GAO Finds FCC Gives Some Stakeholders Nonpublic Information

October 3, 2007. The Government Accountability Office (GAO) released a report [43 pages in PDF] titled "Telecommunications: FCC Should Take Steps to Ensure Equal Access to Rulemaking Information".

This report describes the Federal Communications Commission's (FCC) rule making process, and focuses on just one aspect of the the FCC's lack of transparency -- that "some stakeholders had access to nonpublic information that could give them an advantage in the rulemaking process".

The report states that the GAO interviewed stakeholders who participated in several rulemaking proceedings. It relates that "we also were told by 9 of 12 stakeholders -- both those involved with our case studies and stakeholders who regularly participated in FCC rulemakings -- that they knew when proposed rules were scheduled for an upcoming vote well before FCC released the agenda to the public because they hear this information from FCC bureau staff and commissioner staff. This advance information is not supposed to be disclosed outside of FCC."

It continues that "Once the agenda is public, FCC rules generally prohibit stakeholders from lobbying FCC. As a result, stakeholders with advance information about which rules are scheduled for a vote would know when it may be most effective to present their arguments to FCC, while stakeholders without access to this information may not."

The report also notes that not all ex parte filings comply with the FCC's ex parte rules.

The report was prepared for Rep. Ed Markey (D-MA), Chairman of the House Commerce Committee's (HCC) Subcommittee on Telecommunications and the Internet.

He issued a release that states that the GAO report shows that FCC information "is often leaked to corporate insiders long before it becomes public".

Rep. Markey wrote that "The FCC has a duty to be above-board in developing and implementing its rules. When the `corporate insiders´ and `K-Street´ crowd have the inside track on decisions critical to telecommunications, media, broadband or wireless policy, then the public and consumers, are at an inherent disadvantage. Both the law and the public interest, require that rulemaking decisions adhere to principles of openness and objectivity."

He continued that "The good news is that the FCC has rules against disclosing inside information before everyone knows it publicly. The bad news is that it appears violations of such rules are a daily reality at the FCC. I believe the FCC should take immediate steps to protect the integrity of its rulemaking process. The public deserves to know that these decisions are made on the up-and-up, with no unfair advantage to any one side in these important policy debate".

There are many other procedures employed by the FCC that are not covered by this report that also reduce the transparency of its proceedings.

For example, while the FCC publishes an agenda of its meetings one week before the scheduled time of the meeting, it rarely follows that agenda. It adds and deletes items without providing the required one week notice. Also, the FCC often does not hold its meeting at the scheduled time, and reschedules without one week notice.

The FCC rarely releases the text of its reports, orders, memoranda, notices at the time that it adopts them. Information about the contents of its adopted items is disseminated by means other that the public release of the items.

FCC officials involved in open rule making proceedings sometimes speak at events regarding those proceedings. These officials sometimes disclose information about those proceedings and/or receive oral comments from interested parties. The FCC does not apply its written comment or ex parte rules or the Administrative Procedure Act to these meetings on the basis that these are public events. However, not all such meetings are public. For example, reporters are sometimes excluded.