This is the seventh in a series of seven posts about regulatory compliance priorities and enforcement trends. The first post was about the Commodity Futures Trading Commission (CFTC). The second post was about the Federal Trade Commission (FTC). The third post was about the Securities & Exchange Commission (SEC). The fourth post was about the Food & Drug Administration (FDA). The fifth post was about the U.S. Department of Agriculture (USDA). Last week’s post was about the Environmental Protection Agency (EPA). Finally, today’s post, the final one, will be about the Federal Communications Commission (FCC).
The U.S. Federal Communications Commission (FCC) is the US regulator charged with supervising interstate communications via the mediums of radio, television, wire, satellite, and cable. The FCC was created by the Communications Act of 1934 to replace the Federal Radio commission, a predecessor regulator with jurisdiction over radio only, and incorporate the telecommunications regulation responsibilities of the Interstate Commerce Commission, in recognition of the advancement of communication and broadcasting technologies.
The modern FCC has six main operating objectives: providing affordable access to broadband internet; maintaining a competitive framework for communications services providers; ensuring the efficiency and efficacy of spectrum (radio); setting media regulations which encourage digitalisation, competition, and diversity; cooperating with public safety and homeland security crisis communications; and contributing to ongoing modernization of the FCC itself as innovation evolves. Within these objectives, the FCC sets media policy pertaining to broadcast, cable, and satellite television and broadcast radio regarding content, indecency, ownership, and transition to digital. Interstate telecommunications services including landed telephone, internet, mobile services, and a variety of other radio and broadcasting networks and databases are also within the FCC’s purview.
Certainly the biggest story in recent years involving the FCC has been the changes to the Obama-era Net Neutrality rule. For a basic but thorough explanation of Net Neutrality, recent changes to its regulatory handling, and the various interests at stake, check out this QuickTake from Bloomberg.
- Cooperation with the FTC: In the aftermath of the rollback of net neutrality protections ensured by the FCC in its December 2017 vote, much of the regulatory attention has been on assurances that the FTC will step into the gap to pick up on vital enforcement efforts. The two agencies have agreed to a memorandum of understanding on their collaboration with each other, much of which appears to be based on pre-Net Neutrality classifications which established shared jurisdictions for the FCC and the FTC. The details of this plan, however, both in its depth and its ultimate application, remain to be seen: FCC and FTC outline how they’ll cooperate after net neutrality vote
- Legal engagement with states: Facing regulatory rollback at the federal level and judging legislative action to be unlikely, some states have started to consider creating their own legal frameworks in absence of a higher supervisory authority providing oversight. California is one state which has been vocal about wanting to fill the regulatory gap created by federal rollbacks by creating state systems to establish accountability, and the topic of Net Neutrality is a hot-button one for states to get involved. Because the FCC’s order bars states from making their own overt rules about Net Neutrality, lawmakers will need to get creative about using their resources and existing regulatory authority to capture broadband internet service providers (ISPs) in their jurisdiction to force constructive compliance: In the Wake of the FCC’s Net Neutrality Repeal, California Eyes Its Own Net Neutrality Law
- …And cities: California is far from the only state spurred into action by the Net Neutrality change, as over 20 states have mounted various challenges to the decision and/or efforts of their own to require ISPs doing business in their states to observe Net Neutrality. Cities are engaged also, with New York City officials considering the ways the city can enforce the principles of Net Neutrality on its own: States and Cities Keep the Battle for Net Neutrality Alive
- Corporate political engagement: Changes in regulatory position and public policy on topics of great consumer interest are practical candidates on which corporations can engage and take political position. The Net Neutrality repeal was not only controversial but provoked a wide range of emotional and intellectual reactions from the public. So, it’s an interesting and compelling corporate social responsibility (CSR) tactic for many companies to engage politically about Net Neutrality and thereby enhance their relevance to and credibility with current and prospective customers. Burger King got a lot of attention for doing so not only boldly but informatively: Why is Burger King better at explaining net neutrality than the FCC?
Post-Net Neutrality rule-making, the FCC will likely seek a new alignment on a broad variety of issues impacting its wide mandate. As demonstrated by the diverse range of priority topics below, the FCC will have a full regulatory agenda for 2018, and rehabilitation of its public image and its processes through which it engages with consumers, lawmakers, and stakeholders, will be a top priority for the agency. As discussed in this article, the challenges are inherent in rebounding from 2017 and setting a fresh set of priorities for 2018.
- Complaints and investigations
- Merger reviews
- On a related note, the impact of major anti-trust concessions on the broadcasting market
- Role in rural broadband expansion
- Wireless alert system reform
As this series on regulatory enforcement and compliance interests has shown, whatever the current rhetoric on the proper reach of supervision may be, these agencies will always have a huge impact on life and business. Whether this is through regulatory expansion, delay and inaction, or rollback, the choices made on regulatory agendas have sweeping influence on topics as diverse as investor protection, public health and safety, the environment, consumer rights, and all areas of the securities and financial markets.