OMB Rejects FCC Data-Collection Rules

The FCC’s leased-access rules ran into more trouble Thursday.

By John Eggerton -- Broadcasting & Cable, 7/10/2008 3:54:00 PM

The Federal Communications Commission's leased-access rules ran into more trouble Thursday.

Having already been stayed by the Sixth Circuit Court of Appeals, the new rules' information-collection requirements were rejected by the Office of Management and Budget as a violation of the 1980 Paperwork Reduction Act.

The act requires new federal regulations to minimize paperwork or justify it when they don't.

It was a win for Comcast and other cable operators, which argued that the new rules unjustifiably created massive amounts of new paperwork. But it was another blow for leased-access programmers seeking relief from what they said are foot-dragging cable operators and the FCC.

The FCC had proposed that cable operators provide a raft of new data in response to outside requests to lease channels on their systems.

That included an explanation of the channel-requesting process; the "geographic and subscriber levels" of service available; the number, location and time periods available; a rate schedule; a comprehensive accounting of how the rates were calculated; studio rates and costs; and more.

The commission also proposed to decrease the amount of time cable operators had for providing that information to potential leased-access providers from 15 business days to only three.

The FCC requires all but the smallest cable operators to lease capacity to outside programmers.

The OMB concluded that the FCC, in adopting changes to lower leased-access rates:

• Had not demonstrated the need for the reduction from 15 to three days;

• Had not shown that it had taken "reasonable steps to minimize the burden on respondents" (cable operators), which the OMB said would have to hire new staff in order to comply with the information-collection portion of the rulemaking;

• Had not shown how it would protect "proprietary and confidential" information;

• Had not established the need for increasing the paperwork burden; and

• Had not demonstrated that it had taken "reasonable steps" to minimize the burden on cable operators, which, "due to reduced pricing, will be required to hire new staff in order to maintain the capacity to respond to an increased number of inquiries."

Comcast had argued in comments to the OMB that the FCC data-collection requirement was "vastly more information than it reasonably needs" for a "mere 'request for information about leased-access channels.'"

The new rules require operators to provide detailed calculations of rates, including information on how each rate was arrived at according to the FCC's new, lowered rate for leased-access providers.

"Subjecting cable-system operators to a massive array of information-production requirements only to produce a calculation that allows the system operators to charge nothing for the valuable and scarce channel capacity is paperwork for paperwork's sake, the antithesis of practical utility," Comcast wrote to the OMB.

The National Cable & Telecommunications Association, representing large operators, and the American Cable Association, which represents smaller ones, both asked the OMB to reject the rules. The ACA argued that the FCC underestimated the burden on all operators and did not make an effort to reduce the burden on small businesses. The NCTA called it an "unprecedented, ongoing and burdensome information-collection regime."

"No decisions have been made about possible next steps by the commission," FCC spokesman Clyde Ensslin said.

According to a source familiar with the workings of the OMB, the decision can be appealed to the OMB or a majority of the commissioners could overturn it.

The ACA was understandably pleased with the OMB decision: “The majority of ACA’s members are small systems serving small towns of fewer than 5,000 subscribers,” ACA president Matt Polka said in a statement. “These men and women are quintessential small-business owners trying to deploy advanced video, Internet and phone to their customers and their communities with finite resources and precious time to spare. Increasing the amount of time, money and energy required to comply with disproportionate, burdensome information-collection requirements hinders the ability of our member companies to deploy these important services. This order ran contrary to the FCC’s continued efforts to reduce small-business reporting burdens, and the OMB was right to reject it.”