Misplaced Regulatory Moves, Up Close

Like manna from heaven, every time you write about some grand plan from government, fate sends an example of how harebrained bureaucracy can be in practice. And so today we have an example of missing the point on deregulation, which some bureaucrat at the Federal Communications Commission clearly did.

According to an item on the Broadcast Law blog, last week the FCC denied a San Francisco TV station’s request that the DISH satellite network carry its signal to customers in the Bay Area. That unto itself is not news. TV stations have spats with carriers all the time, and the FCC exists to referee these disputes.  

The telling detail for compliance professionals is why the FCC denied the station’s request. A small glimpse it may be, yet it speaks volumes to what the Trump Administration’s deregulation chatter is really about.

First, the regulations in question. Under Section 338 of the Communications Act, if a satellite carrier like DISH provides one local TV station to a geographic market, other local stations can petition that satellite carrier to carry their signals, too. It’s known as the “carry one, carry all” rule.

Last September, public television station KMTP asked DISH to do exactly that. DISH declined, saying KMTP violated FCC rules for how to petition a satellite carrier. And DISH was correct: under FCC rules —  Section 76.66(d)(1)(ii), to be precise — petitions must be sent to the satellite carrier by certified mail, return receipt requested. KMTP sent its petition by Priority Mail Express.

KMTP then appealed to the FCC. After all, the station said, its petition did arrive by the appointed deadline and was complete. The only mistake had been in how KMTP sent the petition.

Alas, no love from the FCC. In its decision, filed Jan. 23, the FCC was clear:

Section 76.66(d)(1)(ii) provides one specific mailing method for carriage elections: certified mail, return receipt requested. The provision does not indicate that this is a suggested method, or a preferred method, and we therefore need not decide whether priority express mail is an equivalent or better service, as KMTP suggests. Because KMTP failed to send its carriage election by the method required under our rules, we must deny its complaint.

Was the FCC correct in its decision? On technical grounds, yes. Nevermind that when Section 76.66 was adopted in 2002, Priority Mail Express didn’t exist. Or that the Postal Service itself promotes Priority Mail Express as the best choice “for important business documents, like contracts and sales orders.” Or that Priority Mail Express includes proof of delivery signature, which serves the same purpose as return receipt requested.

The rule is the rule, after all. And the Broadcast Law blog says on this matter, “Sometimes a rule means just what it says.”

Enter Regulatory Reform

In the real world, you can’t help but ponder this preposterous rationale for stiffing KMTP in light of the Trump Administration’s supposed focus on deregulation. Just last week the administration’s regulatory czar, Neomi Rao, gave a speech recapping 2017. She touted the President Trump’s supposed 2-for-1 kill order on new regulations, which in reality has more emergency exits than an airport. She promised even fewer new regulations in 2018, and talked vaguely about bringing independent agencies (such as the FCC) under her office’s purview.

Of course we should repeal unproductive or outdated regulations when we find them, and create new regulations only at minimum level necessary. But the goal isn’t less regulation unto itself, as Trump and Rao seem to believe. The goal is smarter regulation, that allows the most economic opportunity and imposes the least burden, in as few words as possible.

So for all Rao’s talk about last year delaying or withdrawing 1,500 pending new rules, perhaps her time would be better focused on re-examining existing rules to let them create more opportunity without losing sight of the rule’s broader goal. And then perhaps the FCC would have amended Section 76.66(d)(1)(ii) rather than enforce it to the daffy extreme we see above.

It’s also telling that yesterday the FCC voted to create a new Office of Economics and Analytics, as part of its quest to deregulate. On the surface that might seem like a good idea, and used properly, it would be. But as FCC commissioner Mignon Clyburn said:

[O]ne might conclude that the Commission is laser-focused on integrating neutral economic analysis into the work of this agency. But what the current Administration is actually doing, is putting in place a mechanism to justify its own interests, while disregarding any analysis that runs counter to their views.

One would expect an Obama Administration holdover to say something like that. But the Trump Administration, including FCC chairman Ajit Pai, doesn’t do much disprove those suspicions. After all, the FCC’s newfound love of economic analysis comes after the most important decision it made in years: to end net neutrality.

Emerson once said, “A foolish consistency is the hobgoblin of little minds.” That seems very much on display in the FCC’s decision last week. Let’s hope it doesn’t take further root in the Trump Administration’s jihad against regulation.

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