Formal Rulemakings, Informal Rule Breakings: Our Federal Government At Work on Our Behalf

The report describes interviews the GAO conducted with stakeholders who have regular contact with the FCC. The GAO looked at four case studies - four completed rulemakings. The interviewers met with the following stakeholders:

The interviews uncovered what can only be called the improper release of information by FCC staff just prior to Rulemakings. The key finding: Nine out of 12 stakeholders admitted to having access to agenda information in advance of the public release of such data.

However, 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.

As the report describes, there is an official release of the Meeting Agenda where the Rulemaking decision may or may not be on the agenda, just one week before the actual meeting. As this report describes, an FCC rule prohibits any lobbying of decision makers one week prior to a decision - the "Sunshine Period." And to their credit, no such rule breaking of the Sunshine Period was found in terms of meeting during that one week period prior to the rulemaking decision. But there was access just prior to that week.

No doubt, this FCC Rule is intended to prevent any interruption with a well-designed regulatory process, whereby the Commissioners can make their decisions based on the facts, the arguments, and the recommendations of staff. As soon as the Public finds out about the agenda, it's too late for an interested party to have any last minute access to a decision maker. But that's not the case for the insiders, who just find out sooner, by virtue of hanging around and listening, or by virtue of relationships they have on the inside. So then, they can get in their meetings before that one-week window begins.

As this report describes, in contrast to the Official Rules, there is the Unofficial Reality of how the process works. A few weeks before the Agenda is published, the draft agenda is circulated among staff so they can prepare for the meeting. So there, in practice, is an unofficial release of the agenda, for insiders only, through back channels. This special access to information gives these insiders valuable advance warning, during which time they can schedule high level visits in front of regulators to "lobby" for their point of view. I'm sure that the commissioners are generally surprised at the timing of such meetings (heavy irony here).

The gist of this article, for me, is that when staff play favorites with lobbyists with whom they share a social relationship, in this case, by releasing information selectively, they give their friends an undue advantage in the regulatory process. It's about a lot more than a friend helping another friend out, as I'm sure that is how it is understood inside the clubby culture of a regulatory agency. You can't help but become friends with people you work with on a regular basis, see at meetings, even go out to lunch with, even if there are separate checks at the end of the meal. And that is exactly the work of the lobbyist, to use their skills and influence to gain access, to both information and decision makers, and to position their ideas and arguments at the head of the line.

It really is hard to overstate the significance of this type of behavior, which undermines the entire process as its designed to work. It's what is meant by "insider" access. Sure, the lobbyists don't always get their way, and this release of information may seem like no big deal on the surface, but this informal practice gives the professional class an advantage, and that makes a big difference in results, over time. Their client's POV gets heard more often by regulators, consistently, and in this case, just before a decision is to be made, when timing is everything.

That's more than can be said for the poor outsider who follows the rules, writes a lengthy argument well in advance of the actual rulemaking decision, perhaps gets a visit with commissioners, also well in advance, but then is prevented from communicating immediately prior to a Rulemaking.

This report shows without any doubt that - It's a stacked deck. And that's the way of the world inside the Beltway.

If you don't want to read the entire report, here are the "money" paragraphs below.

However, nine stakeholders - both those involved in the case studies we reviewed and other stakeholders with whom we spoke who regularly participate in FCC rulemakings - told us that they hear this information from both FCC bureau staff and commissioner staff. One stakeholder - representing a large organization that is involved in numerous rulemakings - told us that FCC staff call them and tell them what items are scheduled for a vote.

FCC officials told us that, for stakeholders to successfully make their case before FCC, "timing is everything." Specifically, if a stakeholder knows that a proposed rule has been scheduled for a vote and may be voted on in 3 weeks, that stakeholder can schedule a meeting with FCC officials before the rule is voted on. In contrast, a stakeholder who does not know that the rule is scheduled for a vote may not learn that the rule will be voted on until the agenda is announced 1 week before the public meeting. However, once the agenda has been announced, the Sunshine Period begins, and no one can lobby FCC officials about the proposed rule. As a result, the stakeholder who learns that a rule has been scheduled for a vote 3 weeks before the vote can have a distinct advantage over a stakeholder who learns about an upcoming vote through the public agenda. Our case study reviews and discussions with multiple stakeholders showed that some stakeholders know this nonpublic information and, as a result, these stakeholders may have an advantage in the rulemaking process.

The report concludes with a recommendation that the rules be reinforced and followed, and No Comment from the FCC:

Recommendation for Executive Action

We provided FCC with a draft of this report for their review and comment. FCC had no comment on the draft report and took no position on our recommendation.

A final note from the report, in the background section: The FCC was established by the Congress in 1934 with the task of "regulating methods of electronic communication to foster a competitive environment, with an emphasis on the public interest."

73 years later, would you say the intent of Congress is being followed? Do we have a "competitive environment?" Do you feel that the "public interest" is emphasized?

While I continue to hope for improvement at the federal level, and will not let go of that hope, stories like this lead me to focus my efforts on the local and regional level. Sad to say, at this point I have no faith in my federal government to represent my interests as a U.S. citizen.

It is painful to write that down and see it in print.