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House Committee Slams FCC Chairman for "Deception and Distrust"

110-page investigative report exposes "broken" agency culture, process

By Martin H. Bosworth
ConsumerAffairs.com

December 9, 2008

The report, entitled "Deception and Distrust: The Federal Communications Commission Under Chairman Kevin J. Martin," was the result of a year-long investigation of the agency's rulemaking and procedures under Martin's chairmanship. According to Bart Stupak (D-MI), chairman of the Oversight and Investigations Subcommittee, "Our investigation confirmed a number of troubling allegations raised by individuals in and outside the FCC."

"The Committee staff report details some of the most egregious abuses of power, suppression of information and manipulation of data under Chairman Martin's leadership," Stupak said.

"[T]he findings suggest that, in recent years, the FCC has operated in a dysfunctional manner and Commission business has suffered as a result," said Commerce Committee chairman John Dingell (D-MI). "It is my hope that the new FCC Chairman will find this report instructive and that it will prove useful in helping the Commission avoid making the same mistakes."

"A continuous backlog of matters"

The Committee investigators investigated thousands of records, documents, and e-mails, and conducted 73 interviews with current and former FCC employees as well as insiders in the telecommunications industry. Their findings included:

• Martin allegedly deliberately interfered with reports on providing cable television service "a la carte," going so far as to order a report commissioned by his predecessor Michael Powell to be revised and republished, without soliciting additional public comment. Where the first report said that a la carte programming would not offer substantial benefits to consumers, the second report made the opposite conclusion, which Martin — a staunch advocate of a la carte service —favored.

• Under Martin's direction, the FCC allegedly manipulated or withheld data on broadband over powerlines (BPL technology) from the public, in an effort to push it as an alternative to regular cable or telecom Internet service. Although BPL technology has improved since the time of the report, it is still not considered advanced enough to be an effective means to deliver Internet access.

• FCC employees described a culture of extreme micromanagement at the agency under Martin, where every decision, no matter how trivial, had to go through his office for approval, causing a "continuous backlog of matters waiting for [the Chairman's] review." The employees alleged that Martin demoted senior staffers to junior-level duties, forbade them from communicating with employees of other Federal agencies, and withdrew authorization for ongoing projects without explanation. "Projects that were authorized in the past are not necessarily considered to be authorized at this time," the agency said.

• When the FCC's Enforcement Bureau attempted to levy a $1.3 million fine against T-Mobile for violations of the Do Not Call Act, the action was leaked to T-Mobile prior to full adoption by the Commission. Martin's staff then stepped in to help T-Mobile reduce the fine to $100,000.

"Climate of fear"

Martin was previously grilled by the Commerce Committee for his alleged favoritism towards telecommunication companies such as AT&T and Verizon, while aggressively pursuing new regulations against their rivals in the cable industry.

Martin and his fellow Commissioners were also criticized by the House's Subcommittee on Telecommunications for the failure of the recent wireless spectrum auction to net any bidders for creating a public safety network for first responders to use.

And a recent report by the Government Accountability Office (GAO) found that the FCC was failing to effectively follow through and resolve many of the thousands of consumer complaints it receives. The GAO said that the agency used multiple separate, incompatible systems and relied too heavily on paper documents for noting and tracking complaints.

The Commerce Committee investigators said in the report that the normal next step would be to call for a hearing on their findings, but "due to the climate of fear that currently pervades the FCC," many of the witnesses were too afraid to come forward. Martin, many members of his staff, and other FCC officials were offered opportunities to discuss the investigation, but all of them either declined the invitation or ignored it.

The report is available as a free download from the Commerce Committee's Web site.

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