Independent Agencies Really Aren't

Net neutrality is a political issue, so the Federal Communications Commission can't be above politics.


Photographer: Pete Marovich/Bloomberg

A Senate committee report has charged that U.S. President Barack Obama “bowled over” the independent Federal Communications Commission when he urged it to regulate net neutrality last year. An influential commentator went so far as to say that the White House “broke the law.” 

But a clear understanding of executive power and the relevant law indicates that these claims are misguided. It’s perfectly appropriate for the president to try to influence an executive agency, even one that’s independent in the sense that its leadership can only be removed for good cause. Nothing in the Senate report even vaguely suggests that Obama or his aides broke any law.

To understand the basis for the criticism in the first place, you have to begin with the idea of the “independent” administrative agency. All federal agencies are part of the executive branch. As a matter of constitutional law, the heads of all agencies must be appointed by the president, not by Congress or anybody else.

QuickTake Net Neutrality

Some agency heads can be removed by the president at will; think of the secretary of state or of the Treasury. Other agencies, like the FCC, are run by officials who can only be removed for cause. These are called “independent agencies.” The FCC commissioners are also drawn from both political parties.

The Senate committee report claims that independence and bipartisanship are intended to make the agency “independent of the policy aims of the executive branch.” But this is legally wrong.

The governing standard for presidential lobbying of the FCC is a 1991 opinion of the Office of Legal Counsel in the Justice Department, entitled “Ex Parte Communications During FCC Rulemaking.” It was written during the administration of George H.W. Bush, and is signed by John McGinnis, now a respected conservative law professor at Northwestern University. The Senate report cited the opinion selectively and misleadingly.

The opinion opens by saying that it’s “clearly permissible” for the White House “to contact FCC commissioners to advocate a position on” rulemaking. Quoting the U.S. Court of Appeals for the D.C. Circuit, the opinion says that it’s a “basic need” for the president “to monitor the consistency of executive agency regulations with administration policy.” The president and his advisors, it says: “Surely must be briefed fully and frequently about rules in the making, and their contributions to policymaking considered. The executive power under our Constitution, after all, is not shared — it rests exclusively with the president.”

In a footnote, the opinion clarified that this “need” for presidential input extends to independent agencies, which are “not distinguishable” from other agencies. “Accordingly,” says the opinion, “the president retains authority to attempt to influence rulemaking decisions by ‘independent agencies.’”

It doesn’t get much clearer than that. Not only isn’t it illegal for the president to try to influence the FCC, it’s part of the president’s executive authority to do so.

Independence is meant to give agencies some degree of insulation from administration influence. But it isn’t meant to remove them from political influence altogether, which would also remove them from supervision by the voting public. The public holds the president responsible for what his FCC does -- which means he needs to be able to exert some influence over it.

The only restriction placed on the president by the Office of Legal Counsel’s opinion is that otherwise secret contacts of “substantial significance” should be disclosed in the rulemaking record.

Nothing in the report suggests that the FCC violated this guidance. The report’s basic allegation is that after Obama announced his preference for Internet service providers to be regulated like phone companies or railroads, FCC chairman Tom Wheeler changed gears to follow his guidance. The report suggests, based on circumstantial evidence, that Wheeler may have known that Obama’s announcement was coming before it happened, and delayed issuance of the agency’s draft regulation in anticipation.

But the presidential influence alleged in the report came only after Obama’s public statement, which was known to the whole world after it appeared on the front pages of newspapers. That influence was perfectly lawful and constitutionally sensible.

A counterargument can be made that independent agencies should be left alone because their work is apolitical, technocratic, and objective. That view, popular among theorists of administrative law in earlier generations, was echoed by critics of Ronald Reagan in the 1980s when he met with the head of the FCC to discuss a regulatory issue.

There’s still good reason for the president to respect the judgment of independent agencies on technical matters in which their professional staffs are expert. But the old fantasy that all the work of these agencies is objective now seems anachronistic.

Net neutrality is a controversial political issue, with high emotional stakes for consumers and major economic stakes for companies that sell Internet service and for big bandwidth users like Netflix. The issue can’t be resolved apolitically -- and it’s a mistake to criticize the Obama administration for weighing in.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.