Notice-and-comment rulemaking has been lauded as “one of the greatest inventions of modern government.” Kenneth Culp Davis, Administrative Law Treatise § 6.15 (1978), at 283. Such high praise is warranted. The basic procedure outlined in the Administrative Procedure Act (APA) is quite streamlined and designed to ensure fairness and transparency. An agency begins by issuing a notice of proposed rulemaking (NPRM) that seeks comment on a rule the agency intends to adopt. The agency reviews the comments, and then adopts a final rule. Provided the final rule is a logical outgrowth of the proposed rule, there is no procedural violation of the APA because all interested parties had an opportunity to comment on the rule.
However, a problematic trend developing at the Federal Communications Commission (FCC) threatens to undermine this framework. FCC has been short-circuiting the APA’s rulemaking scheme by using “fact sheets” as substitutes for NPRMs. These days, FCC will often begin a rulemaking proceeding by issuing an NPRM that looks more like a Notice of Inquiry (NOI). Unlike an NPRM, an NOI solicits input on possible approaches without proposing any rules. More often than not, FCC will ask broad questions in its NPRMs that are more characteristic of an NOI, such as “How should we regulate the internet?” or “How should we protect internet privacy?” Commenters do their best to answer those questions, but they cannot possibly offer informed comments because FCC has not revealed what it intends to do.
After reviewing the comments, the Chairman will then issue a three- to four-page fact sheet, announcing that he has proposed new rules to his fellow FCC commissioners. A fact sheet is really nothing more than a public-relations statement for the media. It is not and cannot be a substitute for an NPRM. It fails to give the public enough detail to know what the final rules will be. And even if it did, FCC does not provide enough time for public comment. Shortly after releasing a fact sheet, the other commissioners vote on the Chairman’s new rules, but persons outside FCC have no opportunity to see the rules until after FCC releases an order adopting the final rules.
At first blush, the Chairman’s fact sheets may seem well-intentioned, but a fact sheet is really a wolf in sheep’s clothing. FCC has demonstrated its willingness to use a fact sheet to its advantage in court.
The natural reaction to a fact sheet proposing new rules is to voice opposition. For example, a party might write a letter to FCC complaining about the lack of notice and comment and arguing that the new rules are arbitrary and capricious. Indeed, litigants are required to exhaust their arguments at FCC before they go to court. See 47 U.S.C. § 405. If a party fails to challenge the propriety of new rules proposed in a fact sheet, it might be barred from later challenging the final rules in court.
On the other hand, if a party does complain about the new rules in the fact sheet, this, too, plays right into FCC’s hands. If a litigant argues in court that FCC violated the APA by failing to adequately notice the rules in the NPRM, FCC’s likely rejoinder will be that any error was harmless.1 It will argue that the litigant was not prejudiced by the lack of proper notice in the NPRM because the party’s complaints about the fact sheet show it had actual notice of the final rules.
This heads-I-win-tails-you-lose proposition is not merely academic. The U.S. Court of Appeals for the DC Circuit allowed FCC to skirt the APA’s requirements in its opinion reviewing FCC’s “Open Internet Order.” United States Telecom Ass’n v. FCC, 825 F.3d 674 (D.C. Cir. 2016). In the Open Internet proceeding, FCC originally proposed to adopt net neutrality rules under § 706 of the Telecommunications Act. FCC later issued a fact sheet, a few weeks before the commissioners’ vote, making clear that it was now focused on Title II of the Communications Act as a source of legal authority.2
In response, multiple written complaints were filed with FCC about the reclassification of mobile broadband internet access service under Title II. FCC argued—and the court agreed—that any APA violation was harmless because the petitioners had actual notice of what FCC was planning to do, because they had complained about it on the record after FCC released the fact sheet. United States Telecom Ass’n, 825 F.3d at 725-26.
The net neutrality fact sheet is no outlier. Last month, the Chairman issued another fact sheet in the Commission’s controversial internet-privacy proceeding.3 This fact sheet offered a four-page summary of new rules, but it did not indicate how FCC intended to resolve more than five-hundred questions it asked in the NPRM, nor did it contain the text of the final rules. Undoubtedly, many surprises lurk in the final internet privacy rules recently released by FCC.4
Perhaps it should not be surprising that, in an age of rapid technological innovation, FCC would look for ways to avoid procedures that might stand in the way of expanding its mission. Vigilance is required. Because FCC is an independent agency that is not politically accountable, it is imperative that the agency follow congressionally mandated procedures that keep the public informed about—and provide a meaningful opportunity to comment on—what FCC proposes to do.
In the coming months, new leadership may take the reins at FCC. The newly constituted FCC would be well-served by reforming the way it conducts business. A new Chair could start by once more issuing NPRMs that tell the public exactly what the agency intends to do and where the agency intends to go with the proceeding. The entire rulemaking process becomes a waste of time if FCC hides the ball at the outset by not issuing a proper NPRM, and then uses a fact sheet as a substitute for an NPRM at the close of the proceeding. FCC should embrace the opportunity to chart a new course that adheres more faithfully to the APA’s twin promises of fairness and transparency.
- 5 U.S.C. § 706 (explaining that in judicial review of agency action “due account shall be taken of the rule of prejudicial error”).
- FCC, Fact Sheet: Chairman Wheeler Proposes Rules for Protecting the Open Internet (released Feb 4, 2015), http://transition.fcc.gov/Daily_Releases/Daily_Business/2015/db0204/DOC-331869A1.pdf.
- FCC, Fact Sheet: Chairman Wheeler’s Proposal to Give Broadband Consumers Increased Choice Over their Personal Information (released Oct. 6, 2016), https://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db1006/DOC-341633A1.pdf.
-  Protecting the Privacy of Customers of Broadband and Other Telecommunications Services, WC Docket No. 16-106, FCC 16-148 (released Nov. 2, 2016), http://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db1103/FCC-16-148A1.pdf.