Pai Starts Rolling Back Wheeler Media, Telecom Items

Under new Chairman Ajit Pai, the FCC has begun rescinding decisions made in the waning days of Tom Wheeler's Chairmanship (and one older decision). The flurry of action involving bureau decisions being reversed or rescinded includes zero ratings probes, Lifeline Broadband Provider designations, guidelines for the processing of broadcasters' joint sales and shared services agreements, and political ad disclosure complaints.

In revoking what he called "Midnight Regulations," Pai said: "These last-minute actions, which did not enjoy the support of the majority of Commissioners at the time they were taken, should not bind us going forward. Accordingly, they are being revoked."

The agency set aside a "Zero Rating" report that had been issued under the previous administration criticizing AT&T and Verizon for allegedly favoring their own mobile video services over competitors by allowing customers to watch their video services on mobile phones without counting against monthly data caps. The FCC said that it's closing Wireless Telecommunications Bureau investigations into AT&T Mobility, T-Mobile, and Verizon Wireless which could have eventually resulted in further sanctions or limitations for alleged Net Neutrality and 5G security rules violations. "The Bureau now sets aside and rescinds the Policy Review Report and any and all guidance, determinations, and conclusions contained therein, including the document's draft framework. The Policy Review Report will have no legal or other effect or meaning going forward," the agency said.

Chairman Pai said: "Free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace." In the future, the FCC "will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings."

For its part, the Wireline Competition Bureau reconsidered earlier orders and revoked the Lifeline Broadband Provider designation for nine entities - Spot On Networks LLC, Boomerang Wireless LLC, KonaTel Inc., STS Media, Inc., Applied Research Designs, Inc., Kajeet Inc., Liberty Cablevision of Puerto Rico, LLC, Northland Cable Television, Inc., and Wabash Independent Networks, Inc. The Bureau found that reconsideration of the decisions released in December and in January would promote program integrity "by providing the Bureau with additional time to consider measures that might be necessary to prevent further waste, fraud, and abuse in the Lifeline program." The move returns their petitions for Lifeline designation to pending status before the bureau and removes them from streamlined treatment.

Commissioner Mignon Clyburn, however, the lone Democrat on the Commission - whose party was in the majority when the items being revoked on Friday were initially issued - especially disagreed with the Lifeline action, saying it widens the digital divide. "By eliminating the designations of nine entities to provide Lifeline broadband service, the Bureau has substantially undermined businesses who had begun relying on those designations. These providers include a minority-owned business, a provider enabling students to complete their homework online, and others serving Tribal lands."

In connection with media regulation (and in the one action that revoked an older decision), in a terse Notice the agency said it rescinds "in its entirety and effective immediately," guidance provided in a March 12, 2014 notice titled "Processing of Broadcast Television Applications Proposing Sharing Arrangements and Contingent Interests." That 2014 guidance has applied greatly heightened scrutiny to any proposed transactions involving sharing arrangements.

NAB was pleased, noting that Chairman Pai is "eliminating unlawful and arbitrary processing guidelines governing broadcast joint sales and shared service agreements." The regulations "punished smaller broadcasters trying to conserve resources to reinvest in localism and high quality programming," according to the broadcast trade association. Some brokers believe this is a first step towards jumpstarting broadcast M&A.

Finally, the Media Bureau set aside its January decisions concerning 12 stations involving political ad disclosures, saying the matters are more appropriately addressed at the full Commission level. The complaints now return to pending status.

NAB called the earlier order "unlawful" and said "the appropriate place for consideration of new rules and regulations is at the Commission level and not through orders applying to individual parties."

Friday's actions suggest that the comraderie displayed in the first Open Commission Meeting under Pai last week may be short-lived. Commissioner Clyburn said Friday was apparently "take out the trash day."

"In the past, then-Commissioner Pai was critical of the agency majority for not providing sufficient reasoning behind its decisions," said Clyburn. "It is a basic principle of administrative procedure that actions must be accompanied by reasons for that action, else that action is unlawful. Yet that is exactly what multiple Bureaus have done today."

The Commissioner said that her office asked for more than the allotted two days to review the latest decisions but did not receive extra time - "it is disappointing to see this Chairman engage in the same actions for which he criticized the prior Chairman."

The FCC's orders rolling back certain actions from the prior Commission are happening at a blistering pace, so stay tuned to CommLawBlog as we monitor the changes for you.