The Executive Branch’s Growing Disrespect For Administrative Due Process – Guest Essayist: Lawrence J. Spiwak

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Given the pervasiveness of regulation over the American economy, ensuring procedural due process for all Americans wishing to participate in both adjudications and rulemakings before administrative agencies is no easy task.  Indeed, unlike Congress—which is a political institution specifically designed by the Founding Fathers to promulgate laws based on the will of the people—an administrative agency, as a creature of Congress, is specifically designed to be apolitical so that it can implement the will of Congress by following its particular governing statute (e.g., the Federal Communications Commission and Communications Act; the Federal Energy Regulatory Commission and the Federal Power Act).  For this reason, we have the Administrative Procedure Act, which requires, among other things, administrative agencies to provide interested parties with a meaningful (and orderly) opportunity for notice and comment regarding agency decisionmaking, and to disclose any private meetings with outside parties which may have a material impact on this decisionmaking (what are known as “ex parte” rules).  By establishing such procedural safeguards, an administrative agency can (ideally) make dispassionate decisions based on the law, economics and the facts before it, rather than succumb to outside political pressure.

Recently, however, there is a growing and disturbing trend in the way regulatory policy is practiced in Washington.  According to the Wall Street Journal, given Congress’ increasing deadlock, we have seen a dramatic increase by advocacy groups on both sides of the aisle to flood administrative agencies with perfunctory “robo-comments” to express the vox populi on particular policy items at hand.  While I certainly do not want to be accused of denying anybody’s free speech rights, as a former lawyer in the general counsel’s office of two federal agencies, experience has taught me that these “robo-comments” generally offer nothing of substance, which doesn’t help a regulator write a legally-defensible order on highly-technical issues that will be upheld by a reviewing court.  However, as the regulatory process becomes more contentious, and Congress more impotent, administrative agencies (who are headed by political appointees) are nonetheless increasingly giving these “robo-comments” probative weight.  The problem with this growing practice is that the arrival of thousands (or in the case of the FCC’s recent fight over net neutrality millions) of robo-comments does not constitute the proverbial “weight of the evidence.”  All these robo-comments amount to is administrative law vigilantism.

While the growing use of robo-comments is problematic, what is more disappointing is that the Obama Administration is encouraging such populist “clictivism” as a substitute for reasoned analysis.  In fact, rather than provide substantive legal and economic contributions to regulatory proceedings, President Obama has become the “Clictivist in Chief.”  In so doing, the President is, in effect, eroding both the rule of law and the confidence in the government institutions he swore to protect.

Let me provide just two examples:

In 2012, after a lengthy administrative process (with full opportunities for notice and comment), the Librarian of Congress found that that a customer’s unlocking of a mobile handset without the consent of the wireless carrier is unlawful in that it violates provisions of the Digital Millennium Copyright Act.  The Librarian found that:

 

with respect to new wireless handsets, there are ample alternatives to circumvention.  That is, the marketplace has evolved such that there is now a wide array of unlocked phone options available to consumers. While it is true that not every wireless device is available unlocked, and wireless carriers’ unlocking polices are not free from all restrictions, the record clearly demonstrates that there is a wide range of alternatives from which consumers may choose in order to obtain an unlocked wireless phone.  (77 Fed Reg. 65265) (Emphasis in original.)

 

However, rather than support the Librarian’s decision, the White House chose instead to criticize the Librarian’s handing of the case and publicly promised to find ways to undermine the Librarian’s factual findings.  As you can’t fight City Hall forever, the wireless carriers eventually capitulated and instituted a “voluntary” program to promote handset unlocking.   Unfortunately, such a decision did not bode well for American consumers:  as we at the Phoenix Center predicted in a published paper in 2007, by breaking the “complementarity” between the handset and the service, wireless carriers have all but abandoned the long-standing practice to provide consumers with subsidized handsets, resulting in slower diffusion of new technology, diminished innovation in mobile handsets, and, most egregiously, higher handset prices.

But while as bad as the Administration’s willingness to attack a fair and open proceeding before the Library of Congress was, nothing compares to the Administration’s conduct during this year’s hotly debated net neutrality fight.  As is well-documented by now, last summer President Obama took his eyes off wars in the Middle East and the Ebola virus crisis to weigh in on net neutrality, issuing a statement (accompanied by a short video) where he “asked” (because he cannot order) the Federal Communications Commission (FCC) to reclassify “consumer broadband access” as a Title II common carrier telecommunications service.  In so doing, President Obama advised the FCC to reverse nearly 20 years of bipartisan policy to apply a “light touch” to the Internet.  Significantly, the White House did not try to engage substantively in the debate (which is not surprising, given that the President’s statement was replete with technical errors on the facts, economics and law), but instead chose to engage in political sophistry and encouraged agressive “clicktivism” against the FCC (and, by extension, create an environment where progressive activists believed it acceptable to stalk FCC Chairman Tom Wheeler at his home) to put political pressure on the Commission to regulate the Internet.  And guess what?  The President’s political pressure worked, and the FCC has now subjected the Internet to legacy regulations designed for the old “Ma Bell” telephone monopoly.

In sum, complex regulatory policy should not be made by a “popularity contest” of who filed the most robo-comments, but by a careful and dispassionate examination of law, economics, and the record presented before the agency.  It is a pity that the President of the United States, as our nation’s chief law enforcement officer, does not appear to respect this basic principle.

Lawrence J. Spiwak is the President of the Phoenix Center for Advanced Legal & Economic Public Policy Studies (www.phoenix-center.org), a non-profit 501(c)(3) research organization that studies broad public-policy issues related to governance, social and economic conditions, with a particular emphasis on the law and economics of the digital age.

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