Change in House Control Seen Likely to Slow Pai Agenda, Mean More Oversight

Democratic FCC Chairman Tom Wheeler faced more oversight after Republicans regained control of Congress four years ago. Four years before that, Democratic Chairman Julius Genachowski faced a new battery of questions after Republicans gained a majority in the House, though the Senate remained under the Democrats (see 1011040114). Republican Kevin Martin spent much of his last two years as chairman dealing with a House Commerce Committee investigation after Democrats won control of the House in 2006 (see 0611090132).

Pai could face the same kind of pushback Martin saw, said Andrew Schwartzman, Georgetown Law Institute for Public Representation senior counselor. “The FCC's docket is of greater significance” now, he said. “Pai is a bigger target today than Martin was. In this polarized environment, the oversight likely will be much more aggressive.”

Former Chairman Reed Hundt said the election is an opportunity for Pai to emerge as “post-partisan” chairman: “He can pass on partisan politics and push for historic policy accomplishments. The reason is he now can triangulate across three points of the Republican Senate, the Democratic House and the industry.” Pai can push for a net neutrality compromise in legislation, he said. “He can create a complete satellite to terrestrial transition deal … have a transition plan for all satellite spectrum to be used terrestrially,” Hundt said. Pai can “stop monopoly pricing” in rural markets, he said. “He can give the phone network back to the people, clean it up, end robocalls, attack spam, use software solutions.”

Hundt, chairman when Republicans swept to control in 1994, said this election was almost as dramatic because of the underlying popular vote, which Democrats won by more than an estimated 8.5 percent: “A massive popular rejection of Trump.”

Pai and the House

Pai "congratulates all who were elected yesterday and looks forward to working with the new Congress," a spokesperson said.

The relationship between Pai and the House "can be relatively smooth or it can be very contentious,” said former Democratic Commissioner Mignon Clyburn. The House members who signed the Congressional Review Act resolution of disapproval on the Pai FCC’s net neutrality rollback were all re-elected if they ran, she said. Other House Democrats are “very much pro-net neutrality, very much pro-consumer privacy and they don’t think it should be decoupled or minimized at the FCC,” Clyburn said.

Pai will be subject to oversight hearings from multiple committees, “just like Wheeler was, and yes, that will take up a lot of his time,” said Gigi Sohn, a former aide to Wheeler. Pai has partly “course corrected, focusing more on spectrum and robocalls than some of the more ideological issues he tackled early on,” she said. “There are still a few outstanding issues that, depending on how he proceeds, could bring him a great deal of heat.” Sohn mentioned Lifeline, T-Mobile buying Sprint (see 1811070048), the USTelecom unbundled network element forbearance petition, a broadband mapping proceeding “and whatever happens next to Sinclair” (see 1811070056).

Similar changes didn’t slow past chairmen, said former GOP Commissioner Robert McDowell, now at Cooley. “The governing philosophy of this commission won’t change as the result of the House flipping,” he said. “The FCC still has the same three Republican commissioners who are remarkably aligned when it comes to their respective regulatory outlooks. While staff time will be somewhat more consumed by answering congressional inquiries and preparing commissioners for an increased number of oversight hearings, the FCC’s direction will not change and its brisk pace will likely not diminish.”

New Overseers

House Commerce Committee ranking member Frank Pallone, D-N.J., and House Communications Subcommittee ranking member Mike Doyle, D-Pa., pledged in a Wednesday statement to conduct firm oversight of the FCC if they become the committee and subcommittee chairmen. That is expected (see 1810190034).

It’s “important that [House Commerce] get back to conducting real oversight of the FCC, and that means regular oversight hearings with all commissioners,” Pallone said.

The incoming Democratic House majority likely will push for a “marked increase in oversight across all agencies,” but the split with a GOP-majority Senate is likely to mean “you’re not going to be seeing legislative fixes for problems” identified via that oversight, said Project on Government Oversight Director-Congressional Oversight Initiative Justin Rood. But House Commerce is “one of the premiere oversight committees” on Capitol Hill, he said: Under Pallone and current Chairman Greg Walden, R-Ore., it has a “strong reputation for serious oversight.”

Democratic control of the House Commerce and House Communications gavels is much more “meaningful” from an oversight perspective than for legislative prospects, said Free Press Policy Director Matt Wood. House Democrats will likely “have a lot more substantive questions to ask” the FCC than Republicans did when they repeatedly grilled Wheeler on the 2015 net neutrality rulemaking and other issues. Wood predicted a focus on “the kinds of broadband competition and investment claims that this FCC is making,” especially in relation to the creation of its economics office. House Democrats will also want to examine FCC deal review practices, he said.

'More, Better Hearings'

Pai can anticipate "more hearings and better hearings" because of stronger House committee and subcommittee oversight, though it's not clear that will put the brakes on his agenda, said former Democratic Commissioner Michael Copps. The agency will likely be "a little more careful" in directions it pursues, and the Democratic House may see Pai switching tactics, Copps said. He said the Democratic majority will have a host of issues it's interested in -- from net neutrality and broadband deployment to Lifeline and privacy -- but lawmakers need to prioritize and "have a rifle approach [rather than] a shotgun" and pursue legislation on every subject.

“FCC proceedings may slow down a bit, particularly media modernization efforts, as commissioners and staff are responding to House inquiries, letters and hearings,” said Brent Skorup of the Mercatus Center. “Fortunately for the FCC majority, they front-loaded most of the major regulatory items in the first two years of the Trump administration, like open internet regulation repeal, the creation of the Office of Economics & Analytics, and broadband infrastructure items. I hope the FCC will continue to repeal legacy regulations and make existing programs more cost-effective, but progress may slow down.”

Others downplayed the risks. "It complicates the oversight environment for the FCC majority, but I doubt it has a major impact on the substantive direction," emailed Paul Glenchur, Hedgeye analyst. "A slightly larger GOP Senate majority may help if there is FCC turnover and the need for a relatively swift confirmation process."

The election impact on the FCC "is minimal because of the largely bipartisan nature" of the House Commerce Committee, said ex-Rep. Rick Boucher, D-Va., a former Communications Subcommittee chairman now at Sidley Austin. He hopes the FCC will engage "directly" with the subcommittee to help develop a legislative compromise that creates net neutrality protections under Communications Act Title I: the agency "has a huge reservoir of expertise." He wouldn't be surprised to see a subcommittee hearing to review FCC restrictions on local authority and fees related to 5G network deployment.

Why Change?

"If I'm [FCC] chairman, I'm not sure you change anything," said ex-Rep. Lee Terry, R-Neb., another former subcommittee member now at Kelley Drye. "You've got a Senate that will back him up. You've got a House that will focus on net neutrality and the rollout of 5G." Net neutrality is divisive, but interest in a fast 5G rollout "has bonded the parties," he said. "That's one of the things that both sides of the aisle can work on."

Lawyer/lobbyist David Goodfriend said "active" oversight could improve transparency of decision-making by the FCC and executive branch. He said there could be a House hearing on T-Mobile/Sprint, with one question on how Pai would react if the Wireless Bureau staff concludes that going from four to three national wireless carriers would be against the public interest. Pai won't answer that question, but "the message is not for us, it will be for him," said Goodfriend, whose clients include Dish Network and the Communications Workers of America, opponents of the deal. "There are deeper questions that Democrats will ask about the way the Trump administration is governing" on competition, consumer pricing and other issues, he said.

Pai’s time “will be taken up more by a new Congress, the new leadership and by the oversight committees,” said former Telecommunications Industry Association President Grant Seiffert. “That’s the natural expectation.” Seiffert hopes the focus will remain on how communications can help the economy. “The issues are critical that the FCC is addressing,” he said. “We’ll see how the FCC finds common ground with the agenda in the House.”

Pai has made the chairmanship less “imperial,” said Berin Szoka, president of TechFreedom. “If Democrats were smart, they'd insist on passing” the FCC Process Reform Act (HR-290) “that many of them have already voted for in the House three times since 2012, to further empower non-chairman commissioners -- most notably, fixing the Sunshine Act,” Szoka said.

With little chance Congress will enact communications legislation, the biggest impact will be “the possibility of more hearings aimed at distracting the agencies from their current agendas,” said Larry Downes, director at the Georgetown Center for Business and Public Policy Project. “That’s not really much of a distraction, and one with no teeth,” he said. “The Republican majorities held lots of hearings, anyway. ... Fortunately for the FCC majority, they front loaded most of the major regulatory items in the first two years of the Trump administration."