Moving to “Regulatory Standard Time” for rapidly developing technology

Every year in late October, the nation’s attention turns to the ritual of adjusting our clocks to usher out Daylight Savings Time in favor of Standard Time. It focuses our collective attention on the importance that time plays in organizing our lives. This year, let us also use that transitional ritual as a lens for focusing on the importance that time plays in the federal regulatory process. Now is an opportune moment to consider adopting a “Regulatory Standard Time.”

“Too soon” and “too long” seem to be the catchphrases that capture the frustration of many stakeholders in the actions of independent regulatory agencies. A case in point is the Federal Communications Commission (FCC), charged with making critical digital economy decisions against a backdrop of rapid technological and marketplace developments.

To its credit, the FCC in recent years has become more attuned to these developments through annual fact-gathering about the state of broadband development, multichannel video program distribution, and other areas that shed light on how the interests of consumers and competition are being served. Having relevant data at hand helps to bolster the agency’s expertise and promotes more rational decision making.

But at best, the FCC only is capable of taking snapshots of markets that require full-motion video recording. This can lead to initiating premature regulatory action that is ex-ante by design— broad new rules aimed at preventing harms that may not be as prevalent as envisioned.

“At best, the FCC only is capable of taking snapshots of markets that require full-motion video recording.”

The FCC already has an effective regulatory tool to help address this real-world problem. A procedure known as a Notice of Inquiry, created by Congress in the Administrative Procedure Act almost 70 years ago, allows broad questions to be asked for public input at an early stage, without any firm direction in mind regarding how the agency might choose to develop regulations later on.

By opening a proceeding that inquires first in an open-minded manner, the FCC and its counterparts can impose on itself an effective procedural mechanism to not jump into the regulatory waters prematurely. The Notice of Inquiry may add some time to the overall administrative process that includes a subsequent Notice of Proposed Rulemaking, but its benefits have been proven for many decades. It is a powerful way to gather even better information and insights than those undertaken on an annual or semi-annual basis. And it can function like a regulatory Hippocratic Oath—first, do no harm.

At the other end of the regulatory timeline are rules that are crafted as permanent solutions to problems that may not require a here-to-eternity approach. Sometimes, Congress has required the FCC to review regulations after a period of time to determine if it still makes sense to enforce them. The FCC’s decision last year to eliminate the program access rules for cable and satellite distributors illustrates how useful it is to have a second look to determine if the regulatory rationale remains. If not, the agency can move to a more tailored case-by-case approach (as the FCC did in modifying the program access rules) or even eliminate the rules entirely.

Even absent a legislative mandate, the FCC has full authority to act on its own in crafting sunset clauses in new regulations that it promulgates. It can specify a shelf life for rules that correspond to the pace of technology and marketplace changes. Somewhere in the 3-5 year range would be a good starting point, granting the agency sufficient time to evaluate the efficacy of its regulations.

These two important modifications to regulatory practice—developing more Notices of Inquiry and attaching reconsideration date requirements for new rules—can be implemented immediately. Hopefully, by the time we are instructed to “spring ahead” again in late March, the notion of Regulatory Standard Time will have begun to take hold.