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"APA is the principal law governing how agencies make rules.9 The law prescribes uniform standards for rulemaking, requires agencies to inform the public about their rules, and provides opportunities for public participation in the rulemaking process. Most federal rules are promulgated using the APA-established informal rulemaking process, also known as "notice and comment" rulemaking.10 APA outlines a multistep process to initiate and develop rules and includes provisions for parties to challenge them, which FCC must follow. Many steps require agencies to provide public notice of proposed or final actions as well as provide a period for interested parties to comment on the notices-hence the "notice and comment" label.11 APA does not generally address time frames for informal rulemaking actions, limits on contacts between agency officials and stakeholders, or requirements for "closing" dockets." - FCC Should Take Steps to Ensure Equal Access to Rulemaking Information, GAO-07-1046, p. 8 (Sept 2007)

APA: Govt Wide Procedure

Rulemaking ad agency procedures are governed by the Administrative Procedures Act, 5 USC s 500 et seq. Key sections are § 552. Public information; agency rules, opinions, orders, records, and proceedings; § 552a. Records about individuals; § 552b. Open meetings;
§ 553. Rule making. Most agencies will have implemented this law with their own regulations detailing how they as an agency comply. APA. APA.

Two Different Regulatory Functions: Legislative (rules) and judicial (orders)

Rule: "the whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency." 5 USC s 551(4)
Order: "the whole or a part of a final disposition whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing." 5 USC s 551(6).

Notice and Comment

Required any time agency is making a policy decision
- 5 U.S.C. § 553(b)(3).
- “Since the public is generally entitled to submit their views and relevant data on any proposals, the notice must be sufficient to fairly apprise interested parties of the issues involved, but it need not specify every precise proposal which [the agency] may ultimately adopt as a rule.” Action for Children’s Television v. FCC, 564 F.2d 458, 470 (D.C. Cir. 1977)
- Not required for administrative decisions
How does the rulemaking get started?
- Petition from public
- FCC acts pursuant to its own motion
  - informal industry contacts
  - numerous complaints
  - notice of inquiry
- Legislative (Congress) mandate
  - Biennial review pursuant to statutory requirement
  - New law, the implementation of which must be created
- Proceedings
  - Petition for a declaratory ruling
    - Petition from public asking for clarification of existing policy
  - Notice of Inquiry
    - Agency asks questions without giving notice of tentative conclusions. Because of this, agency cannot come to a final decision but must first give notice of tentative conclusion.
  - Notice of proposed rulemaking
    - Agency gives notice of tentative conclusion on policy issue and invites comment. This can result in a final determination but only on the subject matter that the notice concerns.
  - How to Tell Your NOIs from Your NPRMs [ text version | WordPerfect version

How Notice and Comment Process Works
- Notice Publish notice in the Federal Register describing agency's proposal
  - Notice may also be given on agency website and agency publication (the FCC produces the daily publication "Daily Digest". Other agencies simply use occasional press releases)
- Public is given an opportunity to comment
  - Anyone can comment
  - Comments and replies due by date specific
  - Look for the ability to comment online at the agency's website
  - You need the proceeding number (docket number)
    - FCC Wireless Bureau How to File Comments with the FCC
    - Now It's Your Turn: How to Comment [ text version | WordPerfect version ]
    - File Comments with the FCC's Electronic Comment Filing System
    - FCC Search for Filed Comments
  - Comment Style Guide
    - Be succinct
    - Be polite and courteous
    - Answer the question asked - that is the scope of the proceeding
    - Give an executive summary
    - Assume the reader is unfamiliar with what you are talking about
    - Provide as much support (evidence) as possible, but unsupported statements, allegations, innuendos, accusations, and pontifications are all permissible
    - State exactly what it is you are asking for
    - The proceeding is an open record. Everyone can see what you say; you can see what everyone else says.
      - Subject to the Freedom of Information Act
    - Do not forget to visit the agency in person
  - After comment deadline, further input may be provided through ex parte presentations. Whether ex parte's will be permitted is agency and proceeding specific.
    - FCC permits ex parte presentations
      - "any presentation which: (1) if written, is not served on the parties to the proceeding; or (2) if oral, is made without advance notice to the parties and without opportunity for them to be present.
      - A presentation is any communication directed to the merits or outcome of a proceeding.
      - FCC Rulemakings are "permit but disclose"
      - FCC Extensive use of the ex parte process in rulemakings
        
        FCC's Ex parte Rules
    - During "Sunshine period" presentations are prohibited
      - Sunshine Act : Open Meetings 5 USC 552b
      - Commissioners (those agencies that are structured with commissioners) can only meet to discuss the outcome in a public meeting for which a sunshine notice has been given
- Comments are reviewed by agency
  - All comments read
  - Agency's final decision must reflect consideration of these comments
  - Agency must give a rational response to all arguments
  - (Agency's love consensus)
Narrow exceptions to notice & comment
- Interpretative rules, policy statements
- Procedural rules
- Good cause

Adoption of Rules

Commissions vote on order adopting rule
Order explains why rules adopted and why other suggestions were rejected
- Rational explanation must be provided
  - Agency provided reason
    - Our evaluation of the agency's reasons for its change in policy is confined to the reasons articulated by the agency itself. See State Farm, 463 U.S. at 50 ("[C]ourts may not accept appellate counsel's post hoc rationalizations for agency action. It is well-established that an agency's action must be upheld, if at all, on the basis articulated by the agency itself." (internal citation omitted)); Yale-New Haven Hosp., 470 F.3d at 81 ("Generally speaking, after-the-fact rationalization for agency action is disfavored."). -- Fox v FCC, Docket No 06-1760-ag, slip p. 23 (2nd Cir. June 4, 2007)
Rules are published and companies are generally given at least 30 days to comply

Recourse

Upset parties may petition for reconsideration or file for court review
- petitioners’ burden is to show that the Order is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” see 5 U.S.C. § 706(2)(A). [Nuvio Slip at 7, Sec. II]
Court Review
- Agency decisions can be appealed
- Agency is considered expert, entitled to deference (this is known as the Chevron Doctrine)
  - Supreme Court
    - In Chevron, this Court held that ambiguities in statutes within an agency’s jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps, the Court explained, involves difficult policy choices that agencies are better equipped to make than courts. 467 U. S., at 865– 866. If a statute is ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a federal court to accept the agency’s construction of the statute, even if the agency’s reading differs from what the court believes is the best statutory interpretation. Id., at 843–844, and n. 11. -- NCTA v. BrandX, No. 04-277, 545 U.S. 8, Slip at (S.Ct. June 27, 2005)
    - Chevron established a familiar two-step procedure for evaluating whether an agency’s interpretation of a statute is lawful. At the first step, we ask whether the statute’s plain terms “directly addres[s] the precise question at issue.” 467 U. S., at 843. If the statute is ambiguous on the point, we defer at step two to the agency’s interpretation so long as the construction is “a reasonable policy choice for the agency to make.” Id., at 845. The Commission’s interpretation is permissible at both steps. -- NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 14-15 (S.Ct. June 27, 2005)
    - Some of the respondents dispute this conclusion, on the ground that the Commission’s interpretation is inconsistent with its past practice. We reject this argument. Agency inconsistency is not a basis for declining to analyze the agency’s interpretation under the Chevron framework. Unexplained inconsistency is, at most, a reason for holding an interpretation to be an arbitrary and capricious change from agency practice under the Administrative Procedure Act. See Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U. S. 29, 46–57 (1983). For if the agency adequately explains the reasons for a reversal of policy, “change is not invalidating, since the whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency.” Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735, 742 (1996); see also Rust v. Sullivan, 500 U. S. 173, 186–187 (1991); Barnhart v. Walton, 535 U. S. 212, 226 (2002) (SCALIA, J., concurring in part and concurring in judgment). “An initial agency interpretation is not instantly carved in stone. On the contrary, the agency . . . must consider varying interpretations and the wisdom of its policy on a continuing basis,” Chevron, supra, at 863– 864, for example, in response to changed factual circumstances, or a change in administrations, see State Farm, supra, at 59 (REHNQUIST, J., concurring in part and dissenting in part). That is no doubt why in Chevron itself, this Court deferred to an agency interpretation that was a recent reversal of agency policy. See 467 U. S., at 857– 858. We therefore have no difficulty concluding that Chevron applies. -- NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 9-10 (S.Ct. June 27, 2005)
    - A court’s prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion. This principle follows from Chevron itself. Chevron established a “presumption that Congress, when it left ambiguity in a statute meant for implementation by an agency, understood that the ambiguity would be resolved, first and foremost, by the agency, and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows.” Smiley, supra, at 740–741. Yet allowing a judicial precedent to foreclose an agency from interpreting an ambiguous statute, as the Court of Appeals assumed it could, would allow a court’s interpretation to override an agency’s. Chevron’s premise is that it is for agencies, not courts, to fill statutory gaps. See 467 U. S., at 843–844, and n. 11. The better rule is to hold judicial interpretations contained in precedents to the same demanding Chevron step one standard that applies if the court is reviewing the agency’s construction on a blank slate: Only a judicial precedent holding that the statute unambiguously forecloses the agency’s interpretation, and therefore contains no gap for the agency to fill, displaces a conflicting agency construction.
      A contrary rule would produce anomalous results. It would mean that whether an agency’s interpretation of an ambiguous statute is entitled to Chevron deference would turn on the order in which the interpretations issue: If the court’s construction came first, its construction would prevail, whereas if the agency’s came first, the agency’s construction would command Chevron deference. Yet whether Congress has delegated to an agency the authority
      to interpret a statute does not depend on the order in which the judicial and administrative constructions occur. The Court of Appeals’ rule, moreover, would “lead to the ossification of large portions of our statutory law,” Mead, supra, at 247 (SCALIA, J., dissenting), by precluding agencies from revising unwise judicial constructions of ambiguous statutes. Neither Chevron nor the doctrine of stare decisis requires these haphazard results. -- NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 11 (S.Ct. June 27, 2005)
  - Circuit Court
    - Normally, when we review an agency's interpretation of the statute it is charged with administering, we apply the two step formula set forth by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The reviewing court must look first to the language of the statute: "If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-43. If the statute is silent or ambiguous, "the question for the court is whether the agency's answer is based on a permissible construction of the statute." Id. at 843. Where the agency's interpretation of the statute is reasonable, the court must defer. Id. -- BrandX v FCC, Sec. II, 9th Cir 10/6/2003 reversed
    - In addition to the obvious exceptions to this rule, see, e.g., In re Watts, 298 F.3d 1077, 1084 (9th Cir. 2002) (O'Scannlain, J., concurring) ("We need not convene the en banc court when the Supreme Court reverses us directly. Nor must we do so when that Court, in reviewing a case from another circuit, knocks the props out from under one of our decisions."), our circuit has provided for an exception where our precedent conflicts with a subsequent agency interpretation. In Mesa Verde Construction Co. v. Northern California District Council of Laborers, 861 F.2d 1124 (9th Cir. 1988) (en banc), we held that "if a panel finds that an [agency] interpretation of [its statute] is reasonable and consistent with the law[ ], the panel may adopt that Interpretation even if circuit precedent is to the contrary." Id. at 1136. We immediately qualified this holding by stating that the earlier panel decision may be disregarded in favor of the agency interpretation "only where the precedent constituted deferential review of [agency] decision making." Id. "If the precedent held either that the [agency] decision was unreasonable or the only possible interpretation of the statute," then the prior court's construction trumps the agency's interpretation. Id. -- BrandX v FCC, Sec. II.C.[2], 9th Cir 10/6/2003 reversed
    - Int’l Ladies’ Garment Workers’ Union v. Donovan, 722 F.2d 795, 821 (D.C. Cir. 1983) (“Predictive judgments about areas that are within the agency’s field of discretion and expertise” are entitled to “particularly deferential” treatment.)
    - PPL Montana, LLC v. Surface Transp. Bd., 437 F.3d 1240, 1247 (D.C. Cir. 2006) (“[T]he [agency’s] attempt to distinguish its prior cases, while terse, is entitled to deference.” (quoting Inland Lakes Mgmt., Inc. v. NLRB, 987 F.2d 799, 805 (D.C. Cir.
      1993))
- Decisions can be reviewed on following standards
  - APA: "arbitrary and capricious" standard (the rule must be rational)
    - "Courts will set aside agency decisions found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). As the Supreme Court has explained: “The scope of review under the ‘arbitrary and capricious’ standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Agency action is arbitrary and capricious “if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Id. Reviewing courts “may not supply a reasoned basis for the agency’s action that the agency itself has not given.” Id. (quoting SEC v. Chenery Corp., 332 U.S. 194, 196 (1947))." -- Fox v FCC, Docket No 06-1760-ag, slip 18-19 (2nd Cir. June 4, 2007)
  - Legal: Agency must have legal authority for its action
  - Constitutional: the regulatory initiative must not violate the Constitution

Enforcement

After creation of rules and policy comes agency enforcement.

Where to Begin the Paper Chase [ text version | WordPerfect version]
Benton Foundation's "Guide to the Paper Chase at the Federal Communications Commission"
Making The FCC Your Business, ISP Planet 06/01/01
ABA

US FDA APA
OMB Watch APA

Books

Alfred C. Aman, Jr. & William T. Mayton, Hornbook on Administrative Law, West Group (1993)

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