FCC Rulings and Regulations

Like cockroaches, it appears that robobandits are hard to kill. A year ago, the Federal Communication Commission (FCC) had a firm grip on robocallers after it put a chokehold on carriers to put a stop to it or else.

Now, a year later “or else” has returned – this time, though, the FCC is giving carriers the stinkeye about allowing scam-oriented robotexts through to Americans’ phones. The agency has a pretty solid reason going for it, too. In the last year, robotexts have jumped from 1 billion to 15.6 billion a month.

The FCC has laid down the law to seven phone companies, telling them that they will be shut down for allowing scam robocalls on their networks if they don’t put a stop to the robotext scourge. This is a big shift for the FCC’s bedside manner – in fact, it’s the first time the FCC has made such a move.

In response to these developments, Teresa Murray, Consumer Watchdog for U.S. PIRG Education Fund praised the FCC's move. “The problem is not going to be solved in a day. But these are real developments.

“Bad guys will continue to go after our information and money. Scams are a chameleon-like problem with no end in sight. Robocalls are slowing while robotexts are skyrocketing. We still see phishing emails, which started more than 20 years ago, while targeted messages through social media are becoming a bigger menace.” 

What companies are included in the FCC’s demand? 

The FCC has put Akabis, Cloud4, Global UC, Horizon Technology Group, Morse Communications, Sharon Telephone Company, and SW Arkansas Telecommunications and Technology on notice.

Those companies have to show cause soon, too. The agency has given them 14 days to explain why it should not remove them from the database.

But what does “removal from the database” actually mean?

When ConsumerAffairs examined the FCC’s letter to Cloud4, it said if the company didn’t straighten up its act by the end of those two weeks, “all calls from Cloud4’s customers would be blocked and therefore no traffic originated by Cloud4 would reach the called party.”

“This is a new era. If a provider doesn’t meet its obligations under the law, it now faces expulsion from America’s phone networks,” FCC Chairwoman Jessica Rosenworcel said in announcing the move.

“Fines alone aren't enough. Providers that don't follow our rules and make it easy to scam consumers will now face swift consequences.”

Facebook has pledged to depoliticize Facebook… again. 

In a quarterly earnings call, Facebook reaffirmed that it’s not going to talk politics anymore. Company CEO Mark Zuckerberg said that Facebook is taking a hard look at how it can reduce the amount of political content that users see in their News Feed. 

“One of the top pieces of feedback that we’re hearing from our community right now is that people don’t want politics and fighting to take over their experience on our services,” Zuckerberg vowed, doubling down on the social media giant’s promise to ratchet down political content on the platform following the uprising at the U.S. Capitol on January 6. 

Zuckerberg also announced that Facebook is getting out of the civic and political group recommendation business altogether -- a move made permanent after the company temporarily paused recommending those groups to U.S. users in October as it got ready for the 2020 U.S. elections. 

True or false?

Zuckerberg has made similar promises before, but he couched the new line the company is taking as a “continuation of work we’ve been doing for a while to turn down the temperature and discourage divisive conversations.”

Contrary to Zuckerberg’s claims, nonprofit news site The Markup said it found that Facebook continued to recommend political groups to its users throughout December and on into the new year.

“We found 12 political groups among the top 100 groups recommended to the more than 1,900 Facebook users in our Citizen Browser project, which tracks links and group recommendations served to a nationwide panel of Facebook users,” found The Markup’s Leon Yin and Alfred Ng. “Our data shows Facebook also continued to recommend political groups throughout January, including after it renewed its promise not to on Jan. 11.”

Caught in the headlights, Facebook had no real answer other than saying it would look into the matter.

“We have a clear policy against recommending civic or political groups on our platforms and are investigating why these were recommended in the first place,” Facebook spokesperson Kevin McAlister wrote in response to The Markup’s findings.

President Donald Trump claims to have killed an unprecedented amount of regulations, in what he says is a victory for Americans and our freedom. Is it possible to list every single regulation we lost in 2017?

Both Harvard’s and Columbia’s law schools are tracking every environmental rollback they can find; a recent count says a total of 60 environmental regulations have been gutted in 2017. 

The Heartland Institute, a conservative think-tank, is also trying to keep track. They are listing everything Trump has done to “make freedom rise.” But their list unimpressively does not detail every miniscule freedom that rose.

In total, the Trump administration is taking credit for killing 860 regulations, though some reports indicate that Trump is exaggerating those numbers. 

So no, it turns out that it’s not realistic to list every regulation that Trump killed in 2017. What follows is a list of twenty unexpected freedoms you now have. Are you tired of disclosing how much money you paid to foreign governments or having to make aerosol sprays without toxic solvents? Then get ready America, because it’s going to be an awesome 2018!

Freedom to accidentally kill migratory birds
Companies that accidentally kill migratory birds, namely the energy industry, will no longer be criminally prosecuted, the Trump administration announced in December, leading a National Audubon Society officer to proclaim that “Christmas came early for bird killers.”

Freedom to bully farmers
The growing power of industrial farms and multinational corporations over American agriculture has been felt particularly by independent farmers. Numerous chicken growers, for instance, have described being “bullied into signing narrower and narrower contracts [with meatpackers] until their business was unsustainable,” the United States Department of Agriculture (USDA) admitted in 2016.   

It was a rare acknowledgement from the USDA, an agency that is typically characterized as protecting the interests of Big Agriculture. But under the outgoing Obama administration, the USDA proposed a set of modest measures, called the  Farmer Fair Practices Rules, to make it easier for independent farmers to take legal action against the abusive meatpackers they described.

The USDA held off on implementing the rules after Trump issued a regulatory freeze, ordering all government agencies to not enact any new Obama-era regulations. A coalition of 82 groups representing family farms, unions and consumers wrote a letter asking Trump to preserve the reforms, saying their situations were dire under increasingly abusive multinational corporations.  Major players in the meatpacking industry, on the other hand, urged Trump to drop the Farmer Fair Practices Rules because they claimed the rules could lead to frivolous litigation. 

The Trump administration ultimately sided with the more powerful industry interests and shelved the Obama-era rules, a statement that could apply to many policy decisions in 2017. 

Freedom from educational oversight
The Every Student Succeeds Act was Obama’s answer to the Bush-era No Child Left Behind act. A key measure would have mandated that every state submit its own educational plan to address weaknesses and needs in its educational system, which the federal government at the time said would “give states flexibility to create their own educational visions.” Trump in March used his authority under the Congressional Review Act to overturn that and other education the measures, saying he was “removing an additional layer of bureaucracy to encourage freedom in our schools." 

Freedom from energy-efficient appliances
Makers of five different categories of appliances had agreed to new, tougher efficiency standards under Obama. But the industry wasn’t satisfied with everything. One appliance industry representative told the Washington Post that  “we are not particularly happy with the boiler rule,” though he was okay with Obama’s walk-in cooler and fridge rule. The Department of Energy under Trump withdrew the rules and got sued by coalition of environmental advocacy groups and 11 states in June. The DOE then brought back some, but not all, of the appliance conservation measures, saying it in the Federal Register that it “determined that it did not receive any adverse comments providing a basis for withdrawal.”

Freedom from more fuel-efficient vehicles
The Alliance of Automobile Manufacturers, the trade group representing most major car companies, has been lobbying the Trump administration to strike down new fuel efficiency standards in vehicles that Obama finalized in 2012. The standards, set to go in effect by 2025, would have mandated that the average fleetwide fuel economy be 54.5 mpg. But in March, Trump agreed to take another look at the rules, the first step in possibly revoking them. A coalition of environmental and consumer advocacy groups wrote an open letter to automakers in October urging them to drop their lobbying campaign and stick with the tougher standards, but carmakers claim that following the regulations will cost too much money. 

Freedom for toxic solvents to remain in consumer products
Thousands of manmade chemicals have been “grandfathered” into consumer products under longtime federal laws that advocacy groups say are deeply outdated. But during Obama’s final days in office, the EPA proposed banning two toxic solvents,  trichloroethylene and methylene chloride, from paint thinners and aerosol sprays. Such a ban would have marked the first time that the EPA has prohibited use of a commercial chemical “in more than a quarter-century,” according to Chemical & Engineering news, the journal of the American Chemical Society. But the prohibition never happened. On December 14, Scott Pruitt’s EPA announced plans to postpone the ban on the toxic solvents indefinitely. 

Freedom to drug-test more people applying for unemployment benefits
States were traditionally banned from drug-testing people seeking unemployment benefits, until Obama passed a law allowing it in limited circumstances.  Congress voted this year to revoke that law, in hopes to expand the circumstances in which beneficiaries may be drug tested. 

Freedom from compensating Native American tribes for coal
The Interior Department under Obama had proposed rules to ensure that American Indian tribes receive “the maximum revenues” from coal mined on their land. Though the Obama administration claimed the rules would result in higher mineral payments to tribes, Trump’s analysis concluded it would not, claiming that “its scope is not broad enough to address the many concerns the commenters have raised about the Federal coal program more broadly.” Yet it was the coal industry that was behind the lobbying campaign to repeal the rules. 

Freedom to own a stake in for-profit colleges (even if you’re counseling veterans)
Veterans Affairs employees had long been prohibited from taking money from for-profit colleges. Taking money from the problematic institutions may lead VA employees to encourage veterans to choose them, the thinking went. That particular ethics law had been in effect for fifty years, but in October, the VA suddenly decided it created “illogical and unintended consequences.” 

Freedom to intensify deadly diseases
The New York Times discovered that the feds had lifted a three-year ban on experiments into altering deadly diseases. Some scientists apparently wanted to see whether it was possible to make deadly diseases more contagious. 

Freedom from getting sued by a customer (if you’re a bank)
Vice President Mike Pence cast the tie-breaking vote in what experts said was the biggest overhaul of consumer banking measures under the Trump administration to date. "Senators who voted in favor of this resolution just handed a gift to bad financial actors," said Melissa Stegman, senior policy counsel at the Center for Responsible Lending

Freedom from determining a leak threshold on respirator masks
This obscure Obama-era rule, attempting to establish a uniform label for determining whether a mask is leak-proof, was proposed in 2009 but never finalized. Under Trump, OSHA listened to concerns from mask respirator companies saying the regulation could exclude “good performing” products from the market.

Freedom from disclosing how much money you have given to foreign governments  (if you’re an oil Company)
Exxon was very happy when this rule got overturned. 

Freedom to dump waste in streams
Coal companies and others in the energy industry complained that the stream rule impeded their business. 

Freedom from disclosing how much you charge for luggage (if you’re an airline)
Customers typically prefer to know how much their bags will cost them when they are looking at ticket prices, but airlines would rather they find out just as they are buying tickets, at the last possible minute. Trump revoked this Obama-era regulation in December. 

Freedom to pool workers’ tips (if you’re the boss)
The Department of Labor is taking public comments on a proposal to bring back tipping pools, which the Obama administration had banned in 2011. If it goes through, employers can pool their servers’ tips once again, and will probably pocket about 16 percent of what servers earned, according to an analysis by the Economic Policy Institute.

Freedom to discriminate (if you’re a business)
Attorney General Jeff Sessions in September filed an amicus brief in support of the Masterpiece Cakeshop, the Colorado bakery currently trying to argue in the courts that it shouldn’t have to sell wedding cakes to gay couples. 

Freedom to build flood-prone roads
Many of the houses flooded in Houston due to Hurricane Harvey were not in official “flood zones” as designated by the federal government, meaning those homeowners won’t be eligible to receive flood insurance. Flooding has also plagued federal infrastructure such as a naval base in Norfolk. Addressing long-standing criticisms that the US government has not been preparing for rising sea levels, the Obama administration proposed a requirement that rising sea levels be taken into account before building (or rebuilding) federally-funded infrastructure. But ten days before Hurricane Harvey hit, Trump signed an executive order to revoke those flood standards, “in order to ensure that the Federal environmental review and permitting process for infrastructure projects is coordinated, predictable, and transparent.”

Freedom From new food labels (delayed until 2020)
Nutritionists want bigger nutrition labels that more clearly list calories per packaging and sugars. The labels would also include advice targeted to pregnant women and children under four. The new labels were supposed to be rolled out on packaged food in 2018, but the Trump administration pushed the date forward two years, which they say will give food companies more time to comply. 

Freedom to drive trucks, even if you have a tendency to spontaneously fall asleep
After several bad crashes involving train engineers or truck drivers, the Obama administration proposed testing professional drivers for sleep apnea, a serious sleep disorder that can impact one’s ability to stay awake during daytime. Incidence of the disease in Americans has risen dramatically over the years. The concern was that truck drivers who didn’t get a good night’s sleep due to sleep apnea may be prone to spontaneously falling asleep on their long, often unforgiving shifts. But the Department of Transportation in 2017 withdrew the proposal to require sleep apnea testing, saying only that “the Agencies have determined not to issue a notice of proposed rulemaking at this time.”

The Federal Communications Commission (FCC) has charged a health insurance telemarketer with making over 21 million illegally spoofed robocalls.

Officials say that Philip Roesel, owner and operator of Best Insurance Contacts (d/b/a Wilmington Insurance quotes) deliberately falsified his caller ID information in order to allegedly harm, defraud, and wrongfully obtain money from unsuspecting consumers. This type of action violates the Truth in Caller ID Act, and the agency has proposed a fine totaling over $82 million.

“[This fine] sends yet another message to illegal robocallers,” said FCC Chairman Ajit Pai. “We will do everything in our power to put you out of business.”

"Could have risked lives"

According to the FCC, Roesel specifically targeted vulnerable consumers – such as the elderly, infirm, and low-income families – in an effort to sell health insurance. While allegedly spoofing his caller ID information was harmful enough, officials say that the volume of calls was so large that it interfered with other important services.

One medical paging service called Spōk complained that the robocalling campaign disrupted its network. An investigation of Roesel’s call records from October 2016 to January 2017 revealed that over 82,000 health insurance telemarketing calls were made during that period that used falsified caller ID information; that finding represents the basis for the agency’s proposed fine.

“This adversely harmed emergency communication between doctors, EMS and other first responders,” said FCC Democratic Commissioner Mignon Cleburne. “This could have risked lives.”

The proposed fine is the latest action by the FCC in its efforts to crack down on illegal robocalls. Back in June, the agency proposed a $120 million fine against Adrian Abramovich for impersonating well-known companies to make 100 million spoofed robocalls. A New Mexico company also faced a $2.8 million fine last month for making wireless calls to consumers without their consent.

Consumer advocates are livid in their denunciation of a report by the U.S. Treasury Department that recommends dismantling the Consumer Financial Protection Bureau (CFPB) and rolling back many of the regulations imposed on the financial services industry in the Dodd-Frank Act of 2010.

"Dodd-Frank significantly changed the federal financial regulatory landscape, imposed new requirements on a broad array of U.S. financial institutions, prescribed more than 390 agency rulemaking requirements, and mandated 67 studies by various federal entities. The net result of Dodd-Frank has been the largest and most complex increase in financial regulation in modern times," the report asserts. 

Treasury Secretary Steven T. Mnuchin said his goal is to reduce unnecessary regulations.

“We are focused on encouraging a market environment where consumers have more choices, access to capital and safe loan products – while ensuring taxpayer-funded bailouts are truly a thing of the past,” Mnuchin said as he released the report yesterday.

"Most ominous sign yet"

“This is the most ominous sign yet that Republicans will stop at nothing in their quest to eliminate important protections from Wall Street fraud and recklessness put in place after the 2008 economic collapse," said Karl Frisch, executive director of Allied Progress, a liberal advocacy group. "Mnuchin would give Wall Street free reign to gamble with our economy while gutting the Consumer Bureau and leaving hard-working families nearly defenseless against predatory financial institutions."

Mnuchin said the recommendations are intended to relieve banks, mortgage lenders, and others from the supposedly oppressive regulations that business interests say have stifled the economy. 

“Properly structuring regulation of the U.S. financial system is critical to achieve the administration’s goal of sustained economic growth and to create opportunities for all Americans to benefit from a stronger economy,” said Mnuchin. 

Mnuchin said that over a four-month series of meetings with stakeholders, Treasury officials got "a very clear picture of redundancy, fragmentation, and inefficiency in our regulatory framework."

The report echoes many of the provisions of the Financial CHOICE Act, already passed by the House, but asserts that many of the recommendations can be made through regulatory changes and executive actions without waiting for Congressional action.

"Reasonable safeguards"

But Yana Miles of the Center for Responsible Lending said the provisions Mnuchin calls overly restrictive were enacted in response to the financial meltdown of 2008, which many blamed on recklessness by the financial services industry.

“The Dodd-Frank law established reasonable safeguards against dangerous financial practices, such as protection from toxic mortgage loans, and established a consumer agency that serves as our nation’s watch dog on Wall Street," Miles said.

"Since its establishment, the CFPB has returned nearly $12 billion in relief to more than 29 million people who’ve suffered at the hands of big banks like Wells Fargo, for-profit colleges like ITT Tech, car-title and payday lenders, credit card companies, and other financial institutions. Any attempt to roll back these measures, as the Treasury Department suggests, would be a disservice to working families," Miles said in an email.

"The Treasury’s comments and recommendations is a warning sign of a return to those dark days.” 

The report is expected to be used by the Trump Administration as the blueprint for a series of executive orders, although no firm timetable has been made public.

President Trump is promising to do "a big number on Dodd-Frank," the consumer protection legislation that was passed in 2010 and, among other things, enabled the creation of the Consumer Financial Protection Bureau.

Trump says that financial regulation and consumer protection are fine, but he said that the rules put in place by Dodd-Frank, along with other government regulations, are strangling businesses.

At a White House meeting with small business leaders today, Trump called Dodd-Frank "a disaster" that stymies entrepreneurs who want to start new businesses and retards the growth of existing businesses large and small.

The meeting followed a brief event at which Trump signed an executive order calling for the repeal of two regulations each time a new regulation is implemented, fulfilling a pledge he made on the campaign trail. 

Vowed to dismantle

The Dodd-Frank Act -- named for its primary sponsors, ex-Sen. Christopher Dodd (D-Connl) and ex-Rep. Barney Frank (D-Mass.) -- requires banks to undergo periodic checks to monitor their liquidity and withstand financial shocks like the 2008 collapse of the housing market. It also provides the legal framework for the Consumer Financial Protection Bureau (CFPB), which has clamped down on financial services of all sorts, including mortgage and student loan lending and servicing, payday loans, auto finance, and credit cards.

The CFPB also faces a serious legal threat. In an October 2016 ruling, a divided federal appeals court found the structure of the CFPB unconstitutional. The CFPB filed a petition for a rehearing of the decision, and that petition is currently pending before the court. Consumer advocates and 17 state attorneys general have filed briefs supporting the CFPB.

Trump's advisers have vowed to dismantle Dodd-Frank but haven't said how they would go about it, and Trump did not elaborate on that today. 

While there has been some pressure from parts of the financial services industry to abolish Dodd-Frank, not everyone thinks that's a good idea. Financial service firms have adapted to the regulations and, in some cases, expanded into other lines of business and a wholesale change now could upend their strategies, the theory goes.

"We're not asking for wholesale throwing out Dodd-Frank," J.P. Morgan Chase CEO Jamie Dimon said at a December 2016 conference, according to a New York Times report. 

2 for 1 order

Trump's decree that two regulations be eliminated for each new one isn't being well-received by legal experts who say it sounds good but will be difficult to administer.

"The simplicity of the 2 for 1 Executive Order will have a lot of popular appeal to the anti-Washington crowd but it will be extraordinarily difficult to implement," said Laurence Platt, Consumer Financial Services partner at Mayer Brown. 

"The standard that the incremental cost of new regulations shall be no greater than zero really means that there will be no new regulations," Platt said. "What does an agency do if Congress mandates an agency to issue implementing regulations? And how can an agency repeal two regulations that Congress previously mandated the agency to issue?”

Cigar regulations, transgender bathrooms, and alternative fuels are just a few of the least favorite things on a list put together by Rep. Mark Meadows (R-NC), a member of the House Freedom Caucus. He has catalogued more than 200 rules and regulations, mostly dating from the Obama Era, that conservatives want to deep six as soon as possible.

The rules that Meadows says have been "devastating for working families, businesses, and taxpayers" also include overtime rules, financial services regulations, and environmental restrictions.

“These last eight years, we have seen a disturbing trend of the federal government unnecessarily inserting themselves more and more into the lives of hardworking Americans – and the results have been economically disastrous,” Meadows said. “When the American people spoke on November 8, they provided conservatives with an opportunity to restore order in our government and to remove the out-of-control bureaucratic red tape that so often stunts the growth of otherwise successful Americans."

Meadows said he and his colleagues have been in touch with the Trump transition team and are hoping to talk the incoming administration leaders into rolling back and repealing as many of the regulations as possible during their first 100 days.

"Help is on the way," Meadows vowed.

Must-go list

Other items on the must-go list include:

• Nutrition standards for the school lunch program;
• Food safety rules for seafood;
• Country of origin information for food;
• Student loan forgiveness for students stranded by for-profit school closures;
• Standards for ceiling fan light kits;
• Conservation standards for appliances;
• FDA regulation of tobacco;
• Standards for antiseptic soap;
• Confidentiality of patient medical records;
• Restrictions on sunlamp usage;
• Increases in the minimum wage;
• Environmental impact reviews for projects on federal land;
• FAA rules for drones;
• Office of Global Climate Change at the State Department; and
• Net neutrality rules.

The complete list is available online.

Small but powerful

What is the House Freedom Caucus? It's a small but influential group that pursues a limited-government agenda. The Pew Research Center last year identified 36 conservatives who, through public statements or actions, had identified with the House Freedom Caucus. Most were younger, many were first-termers, and several were Tea Party members.

The group announced its formation in January 2015, saying it would work to advance "an agenda of limited, constitutional government in Congress," according to a news release from Rep. Matt Salmon (R-Ariz.)

"The House Freedom Caucus gives a voice to countless Americans who feel that Washington does not represent them. We support open, accountable and limited government, the Constitution and the rule of law, and policies that promote the liberty, safety and prosperity of all Americans," Salmon said.

Just in time for Thanksgiving, Federal Communications Commission (FCC) chairman Julius Genachowski has declared the proposed AT&T/T-Mobile merger a turkey.

The full FCC must still vote, but Genachowski said that after reviewing 200,000 pages of documents and holding more than 100 stakeholder meetings, he has concluded the deal is not in the public interest. The FCC also reviewed 50 petitions to reject the deal from companies including Cablevision, C Spire, DISH, EarthLink, and Sprint.

Technically, the FCC cannot block the deal and it's likely the affair will wind up in court, but Genachowski's finding pretty effectively sticks a fork in it and finds it over-cooked.

The FCC has the power to approve the deal but if it finds it unacceptable, it can only refer it to an administrative law judge, who is obligated to consider all of the evidence gathered during the FCC's review.

And the conclusion of the FCC's review, as Genachowski reads it, is that a combined AT&T and T-Mobile would result in unprecedented concentration and massive layoffs despite AT&T's claim that it would save jobs and speed the deployment of high-speed broadband to rural and underserved areas.

DOJ Suit

The U.S. Justice Department has reached similar conclusions and has already sued to block the merger.  That case is expected to go to trial in February, and the FCC is likely to hold off until the outcome of that case is clear. If the DOJ prevails, no further FCC action would be needed.

Just a few weeks ago, Attorney General Eric Holder made it known the Justice Department's opposition is not a token gesture.  He said litigators are "ready and eager" to go to trial.

AT&T issued a statement calling the FCC's move disappointing.

"It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the US economy desperately needs both," Larry Solomon, senior vice president of corporate communications for AT&T, said. "At this time, we are reviewing all options."

Despite staunch opposition from Congress and media watchdog groups, the FCC voted 3-2 to relax its rules against businesses consolidating ownership of media outlets in a given region.

Under the new rules, broadcasters in the nation's 20 largest media markets can now also purchase newspapers for their business, not that there has been any great rush to snap up moribund print properties, with the obvious exceptions of Dow Jones and the Tribune Company.

The 3-2 vote was strictly along party lines, with FCC Chair Kevin Martin and commissioners Robert McDowell and Deborah Tate, all Republicans, supporting the rule change. Commissioners Jonathan Adelstein and Michael Copps, both Democrats, opposed it.

Critics of the vote say it will open the door to more corporate buyouts of local media and decrease quality local journalism. The Free Press media coalition blasted the decision, with executive director Josh Silver saying that FCC chair Kevin Martin was "ignoring the public will and defying the U.S. Senate."

"[Martin's] decision to gut longstanding ownership rules shows once again how the largest media companies with their campaign contributions and high-powered lobbyists are corrupting the policymaking process at the expense of local news coverage and independent voices," said Silver.

Martin's push to pass the new rule also faces opposition in Congress. Prior to the vote, 25 senators from both parties wrote Martin to demand he slow down the vote and give the public more time to comment on the issue, as is customary with most proposed government regulations.

The letter, signed by Commerce Committee chairman Daniel Inouye and all four Senate Democrats running for President -- Barack Obama, Hillary Clinton, Chris Dodd and Joe Biden -- as well as Republicans Ted Stevens and Olympia Snowe, said that Martin "shortchanged the comment process...you have not completed a full review of localism prior to forcing a vote on a rule change dealing with media ownership limits."

"When you proposed a new rule on the effects of communications towers on migratory birds, you allowed for a 90 day comment period," the Senators wrote. "How could you decide to allow 90 days for a migratory bird rule and then shortchange the public on the media ownership rule?"

Sen. Maria Cantwell (D-WA), who signed the letter, said prior to the vote that Martin's decision would have "consequences." Congress is certainly not afraid to take action against the FCC, said Cantwell. "In the Senate, were going to make sure that if we have to pass legislation stopping the FCC, we will.

Friends in high places

Martin, however, has the backing of the White House to pursue the media consolidation changes. Commerce Secretary Carlos Gutierrez wrote Senate Majority Leader Harry Reid prior to the vote, warning him that the Bush administration would fight any "attempt to delay or overturn these revised rules by legislative means."

Martin, a former Bush campaign operative whose wife Cathie has worked for both Bush and Vice-President Dick Cheney, has aggressively pursued a conservative, free-market agenda since succeeding Michael Powell to become FCC chair in 2005.

Martin oversaw the mega-merger of BellSouth and AT&T, creating -- once again -- the world's largest telecommunications company. Martin has also opposed legislation protecting the right of "net neutrality," enabling small Internet publishers equal access to the network.

Martin has been a friend indeed to the telecommunications industry, supporting video franchising rules that enable Verizon and AT&T to roll out high-speed service to communities without complying with local or state franchising regulations -- regulations that cable companies still have to abide by.

But Martin's generally hands-off attitude towards market issues comes to an end with the cable industry. Martin has continually pushed for greater regulation of cable companies and diversification of cable subscriptions in given areas, as well offering of "a la carte" channel packages that enable subscribers to only buy channels they want.

Many critics see the "a la carte" move as a back-door attempt to starve out cable channels that present adult-oriented content.

Martin recently introduced a proposal to reinstate a cap on cable companies owning more than 30 percent of the national market, a move that was supported by consumer groups and bitterly opposed by the cable industry -- and expected to be voted on at today's meeting.

Change in the weather

Martin's rush to push the media consolidation relaxation waiver may be due to several large media deals that would run into problems without it, such as Rupert Murdoch's buyout of the Dow Jones corporation and Sam Zell's desire to purchase the Tribune publishing company, though Martin has granted both deals waivers to continue.

The rush may also be attributed to Martin's tenure as FCC chair coming to an end. With a presidential election looming and the possibility of a Democrat taking the White House and the Democrats strengthening control of Congress, industry insiders speculate that Martin may be ensuring both the goals of the Bush administration and his own future political or lobbying ambitions.

Former FCC commissioners usually wind up practicing communications law on Washington's K St., offering advice and counsel to the media conglomerates they tenderly regulated during their time in office. Thus, one's actions today can lay up rewards in the next life, i.e., the private sector.

An especially vigorous House panel grilled the Federal Communications Commission (FCC) today, with Commerce Committee Chair John Dingell (D-MI) asserting that the FCC was "overstepping its authority" by imposing its video franchising rules on states and municipalities.

Referring to the FCC's recent order to states to streamline the approval of new video franchises, Dingell said that "[i]f reform of that regulatory structure is necessary, then it is Congress' prerogative to take such action as we have done before."

The FCC's rules make it easier for Verizon, At&T and other would-be competitors to get local cable TV franchises. At the same time, they limit the authority of states and municipalities to oversee the new entrants and protect consumers.

Under the new rules, local communities would have a time limit of six months to approve new entrants into a market for video, and 90 days for companies that already provide other services. The rules also free new franchises from requirements to "build out" new services to an entire community, meaning that new entrants could choose to serve only the more affluent sections of a city or region.

Critics of the rules say they were designed solely to benefit AT&T; and Verizon, with little regard for consumers or other players in the marketplace.

"[Franchise reform] is not the role of the FCC. The Commission chose to ignore the well-settled divisions of responsibilities, that is unwise," Dingell said.

At another point, FCC chairman Kevin Martin was asked by Telecommunications Subcommittee chairman Ed Markey (D-MA) why the commission did not investigate reports that the National Security Agency (NSA) had illegally acquired the phone records of Americans. Martin responded that the agency had been prevented from investigating due to "national security" concerns.

Markey said that Martin should expect to be a "frequent visitor" before the committee, and Dingell agreed, suggesting that the committee should hold oversight hearings of the FCC on a monthly basis.

Dingell's comments were typical of the increased scrutiny the Republican-led FCC is facing in a Democratic Congress, at a time when the FCC is involved in numerous issues ranging from public-interest rights for digital television to the possible reinstatement of caps on subscribers to cable companies. The FCC is planning to issue a new order codifying that cable companies cannot serve more than 30 percent of potential subscribers in the United States.

The order stems from a 1992 ruling to prevent mass consolidation of the cable industry and reduce subscriber choices. Cable companies such as Comcast and their lobbyists have challenged the 30-percent cap in recent months as unnecessary, given the proliferation of alternative entertainment services that provide video.

Cable companies also objected to the franchising decision, saying it represented a giveaway to their competitors in the telecom industry, and that they would negotiate for the streamlined rights as well.

Martin's friendliness towards telecom companies was demonstrated by his heavy push for the merger of AT&T; and BellSouth to form the country's largest telecom company. The merger was stalled over objections from Democratic Commissioners Jonathan Adelstein and Michael Copps, but was passed after AT&T; agreed to support "net neutrality" for its basic Internet services -- a concession Martin opposed and intimated he would not enforce.

That stance drew criticism from Committee member Anna Eshoo (D-CA) during the hearing. Rep. Eshoo said it was "rather extraordinary" that Martin would state his intent to not enforce the net neutrality provision of the agreement. Martin insisted that he would do so.

Eshoo was particularly critical of Martin's style of running the FCC, claiming that companies had complained to her of Martin's "heavy-handed manner."

"I continue to hear complaints that the commission is unresponsive, insular and even capricious at times," she said.

The FCC has also been criticized for burying or suppressing reports that would contradict their political objectives.

During a push by Martin to enable greater consolidation and cross-ownership of local television stations, an FCC report surfaced that claimed local news stations benefited from local ownership. The report, commissioned by Martin's predecessor, Michael Powell, was ordered destroyed. Martin claimed he had never seen the report.

The FCC recently terminated another study that found wireless emergency 911 services did not work effectively for cellphones when called from inside buildings.

The report's author, Dale Hatfield, presented his findings to the FCC, but was told the study was being discontinued. That didn't satisfy Rep. Mike Doyle (D-PA), another Telecommunications Subcommittee member. Doyle said that Martin was "strangely silent" on the matter, which he found "puzzling," and promised to pursue it further.

As 2006 ticked to a close, the Federal Communications Commission voted unanimously to deliver a Friday afternoon gift to mighty AT&T;, approving its $85 billion takeover of BellSouth, over the objections of consumer groups who said the merger delivered no benefits to consumers.

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It's a fondly-treasured Washington tradition to take actions likely to be unpopular with large segments of the electorate on a Friday afternoon, when they're least likely to be noticed. A Friday before a holiday weekend is even better.

The commission's action followed last-minute concessions by AT&T; intended, although critics said some tricky legal language may end up costing consumers more in the end.

It's the largest deal ever in U.S. telecommunications history. The new AT&T; will have a market capitalization of over $220 billion -- more than double that of Verizon. It will serve more than 70 million local phone customers in 22 states, as well as 10 million broadband users.

Among other things, the merger gives AT&T; full control of Cingular Wireless, which it had operated as a joint venture with BellSouth. The company has said it will phase out the Cingular brand name, replacing it with the AT&T; brand.

AT&T; also says it will aggressively roll out its new Internet video service in what was previously BellSouth territory. It plans to reach 19 million homes in its own 13-state region by the end of 2008.

The 20-page list of concessions was delivered to the FCC late yesterday (Dec. 28) in the hope that the commission would vote on the merger before the end of the year.

The merger talks had been stonewalled between the 2 Republican and 2 Democratic members of the commission who can vote. Robert McDowell, the fifth FCC commissioner, formally recused himself on the grounds that he once represented competitors of AT&T; as a lobbyist.

Chief among the concessions was a promise to maintain standards of "net neutrality" on AT&T;'s broadband services for 30 months from the date of the merger approval.

Net neutrality, the principle of maintaining free and equal access to all Internet content, was staunchly opposed by AT&T;, which wants to offer high-speed premium services and prioritize delivery of that content at the expense of its existing service.

"[I]n the interest of facilitating the speediest possible approval of the merger by the Commission, Applicants agree to the attached merger commitments, which are significantly more extensive than those submitted on October 13," AT&T; said in its statement.

Other concessions included a promise to reestablish 3,000 jobs in America that had been outsourced to other countries, and an offer of stand-alone DSL for $19.95 a month in BellSouth's territories.

Consumer groups hailed the agreement as a victory that enables low-income neighborhoods to breach the digital divide, as well as for supporters of net neutrality overall.

"This merger endangers long-term competition," said Consumers' Union vice president Gene Kimmelman. "But by making AT&T;'s high-speed Internet service available to consumers for less than $20 a month, the FCC could open the door for consumers to connect low-cost Internet telephone service to broadband and thereby pressure the market to keep delivering lower prices for all telecom services."

Ben Scott, policy director of media watchdog Free Press, agreed.

"Making Net Neutrality a condition of the largest merger in telecommunications history would set an important precedent," he said. "For free speech, democratic participation and economic innovation to thrive online, Net Neutrality must be the law."

Bait And Switch?

However, AT&T; may have pulled a fast one.

In enumerating its net neutrality concession, AT&T; said that, "This commitment also does not apply to AT&T;/BellSouth's Internet Protocol television (IPTV) service."

AT&T;'s push for IPTV is the cornerstone of its new UVerse high-speed Internet project, and the agreement may allow its UVerse rollout to sidestep its own net neutrality guarantee.

Commenters at technology blog TechDirt noted that, "AT&T; promises not to violate network neutrality on a network they never intended to use that way, and carves out permission to use it on their new network, where they had planned all along to set up additional tollbooths."

The AT&T; peace offering comes on the heels of the FCC's decision to ease rules for telecom companies to offer video franchising in communities. The new rules eliminate requirements for companies to "build out" service to all parts of a town or region, and streamlines the approval process.

Critics charged the new rules will empower telecoms like AT&T; to "cherry pick" by selling high-speed broadband and TV services only in the most affluent neighborhoods.

AT&T; reiterated its commitment to deliver high-powered services like UVerse in the concession letter.

"AT&T; is committed to providing, and has expended substantial resources to provide, a broad array of advanced video programming services in the AT&T; in-region territory," the company said.