By Erwin G. Krasnow
There is no shortage of speculation by watchers of President Donald Trump predicting—with either delight or dismay—the media and telecommunications policies he will pursue.
Chairman Ajit Pai’s FCC has already taken several actions designed to overturn regulations and policies adopted during the time Tom Wheeler was chairman, including ending an investigation into the offering of “free data” by AT&T and Verizon, revoking the several Lifeline broadband provider designations, overturning restrictive guidelines on the processing of TV assignment and transfer applications that proposed intra-market sharing arrangements, and removing from consideration a rule that would have required cable systems to offer FCC-approved apps to subscribers to replace their provider-supplied set-top boxes.
At this moment, President’s Trump’s power and influence put in peril such key matters as net neutrality, the AT&T-Time Warner merger, media ownership rules, and the rapid deployment of wireless broadband service.
President Trump’s agenda for the FCC and other regulatory agencies is much more ambitious than overturning the policies adopted under President Obama’s watch. In a speech to conservative activists, Stephen Bannon, Chief Strategist for President Trump, said that at the very top of the president’s agenda is the “deconstruction of the administrative state” — meaning a system of taxes, regulations and trade pacts that the president and his advisers believe stymie economic growth and infringe upon the rights of individuals. He observed that “the administrative state is the FEC, the FTC, the FCC, FERC, SEC … all that alphabet.”
Steps are now being taken at the White House to deconstruct the administrative state by taking a sledgehammer to the federal bureaucracy. According to an article in TIME magazine, White House Counsel Don McGahn has assembled a team of elite lawyers with the stated goal of leading the Trump administration’s efforts to roll back regulatory powers across the federal government. McGahn, a former chair of the Federal Election Commission, said that he chose the members of his staff because of their expertise in working with federal departments and agencies: “They understand the regulatory agencies. Several are appellate lawyers who spent their careers fighting regulatory and government overreach, or worked on Capitol Hill conducting oversight.” The White House staff will no doubt consider the recommendation of Mark Jamison, a member of Trump’s FCC transition team who, in a blog titled “Do We Need the FCC?,” floated the idea of abolishing the Commission except for its most basic radio spectrum licensing function.
Against this dynamic and fluid background, it may be well to recall what Yogi Berra famously said: “It’s tough to make predictions, especially about the future.” There is no shortage of speculation and gossip about actions that are likely to be taken during the Trump administration. This article eschews speculation and instead focuses upon and catalogs the many potent tools in the president’s arsenal to shape the nation’s media and telecommunications policy.
THE POWER OF APPOINTMENT
One of the most formidable elements in the president’s toolkit is the power to designate an FCC Chairman. The FCC Chairman has enormous power to create the culture of the agency through the appointment of bureau and office heads.
The chairman is more than first among equals. The chairman’s role as the Commission’s “Chief Executive Officer,” its spokesperson, and the president’s choice as its leader gives the chairman instant credibility and substantial power. This power, both real and perceived, derives from the following functions that are unique to the chairman who:
• controls the schedule for considering proposals and initiating proceedings;
• schedules items for Commission consideration, enabling the chairman to delay and prevent consideration of items that lack the necessary two other votes (provided that no statutory deadline is involved);
• presides over all public Commission meetings;
• represents the Commission before Congress and to other government agencies;
• speaks for the Commission to the press and the public; and
• coordinates, organizes and prioritizes the Commission’s work and thus has both the advantage (and the burden) of directing the staff through the bureau and office chiefs in proposing resolutions to issues raised in rulemaking proceedings.
Although Pai is now chairman, his term as commissioner expired last June. The president has re-nominated Pai to serve a second term but he needs to be re-confirmed as commissioner by the Senate to serve past the end of this year. The Senate will be voting on confirming Pai as a commissioner for a five-year term ending in 2021. President Trump is free to remove and replace the chairman for any reason, returning him to the status of commissioner for the remainder of his term.
The president possesses the ability to nominate commissioners as resignations occur or terms expire. Although the Communications Act specifies that only three commissioners may have the same party affiliation, a president has wide latitude in appointing those he thinks will reflect his own political and administrative ideas. The current FCC composition is two Republicans and one Democrat. President Trump has two seats to fill – a third Republican and a non-Republican. When the term of Mignon Clyburn, the sole Democrat on the FCC, ends on June 30, the President will be able to nominate another commissioner or re-nominate Commissioner Clyburn for another five-year term.
The White House also possesses control over major personnel selections at the FCC, including the general counsel, the managing director and chief of the Media Bureau. As has been the case in prior administrations, Chairman Pai can be expected to check with the White House to secure a “political clearance” (for what are known inside the Beltway as “Plum Book” positions) before making senior staff appointments.
Aside from his own cabinet and staff, the president also can also nominate federal judges and Supreme Court justices, whose decisions are crucial to the development of regulatory policy. President Trump’s goal of rolling back agency regulatory powers may have a played a role in the selection of Supreme Court nominee Justice Neil Gorsuch, who has proposed abandoning the “Chevron doctrine” which provides that courts will defer to federal agencies when it comes to the interpretation of statutes or provisions under their control.
THE EXECUTIVE OFFICE OF THE PRESIDENT
The Executive Office of the President (EOP) consists of the immediate staff of the president and multiple levels of support staff that report to the president. EOP advises the president on what policies to pursue and propose and assists with the management of the federal bureaucracy. A key player in matters relating to communications policy is the Office of Management and Budget (OMB). The OMB reviews and revises all department and agency budget requests before they are presented to Congress. In addition, agencies such as the FCC must submit their legislative recommendations to OMB before asking for congressional consideration; further action depends on word from the OMB Director that a proposal is consistent with the president’s program. OMB may disapprove reporting forms and data collection by independent agencies. OMB also has the power to authorize agencies to add “super grade” (high-salaried) staff positions. OMB was responsible for federal telecommunications procurement and management becoming, in the process, a major factor in the development of telecommunications technology. In addition, OMB is charged with settling interagency disputes regarding government frequency allocations, although the NTIA has been given the “first shot” at government spectrum allocations and, in practice, few if any disputes reach OMB.
The Office of Information and Regulatory Affairs (OIRA) has become the center for White House analysis of regulatory policy. OIRA, which has been described as the “single most important office most people have never heard of,” reviews proposed agency regulations and has responsibility for conducting a cost-benefit analysis of proposed rules. In addition, the Paperwork Reduction Act provides OMB with authority to approve — or, most importantly, disapprove — forms used by regulatory agencies.
The White House Office of Science and Technology Policy (OSTP) has had a significant impact on the development of tech and telecom policy. OSTP also serves as the home of the President’s Council of Advisers on Science and Technology (PCAST). Its members are appointed by the president and are usually very accomplished business types and academics. Google’s CEO, Eric Schmidt, served under President Obama, as did several Nobel Prize winners. While they are independent from the White House, their recommendations carry a lot of weight. Under President Obama, the PCAST issued a major report on spectrum policy that ended up being reflected in a Presidential Memorandum.
The National Economic Council (NEC), which serves the president by considering the economic impact of all proposed policies, has played an important role in past administrations. At NEC, Grace Koh has been named Special Assistant to the President for Technology, Telecom, and Cyber-Security Policy. The appointment of Koh, formerly counsel to the Subcommittee on Communications & Technology of the House Energy & Commerce Committee, suggests that NEC will be playing a significant role in tech and telecom policy.
The President’s Office of Domestic Policy Council is responsible for providing advice on telecommunications and information policy, especially on national security. The primary responsibilities of the domestic policy staff with respect to communications matters are: (1) to keep the president advised on the small number of communications issues that merit his attention, (2) to participate in the appointments process and (3) to work with the National Telecommunications and Information Administration (NTIA) and other federal departments and agencies to coordinate the administration’s position on communications matters.
LINE AGENCIES
In addition to influence on broadcast regulation through the FCC and other regulatory agencies and through White House staff, President Trump has the ability to shape policy through line agencies housed in departments that are headed by members of the president’s cabinet. The most significant cabinet departments for communications policy are the Departments of Commerce, Justice, Defense and State. Speaking at the recent Conservative Political Action Conference, Steve Bannon remarked that if you look at President Trump’s cabinet nominees, “they were selected for a reason, and it is the deconstruction. The way the progressive left runs is that if they can’t get it passed, they’re just going to put in some sort of regulation in an agency. That’s all going to be deconstructed and I think that’s why this regulatory thing is so important. ”
Within the Department of Commerce, the National Telecommunications and Information Administration (NTIA) serves as the president’s main policy advice arm on domestic and international telecommunications policy, as well as the coordinator for the nation’s governmental spectrum use. Unlike the FCC, which is an independent administrative agency, NTIA is an executive branch agency that derives its authority from the president. It is led by the Assistant Secretary for Communications and Information who acts as the voice of the President at the FCC and in Congress on communications and information policy issues. In the management of federal (and effectively state) governmental use of the radio spectrum, NTIA is expected to play a decisive role in the next major evolution of the wireless industry toward 5G networks and machine-to-machine communication. NTIA is also the source of more spectrum for the FCC to auction, should the federal government decide to relinquish or transfer usage rights to the commercial sector or state use.
The Department of Justice (DOJ) is the president’s legal arm. As the agency generally responsible for enforcement of federal laws and with specific responsibility for deciding which FCC cases should be pursued in court, the Justice Department exerts a strong influence. The Solicitor General’s Office in DOJ has authority to decide which cases the federal government should ask the Supreme Court to review and what position the government should take. The Justice Department’s Antitrust Division has taken an active role in FCC proceedings. The Telecommunications and Media Enforcement section of the Antitrust Division is responsible for civil antitrust enforcement, competition advocacy, and competition policy in the areas of the internet, video programming distribution, mobile wireless voice and data services, satellite communications and voice telephony. Both the DOJ and the Federal Trade Commission review mergers under the antitrust laws to determine whether they will substantially lessen competition.
Other cabinet-level offices also influence telecommunications policy. The Department of Defense is a major user of spectrum and is involved actively both in managing much of the government’s spectrum and in affecting that part of the spectrum shared with private users.
The Department of State plays a role in international communications issues, including holding conferences, negotiating treaties, and becoming involved in day-to-day communications disputes with neighboring nations — especially, in recent years, Canada and Cuba. The State Department’s Office of International Communications and Information Policy (OICIP) is responsible for the formulation, coordination, and oversight of policy related to information and communication technology.
EXECUTIVE ORDERS AND PRESIDENTIAL MEMORANDA
Presidents have used Executive Orders to establish policy, to reorganize executive branch agencies, to affect how legislation is interpreted and implemented, and to alter regulatory processes. The most famous Executive Order was by President Abraham Lincoln, when he issued the Emancipation Proclamation. Another type of presidential directive is a Presidential Memorandum. Executive Orders are perceived as more meaningful than Presidential Memoranda, but the Department of Justice has issued an opinion saying they are of equal force. President Obama directed spectrum policy through two Presidential Memoranda, and President Trump could do likewise. Importantly, Executive Orders per se are not appealable in federal court, though their underpinnings, if in violation of the constitution nor other existing law, are appealable indirectly. Orders technically are the president speaking to the federal agencies under his direct control. As in the case for directing agencies that they must use cost-benefit analysis in their rulemakings and submit these to OMB for review, the independent FCC is not required to follow Executive Orders.
President Trump has used Executive Orders to underscore his campaign promises to “drain the swamp” and to clear out the regulatory underbrush to get the economy going. He has issued an Executive Order, titled “Reducing Regulation and Controlling Regulatory Costs,” requiring agencies to rescind at least two existing regulations for every new rule. Although the FCC, as an independent regulatory agency, is not covered by the Executive Order, its message resonates with Chairman Pai. Then-Commissioner Pai, anticipating Republican control of the FCC, vowed to “take a weed whacker” to costly and unnecessary FCC regulation that hinders “investment, innovation, and job creation,” although technically his agency is not required to obey direct orders of any sort from the sitting President. President Trump arguably has the power to issue an Executive Order to expand the scope of OIRA regulatory review to encourage independent agencies such as the FCC, SEC, and other independent agencies to follow his directives.
THE BULLY PULPIT
The greatest power to influence the nation’s policy agenda may come from the intense media coverage of the president who is able to set the mood for the agenda of the FCC and for regulation in general. Especially at the beginning of an administration, the White House has been able to create a political climate favorable to or hostile against regulation. President Kennedy’s “New Frontier” theme, for example, created fertile ground for the more active regulatory role by Chairman Newton Minow. Similarly, President Ford’s leadership role on general regulatory reform backed up then-FCC Chairman Richard Wiley’s “deregulation” program, conducted White House summit conferences and supported legislation urging regulatory agencies to eliminate rules and paperwork requirements considered burdensome to business.
Starting with the Clinton Administration, presidents have used social media to maximize their ability to impact the policies of regulatory agencies. President Barack Obama used the website WhiteHouse.gov as a platform for issuing a written statement and an accompanying video to pressure the FCC to create a new set of rules protecting network neutrality, forcing FCC Chairman Wheeler to abruptly alter his previous position. He encouraged members of the public to share this message using social media tools. He also used social media platforms like Facebook, Twitter, Snapshot, and Instagram.
President Trump’s unprecedented use of Twitter has dramatically changed the way that he communicates with the public. He has referred to himself as “the Ernest Hemingway of a hundred and forty characters” and likely will be known as the Twitter President, giving new meaning to the phrase “bully pulpit.”
President Trump has placed relieving regulatory burdens on businesses high on his list of priorities and is working with OMB to “develop a plan to make the federal government work better, reorganizing, consolidating, and eliminating where necessary.” Further evidence of his intention to overhaul the federal bureaucracy is the appointment today of his son-in-law, Jared Kushner, to head a newly created Office of American Innovation that will be responsible for streamlining and overhauling the federal government.
Bottom line: President Trump has at his disposal the vast resources of the executive branch and the extensive array of powers in his toolbox to transform the FCC as well as nation’s media and telecommunications policy. We will need to wait to find out how aggressive — and how successful — he will be.
Erwin G. Krasnow, co-chair of the Communications Group of Garvey Schubert Barer, is a former General Counsel of the NAB and serves as Washington, D.C. counsel to the Media Financial Management Association. He is the co-author of The Politics of Broadcast Regulation (St. Martin’s Press) and can be reached at [email protected]
