Court finds FCC Violated APA continued ...

Page 13 Access Broadband over Power Line Court Decision

In its reconsideration order, after receiving new studies conducted in the United Kingdom, the Commission found that those studies did not support a change to the extrapolation factor in light of the factual disagreements and uncertainty discussed in the initial order. The Commission stated: “No new information has been submitted that would provide a convincing argument for modifying this requirement at this time.” Amendment of Part 15 Regarding New Requirements and Measurement Guidelines for Access Broadband Over Power Line Systems, Mem. Op. and Order, 21 F.C.C.R. 9308, 9317-18 ¶ 26 (2006).

Applying the State Farm doctrine, the majority opinion remands for further explanation from the FCC. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983). Although I recognize that the reasoned decisionmaking requirement of State Farm is sometimes more art than science, more Rorschach than rule of law, I do not agree with the majority opinion that the FCC needs to say more in this case.

Section 706 provides that courts set aside agency rules that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). Arbitrary-and-capricious review under § 706 is “narrow,” and “a court is not to substitute its judgment for that of the agency.” State Farm, 463 U.S. at 43. A reviewing court “may not set aside an agency rule that is rational, based on consideration of the relevant factors, and within the scope of the authority delegated to the agency by the statute.” Id. at 42. We thus must ‘“uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.”’ Id. at 43 (quoting Bowman Transp. Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 (1974)).

In my judgment, the FCC’s explanation in this case suffices. The FCC’s choice of extrapolation factor to estimate interference from broadband over power lines is a highly technical determination committed to the Commission’s expertise and policy discretion. Cf. Mobile Relay Assocs. v. FCC, 457 F.3d 1, 8 (D.C. Cir. 2006); Teledesic LLC v. FCC, 275 F.3d 75, 84 (D.C. Cir. 2001); American Iron & Steel Inst.

v. EPA, 115 F.3d 979, 1004 (D.C. Cir. 1997); MCI Cellular Tel. Co. v. FCC, 738 F.2d 1322, 1333 (D.C. Cir. 1984). In its two orders, the Commission reasonably stated that the evidence submitted by commenters was conflicting, that the new evidence submitted on reconsideration was not sufficiently conclusive to require a change, and that it therefore would continue (for now) to adhere to its long-standing extrapolation factor with respect to broadband-overpower-lines technology. This explanation makes sense. And State Farm does not require a word count; a short explanation can be a reasoned explanation.

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The two issues on which I write separately prompt a broader observation. In appropriate cases or controversies, courts of course must be vigilant in ensuring that agencies adhere to the plain text of statutes imposing substantive and procedural obligations. See, e.g., Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 & n.9 (1984) (Chevron “Step 1”); Vermont Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 558 (1978). But it bears repeating that § 553 of the APA requires only a notice providing a “description of the subjects and issues involved”; time for interested persons to comment; and a “concise general statement” of the rule’s “basis and purpose.” 5 U.S.C. § 553. Courts have incrementally expanded those APA procedural requirements well beyond what the text provides. And courts simultaneously have grown State Farm’s “narrow” § 706 arbitrary-and-capricious review into a far more demanding test. Application of the beefed-up arbitrary-and-capricious test is inevitably if not inherently unpredictable – so much so that, on occasion, the courts’ arbitrary-and-capricious review itself appears arbitrary and capricious.

Over time, those twin lines of decisions have gradually transformed rulemaking – whether regulatory or deregulatory rulemaking – from the simple and speedy practice contemplated by the APA into a laborious, seemingly never-ending process. The judicially created obstacle course can hinder Executive Branch agencies from rapidly and effectively responding to changing or emerging issues within their authority, such as consumer access to broadband, or effectuating policy or philosophical changes in the Executive’s approach to the subject matter at hand. The trend has not been good as a jurisprudential matter, and it continues to have significant practical consequences for the operation of the Federal Government and those affected by federal regulation and deregulation.

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