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 The Honorable John McCain, Chairman he Honorable Ernest Hollings, Ranking Minority Member U.S. Senate Committee on Commerce, Science, and Transportation Washington, DC 20510 Dear Senators McCain and Hollings: On behalf of TeleTruth, a nationwide alliance of broadband and telecom customers, I am writing to urge you to hold immediate hearings to examine the FCC’s failure to perform their legal obligations under the Regulatory Flexibility Act (RFA) (as amended), as well as President Bush's Executive Order 13272 of August 14, 2002 – and to take appropriate actions to remedy the FCC’s consistent and willful failures to follow the terms, conditions and spirit of the RFA and the Executive Order. Under the Regulatory Flexibility Act, the FCC (and other independent agencies in their areas of competence) is legally required to examine how any proposed law will affect small telecom, broadband, or media companies, as well as the small businesses that will use any of these services. It is also required to have these various companies and users be participate in the entire process of rule making. Unfortunately, the entire process used by the FCC today, for ALL of its current rulemakings, from its broadband and telecom proceedings, to the recent media ownership proceedings, is seriously flawed and needs immediate investigation. In addition, President George W. Bush signed Executive Order 13272 on August 14, 2002, that requires federal agencies to implement policies protecting small businesses when drafting and promulgating rules and regulations. It authorizes the Small Business Administration’s Office of Advocacy to comment on proposed rules to the OMB and requires agencies to give every appropriate consideration to the Advocacy Office’s comments on drafts. Congress enacted the RFA to ensure that agency rules and regulations took into consideration the interests of small firms to innovate and compete while complying with a proposed rule or regulation. The Act’s objectives are to increase agency awareness and understanding of a proposal’s impact on small firms, require an explanation of findings, increase transparency, and to encourage agencies to use flexibility and provide relief to small businesses where appropriate and feasible. While the Commission conducted an Initial Regulatory Flexibility Analysis(IRFA) that asserted that there was no impact on small businesses from the proposed rulemaking, substantively and procedurally its IFRA was deeply flawed and deficient. It employs stock boilerplate language and analysis and avoids Congress’s intentions underlying enactment of the law. The record will show almost no significant participation by small businesses nor a serious, substantive consideration of alternatives with small business interests in mind. Moreover, in an April 9, 2003, to Chairman Michael Powell of the FCC, the SBA Office of Advocacy provided a detailed argument as to why the FCC’s rulemaking procedures are seriously deficient as they relate to small businesses. The letter recommended a further notice of proposed rulemaking (NPRM) and urged a supplemental initial regulatory flexibility analysis to comply with the RFA. Teletruth strongly supports the SBA in this matter and concurs with Advocacy’s recommendations. Regrettably, identical substantive and procedural flaws plagued the FCC’s Broadband proceedings, in which the FCC failed to comply with the RFA’s requirements or the terms of Executive Order 13272. In 2002, Teletruth filed Comments in 6 of the Broadband proceedings, clearly demonstrating that the FCC had failed in at least 13 different ways to not fulfill the basic obligations under the Regulatory Flexibility Act's requirements. This list included its failure to create a detailed impact study on how their rules would affect the thousands of Internet Service Providers (ISPs), Competitive local phone companies, (CLECs) not to mention the millions of small business customers of these companies. The FCC also had neglected to give any alternatives to these companies if the rules went through, failed to do an outreach to these companies for comments on how the proposed rules would affect their business, or how would impact their customers. The Small Business Administration’s Office of Advocacy independently commented on these telecom and broadband issues as well, in both the Triennial Review as well as the Wireline proceeding (02-33). They found that the FCC has not taken into account the impact their rules will have on the thousands of small ISPs and their actions could "eliminate competition from small businesses and removing consumer choice." Important issues of localism and diversity will be critically affected by MB Dkt. No. 02-277. Similarly, critical issues of innovation, choice and service quality were ignored earlier this year by the Commission in it’s broadband proceedings.. We urge vigorous and prompt action by the Senate Commerce Committee to ensure that the FCC complies with the RFA and Executive Order in the instant case and in future rulemakings. Yours Truly, The members of Teletruth, http://www.teletruth.org |