COMMLAW MANAGING PARTNER OFFERS THOUGHTS ON HIGHLY POLITICIZED FCC DECISION EXTENDING LIFELINE TO BROADBAND

Law360, Washington (April 2, 2016, 12:08 AM ET) — The eleventh-hour collapse at the Federal Communications Commission of a bipartisan compromise on expanding the Lifeline subsidy program was a clear illustration of the same political tensions that are prevailing nationally, and experts expect the infighting will lead to little compromise during the remainder of Chairman Tom Wheeler’s leadership.

At an FCC meeting Thursday that was already delayed several hours, Republican commissioners staged a public showdown over the chairman’s leadership, accusing him of bullying Lifeline reform champion and Democratic Commissioner Mignon Clyburn into reneging on a compromise deal. The FCC instead broke 3-2 along party lines to pass a plan that closely matched details released in early March.

The expanded phone subsidy program for low-income households will now include broadband access as well, but with a $2.25 billion “soft cap” instead of the hard $2 billion budget cap or other concessions requested by Republican commissioners.

Several telecom attorneys said Friday that the last-minute wrangling showed that existing conflict is now boiling over, likely ensuring that votes remain partisan as Wheeler transitions into what could be his last year as chairman.

“I think to a point, Wheeler’s not interested in too much of a compromise,” said Anthony K. Veach of Bennet & Bennet PLLC. “He’s interested in finishing his job to an extent or tying up the loose ends on some of these big issues. … Now he’s just got to make sure the incentive auction goes well and he can coast into the sunset.”

Republican Commissioner Ajit Pai made a similar statement after Thursday’s meeting, blasting what he claimed to be a behind-the-scenes effort against compromise that had been finalized in a series of “process fouls.”

“It’s pretty clear at this point that 3-2 is the norm,” he said. “If it shuts out the minority and makes our orders less politically appealing to Capitol Hill or less able to withstand judicial scrutiny, this agency doesn’t care. So I don’t know what you do with that.”

Jonathan S. Marashlian of Marashlian & Donahue PLLC, who represents mainly wireless clients including Lifeline providers, said Wheeler seems to have, in the words of President Barack Obama, a “rhymes with bucket” list of remaining policy goals.

“I don’t have much expectation that there’s much room for compromise during the final nine, 10 months of the administration,” he said.

Issues the commission has worked on for years — from inmate call charges to Lifeline and net neutrality — have finally come to a vote, Marashlian said, and the attitude of the majority seems to be to push through decisions.

“It really is a situation where, instead of compromising at the administrative level, I think that there’s an expectation by this majority commission that anything they do is going to get appealed, and so they’ll just do what they want to do, set the bar where they want to set it, and let the courts decide if something is going to get peeled back,” he said. “Why compromise at the administrative level knowing that a compromise is still likely to be appealed?”

The Republican commissioners at Thursday’s meeting claimed Wheeler called in lawmakers to fight back on the Lifeline compromise and pressure Clyburn into abandoning that plan, a notion he called “balderdash.” However, Clyburn’s office filed a notice, posted publicly Friday, that said a range of lawmakers and their staff, including from the House Energy and Commerce Committee and Sen. Cory Booker, D-N.J., were in touch Thursday.

Democratic Missouri Sen. Claire McCaskill’s office advocated reaching a compromise, according to the notice, while the offices of House Minority Leader Nancy Pelosi and Rep. Anna Eshoo, D-Calif., “inquired about the status … but did not advocate a position,” the filing said. Eshoo and other members also fired off a letter to the commissioners Thursday opposing the budget cap.

Marashlian said that although the FCC is an independent agency, it has been criticized for folding to pressure from the Obama White House on net neutrality while also having to hear from a Congress that’s been vocal on telecommunications issues.

“Even independent agencies are no longer immune to the heavily partisan politics of today,” he said. “It’s certainly one of the most highly politicized times in my life. We’re seeing it play out in just about every major action that government takes.”

Danielle Frappier, co-chair of the communications practice at Davis Wright Tremaine LLP and leader of the firm’s Lifeline program team, said she doesn’t think it’s problematic for the FCC to listen to members of Congress who represent constituents with relevant concerns, but the idea of an independent agency may have meant more when people stayed on the commission for longer periods of time.

“I think what happened [Thursday] was particularly bad, but not unique to Lifeline,” she said. “It did seem to reach new heights [Thursday] though, and it just seems to me that it could make cooperation among the offices more difficult.”

Frappier said she prefers the FCC’s final decision on Lifeline to the details released on the collapsed compromise but also has her own complaints about the rulemaking process and so understands the Republicans’ outcry.

In her view, she said, the biggest process issue on Lifeline was the release of a fact sheet with key details of the proposal only weeks before the vote and without a new notice and comment period. The arrangement allowed only insiders who “know how to play the game” to weigh in, she said.

“Process reform could help, but I think generally the culture of politics in our country is moving toward the more extreme end of things and this is part of that, on both sides,” she said.

Although Republicans — and some experts — advocate reforming the FCC’s rulemaking process, Marashlian likewise said that would not address the underlying issue of a “breakdown of respect” for both the office of commissioner and nature of the FCC as an independent body. More process regulation could add unnecessary hurdles to agency rulemaking and wouldn’t restore decorum, he said.

“You didn’t need these things in place 10 to 15 years ago because back then the five commissioners had split votes, but there was a great deal more collaboration among the offices and much more listening to one another,” he said.

For now, Marashlian said, the best bet for resolving political tension in the agency may be to wait for a broader political shift.

“Honestly, the answer is, when the heated politics on the national scene cool off, the heated politics within agencies like the FCC will do likewise,” he said.