House Telecom Subcommittee Holds FCC Reauthorization Hearing

(March 18, 1999) The House Telecommunications Subcommittee held a hearing on FCC reauthorization on Wednesday, March 17. The FCC was criticized by both Republicans and Democrats.

The House Commerce Committee's Subcommittee on Telecommunications, Trade, and Consumer Protection held this hearing as part of a process of reauthorizing the Federal Communications Commission. The FCC has been operating without statutory authorization since 1991.

Members of Congress have long been harshly criticizing the FCC for its handling of the 1996 Telecommunications Act. The Commission, and especially Chairman William Kennard, have largely ignored these complaints.

The Subcommittee structured the hearing to further emphasize dissatisfaction with the FCC. Rather that having the five commissioners testify first, as is customary, they were made to wait and listen to the testimony of Peter Huber, a Washington telecommunications lawyer best know for advocating the abolition of the FCC.

In addition, several members of the Committee used their opening statements to state what is wrong with the FCC.

The Chairman of the Subcommittee, Rep. Billy Tauzin (R-LA) ( web site | bio) stated that the FCC poses a threat to the Internet. He said:

"Based on this troubling track record, the FCC, in the future, may find the emerging Internet too tempting to resist. That's why it's vitally important for Congress to reform the agency from top to bottom before it morphs into the Federal Computer Commission. Simply put, any FCC regulation of the Internet could have a paralyzing effect on the American economy."

Rep. Tauzin also used to opening statement to call the FCC "out of touch" and a "horse and buggy agency." Rep. Tauzin blamed the absence of competition in some markets on the FCC.

"Today, nearly three years after we passed the landmark Telecommunications Act, there is still no effective competition in residential telephone markets across America. and we have failed to achieve full competition in the long distance loop. Why? Is the law flawed? Not at all. In my opinion, the problem is the way the law is being interpreted and enforced by the FCC."

Rep. Billy Tauzin

However, Rep. Tauzin was most critical on the e-rate. "Worst of all, the FCC effectively levied a $2 billion tax on telephone consumers to establish the so-called "E-rate" program for schools and libraries. The last time I looked, no where in the Constitution is the FCC, nor any other federal agency, given the power to levy, raise, or collect taxes. While the FCC may call these new charges "fees," they are, nonetheless, nothing more than taxes in disguise."

During questioning of FCC Chairman William Kennard, Rep.Tauzin suggested that the FCC is using merger reviews to "blackmail or greenmail" companies.

Rep. John Dingell (D-MI), the Ranking Minority Member of the Commerce Committee, lectured the five Commissioners with condescension. He said that the FCC "has thumbed its nose at Congress," and that it is "out of control." He singled out the FCC's failure to address universal service issues within the time schedule set out in the 1996 Act, its long delay in enforcing anti-slamming provisions of the Act, and its handling of long distance phone competition.

Rep. Dingell stated that "Today, many us are extremely frustrated at the manner in which the FCC has implemented the new law." He suggested that the FCC's interpretation of the 1996 Act constituted a "backdoor rewrite" of the statute.

"Holding the Commission accountable, and correcting its mistakes, may require that we re-write portions of the Act," said Rep. Dingell. "I see no reason to defer to Chairman Kennard on this point. We should do whatever is necessary to assure that the pro-competitive and deregulatory goals that we set are achieved."

Other members of the Subcommittee also used the occasion to criticize the FCC. Rep. Cliff Stearns (R-FL) accused the FCC of interpreting its statutory mandates contrary to the plain meaning of the statutes.

However, one of the harshest critics of the FCC, Rep. Chris Cox (R-CA), was not present. In the past Cox has accused the FCC of attempting to regulate the Internet. Rep. Cox is also Chairman of a special committee investigating transfer of satellite technology to China, and was occupied with that issue during this hearing.

The FCC did have its supporters on the Committee. Rep. Mike Oxley (R-OH) was generally complimentary in his opening statement. He cited the FCC's handling of CALEA issues: "I believe that your handling of disputes pertaining to CALEA have demonstrated great fairness and an appreciation of the needs of law enforcement." Rep. Oxley is a former FBI agent who supports the FBI's efforts to greatly expand wiretap surveillance of digital communications.

Rep. Heather Wilson (R-NM) said that she "has sympathy for the FCC." However, the strongest defense of the FCC came from Rep. Bobby Rush (D-IL). He praised the FCC for its implementation of low income universal service support, and for its handling of the e-rate. Rep. Rush represents an inner city district on the south side of Chicago.

The hearing lasted about four hours. Almost all of the members of the Subcommittee participated in all or part of the hearing. These included Representatives Roy Blunt (R-MO), Barbara Cubin (R-WY), Nathan Deal (R-GA), Robert Ehrlich (R-MD), Vito Fossella (R-NY), Paul Gilmor (R-OH), Steve Largent (R-OK), Mike Oxley (R-OH), Chip Pickering (R-MS), John Shimkus (R-IL), Cliff Stearns (R-FL), Billy Tauzin (R-LA), and Heather Wilson (R-NM). The participants also included Representatives John Dingell (D-MI), Elliot Engel (D-NY), Anna Eshoo (D-CA), Bart Gordon (D-TN), Gene Green (D-TX), Ed Markey (D-MA), William Luther (D-MN), Karen McCarthy (D-MO), Bobby Rush (D-IL), Thomas Sawyer (D-OH), and Al Wynn (D-MD).

Peter Huber Peter Huber is a lawyer and writer. He is the author of Law and Disorder in Cyberspace: Abolish the FCC and Let Common Law Rule the Telecosm. He has a doctorate in Mechanical Engineering from M.I.T., and served as a professor at M.I.T. for six years. He has a law degree from Harvard Law School. He clerked on the D.C. Circuit Court of Appeals for Judge Ruth Ginsburg, and then on the U.S. Supreme Court for Justice Sandra O'Connor. Huber is a Senior Fellow of the Manhattan Institute for Policy Research, Partner in the Washington, DC law firm of Kellogg, Huber, Hansen, Todd & Evans, and Chairman of Telecom Policy and Analysis: a Kellogg, Huber Consulting Group. The telecommunications counsel to the House Commerce Committee is Justin Lilley, who was previously an associate in Peter Huber's law firm. Lilley sat at Rep. Tauzin's right throughout the hearing.