Despite its independent status, Hundt's FCC worked very closely with the White House

by Randolph J. May
Legal Times, June 5, 2000

In his new book, You Say You Want a Revolution—A Story of Information Age Politics, Reed Hundt, chairman of the Federal Communications Commission from 1993 to 1997, recounts that “during a long and famous night” at Woodstock in August 1969, he learned that if Jimi Hendrix could play “The Star Spangled Banner” his way, then Hundt “could rewrite the rules.”

The most important thing we learn from Hundt’s book is that he rewrote the rules that previously counseled that the independent agency remain free from overt White House influence.

Above all, Hundt reveals with unexpected candor the unprecedented degree to which the FCC was politicized under his reign. His tale suggests that serious consideration should be given to placing the agency—if downsized to reflect a reduced regulatory role—in the executive branch. That is where Hundt seems to think it belongs anyway.

Hundt describes in detail how he ran the agency “independently” of Congress while he “synchronized” the FCC’s agenda with White House politics. His boyhood friend, Vice President Al Gore, was the administration’s designated communications policy honcho, and Hundt admits up front that he gladly played the role of Gore’s trusted “lieutenant.” His duty, as he saw it, was “to fulfill Al’s vision for the information highway.”

After recitations ad nauseam of meetings with Gore and other “White House spinners,” Hundt brags that, midway into his term, “my efforts plainly supported the president’s political goal, as crafted by Dick Morris, of enumerating specific differences between his views and those of the Republican Congress.” He then explains how he “orchestrated” a White House summit to pressure television broadcasters to air additional children’s programming, and how, by doing so, “we were helping the President and Vice-President win re-election.”

POLITICAL AGENDA

In addition to the kidvid campaign, Hundt pushed two primary objectives of the White House. First, Hundt was determined to use the authority that Congress delegated to the agency in an ambiguously worded provision of the 1996 Telecommunications Act to initiate a massive new program to wire all of the nation’s schools and libraries for Internet service. And he was equally as determined to use his “public interest” authority under the act to require broadcasters to provide free air time for political candidates.

Hundt achieved his first goal, getting the agency to implement an annual $2.25 billion program, funded by new “universal service charges” on consumers’ telephone bills. Although unable to push through his free-time proposal, he kept the issue alive by working closely with the White House so that it is now being considered in a proceeding initiated by his successor.

Chairman Hundt’s revolutionary yarn might be more amusing than cautionary but for one fundamental fact: He was at the wrong agency to be carrying out such an overtly political agenda, at least as the FCC is currently constituted. Unlike the Departments of Education and Commerce, which are part of the executive branch, the FCC is intended by Congress to be an independent regulatory commission. No more than three of its five members may be from the same party, and the president may not remove the commissioners at will.

In the leading case of Humphrey's Executor v. United States (1935), the Supreme Court held that President Franklin Roosevelt lacked the authority to remove a Federal Trade Commission member without specific cause. In a classic description of the nature of independent regulatory agencies, the Court wrote:

Such a body cannot in any proper sense be characterized as an arm or an eye of the executive. Its duties are performed without executive leave and, in the contemplation of the statute, must be free from executive control. . . . To the extent that it exercises any executive functions—as distinguished from executive power in the constitutional sense—it does so in the discharge and effectuation of its quasi-legislative or quasi-judicial powers, or as an agency of the legislative or judicial department of the government.

This same point has been made directly with regard to the FCC. In ruling on a discovery matter in the AT&T divestiture case in which documents were sought from the FCC on the same basis as executive branch agencies, Judge Harold Greene stated that “both as a conceptual and practical matter, the Federal Communications Commission is free from executive control and not answerable to instructions from the President.” United States v. AT&T (1978).

The theory of the New Deal independent agencies was that commission members would work together in a nonpartisan manner, bringing their expertise and varied experiences to the decision-making process. In the case of the FCC, Congress delegated broad authority to the agency to regulate in “the public interest,” which presumably means something other than “the political interest.”

So much for theory under Hundt’s leadership. While there have been a few instances in the past where the White House has exerted political pressure on pending FCC matters, the agency generally has operated in an environment free from presidential meddling. Both Republican Richard Wiley and Democrat Charles Ferris, who served back-to-back terms as FCC chairmen from 1974 to 1981, told me they never coordinated any substantive agency decisions with the White House, nor received any political pressure to do so.

COZY WITH THE WHITE HOUSE

It’s one thing to be receptive to input from the White House, along with other interested parties, on policy matters. But it’s quite another to give the appearance of coordinating decision making and taking direction. Hundt seems to have crossed the line, at least under the present understanding of the proper role of an independent regulatory agency.

So Hundt’s book is most instructive in a way he would least likely appreciate. It should be another spur to the serious thinking now gathering steam about what a reformed FCC should look like in the future.

Under the leadership of Hundt and his successor, William Kennard, the FCC probably has gone too far in micromanaging competition in various market segments. But as Hundt correctly points out, the 1996 Telecommunications Act is sufficiently ambiguous in key places—such as the program to subsidize the wiring of schools and libraries and the requirements for opening local telephone markets—that the FCC pretty much was left to its own devices. Indeed, Justice Antonin Scalia characterized the act as “a model of ambiguity.” AT&T Corp. v. Iowa Utilities Board (1999).

In any event, the market-opening measures already undertaken by the FCC, coupled with the explosion of new technologies and services made possible by the digital revolution, mean that competition shortly can supplant much of the FCC’s traditional regulatory activity designed to protect consumers.

Therefore, it is not too early for Congress to start thinking about a Telecommunications Deregulation Act that explicitly sunsets outdated regulatory requirements. At the same time, lawmakers should at least should consider transferring what’s left of the agency’s duties to a unit in the executive branch, albeit one in which residual adjudicatory functions would continue to be free from political meddling.

Some FCC activities could even be transferred to existing agencies. For example, is there any reason why the subsidy program to wire the nation’s schools and libraries should not be run out of the Education Department with funds from the general treasury? When the Civil Aeronautics Board and the Interstate Commerce Commission were eliminated after the deregulation of the airline and transportation industries, their few remaining regulatory functions, such as those relating to safety, were transferred to the Department of Transportation.

As much as anything else, You Say You Want a Revolution is Reed Hundt’s justification for why he coordinated his actions so closely with the White House. He may be on to something. Placing what’s left of a slimmed-down FCC in the executive branch at least would place accountability for policy making squarely in the president’s hands.

Randolph J. May is a senior fellow and director of communications policy studies at the Progress & Freedom Foundation in Washington, D.C. The views expressed are his own and do not necessarily reflect the views of the foundation. He may be reached at rmay@pff.org. His column, “Fourth Branch,” appears regularly in Legal Times.

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