerning opportunities for ownership and contracting by small, minority and woman-owned communications businesses. The office also advises the Commission on policies to foster equal employment opportunity in the communications industry for minorities, women, and people with disabilities. The office works with entrepreneurs, industry and public interest organizations and individuals to provide information about policies to promote ownership and employment opportunities in the communications industry.
Office of Engineering and Technology (OET)
The Office of Engineering and Technology is responsible for managing the non- government use of the spectrum. OET makes recommendations to the Commission on how the radio spectrum should be allocated and establishes technical standards.
Office of the General Counsel (OGC)
The General Counsel serves as the chief legal advisor to the Commission and its various bureaus and offices. The General Counsel also represents the Commission before the federal courts of appeals; recommends decisions in adjudicatory matters before the Commission; assists the Commission in its decision-making capacity; performs a variety of legal functions regarding internal administrative matters; and advises the Commission on fostering competition and promoting deregulation in a competitive environment.
Office of the Inspector General (OIG)
The Office of the Inspector General was created by the Inspector General Amendments Act of l988. The Inspector General conducts and supervises audits and investigations relating to the programs and operations of the agency. The Inspector General recommends policies for activities designed to promote economy, efficiency and effectiveness, as well as to prevent and detect fraud and abuse in agency programs. The Inspector General also provides a means for keeping the Chairman, Commissioners and Congress fully informed about problems and deficiencies at the agency. Incidents of waste, fraud, abuse or mismanagement within the agency are reported to the OIG, in writing or utilizing a toll-free hotline.
Office of Legislative and Intergovernmental Affairs (OLIA)
The Office of Legislative and Intergovernmental Affairs serves as the Commission's principal point of contact with Congress and with other governmental entities.
Office of the Managing Director (OMD)
Under the supervision and direction of the Chairman, the Managing Director serves as the FCC's chief operating and executive official. The Managing Director provides managerial leadership to, and exercises supervision and direction over, the FCC's bureaus and staff offices in management and administrative matters; formulates and administers all management and administrative policy programs and directives for the Commission; assists the Chairman in carrying out administrative responsibilities; advises the Chairman, Commissioners and management on administrative and related matters; administers the FCC's management systems; and directs agency efforts in improving management effectiveness, operational efficiency and employee productivity.
Office of Plans and Policy (OPP)
The Office of Plans and Policy serves as the principal economic and technical policy advisor to the Commission, analyzing agenda items and developing long-term policy. The office also produces working papers on major policy issues.
Office of Public Affairs (OPA)
The Office of Public Affairs is responsible for informing the press and public of the FCC's actions, facilitating public participation in the FCC's decision-making processes, and operating many of the FCC's public reference rooms and library. OPA issues daily news releases, public notices and other informational material; prepares the Annual Report and other publications; and handles telephone, written, and walk-in requests for information. OPA maintains the FCC's Internet homepage.
Office of Workplace Diversity (OWD)
This office serves as the principal advisor to the Chairman and Commission on all aspects of workforce diversity, affirmative recruitment, equal employment opportunity and civil rights within the Commission. The office develops, coordinates, evaluates, and recommends to the Commission internal policies, practices, and programs designed to foster a diverse workforce and to promote equal opportunity for all employees and applicants for employment.
Each year, Congress appropriates operating funds to the FCC. For Fiscal Year 1999 (October 1, 1998 to September 30, 1999), the FCC was appropriated $192,000,000. Section 9 of the Communications Act provides the authority for the Commission to assess and collect regulatory fees to recover the costs associated with enforcement activities, policy and rulemaking activities, user information activities, and international activities. The amount of regulatory fees to be collected and applied as an offset to the FCC appropriation in any fiscal year is determined by Congress.
In addition to the funding provided by the direct appropriation and regulatory fees, the Commission has authority under the Communications Act to recover the costs associated with conducting Spectrum Auctions.
Finally, Section 8 of the Act provides that the Commission shall assess and collect application fees. The receipts collected under Section 8 are deposited directly into the U.S. Treasury and are not available to offset operating costs of the Commission.
USEFUL INTERNET LINKS
The FCC web site, www.fcc.gov, has links to the various FCC operating bureaus and offices. Each bureau/office site provides information about recent activities.
Administrative Procedure Act, 5 U.S.C. 551, www.uscode.house.gov Government in the Sunshine Act, 5 U.S.C. 552b, www.uscode.house.gov