Inspector General’s Investigation of ‘Net Neutering’ Rule Making Sends Shock Waves Through FCC

AP Photo/Jose Luis Magana
AP Photo/Jose Luis Magana

Representative Jason Chaffetz (R-UT), chairman of the House Oversight and Government Reform Committee, had news for FCC Chairman Tom Wheeler. The congressman let Wheeler know that his agency’s Inspector General, David L. Hunt, had opened an investigation into possible White House interference in the agency’s recently announced “net neutering” rules that many critics say incorrectly apply outdated utility regulatory rules from the 1930s to the fast growing internet.

Proponents refer to the rules as “net neutrality” rather than “net neutering.”

Chaffetz dropped the investigation bombshell on Chairman Wheeler at the very end of his two and a half hour appearance before the Oversight and Government Reform Committee on Tuesday.

“We were made aware that the Inspector General has opened an investigation of this [net neutering rule making] process,” Chaffetz stated.

“Are you aware of this investigation?” he asked Chairman Wheeler.

“No,” Wheeler responded curtly.

“It’s my understanding it’s not an audit, it’s not inspection, but an actual investigation. Would you …will you be willing to cooperate with this investigation?” Chaffetz asked Wheeler.

“Of course,” Wheeler answered frostily.

“I think one of the key things, and it was brought up on both sides, is the process of openness and transparency. My personal opinion is there could have been a lot more done to maximize the transparency and openness,” Chaffetz told Wheeler.

“The rules,” Chaffetz continued, “do allow you latitude to give it more transparency than you did. I think one of the things our body should look at is compelling that openness and transparency rather than making it simply discretionary.”

You can hear this exchange beginning at the 2:36 mark here.

Chaffetz explained after the hearing that he had just learned of the investigation.

“I didn’t know about it [the Inspector General’s investigation] ’til I walked up here,” Chaffetz said after he told Chairman Wheeler at his committee hearing that the investigation had been launched “in the last couple days.”

“The probe . . . will focus on the FCC’s rulemaking process leading up to the agency’s recent, historic vote to apply strict rules on Internet providers,” the Washington Post reported Chaffetz said.

Neither the FCC nor the FCC’s Office of the Inspector General have confirmed that such an investigation exists.

“It is FCC OIG policy (and that of every other OIG with which I am familiar) not to comment on the existence or non-existence of an investigation,” Jay Keithley, Assistant Inspector General-Investigations at the FCC, told Breitbart News on Thursday.

But FCC veterans say if there is such an investigation, it would send shock waves through the entire agency, with a likely impact on the recently announced “net neutering” rules.

“If true, the mere existence of such an investigation would give Congress and many other entities a big opening to attack the legitimacy of the order,” Professor Michelle Connolly of Duke University, former chief economist at the FCC, told Breitbart News on Thursday.

Connolly has previously criticized the recently announced “net neutering” rules for “making it possible for the FCC to decide what is neutral and fair whenever they feel like it. They are making it possible for the FCC to impose new taxes on the internet, to impose new obligations and basically to impose anything that the FCC eventually decides that it wants to impose on this industry.”

Though Chairman Wheeler promised the FCC would regulate the internet “under a light touch…like we proposed today,” when the rules were announced in February, Connolly countered that “Chairman Wheeler’s claim of utility regulation of the internet being ‘light-touch’ regulation is akin to saying that the Spanish Inquisition was a polite interview process.”

Chaffetz appears to share Connolly’s views on the proposed “net neutering” rules.

In his opening statement on Tuesday, Chaffetz blasted what he described as blatant White House interference in the “net neutering” rule making process:

In today’s case Chairman Wheeler did quite the opposite and failed to provide this type of transparency. Chairman Wheeler did not make the open internet rule public, did not invite public comment, and declined to appear before this Committee. We find that wholly unacceptable. Further, it appears the FCC is concealing certain communications from the public without legal basis. Organizations that hold our government accountable depend on the FOIA process to gain insight into agency decision-making. The FCC’s track record in responding to FOIA requests is weak, at best.

In light of the lack of confirmation by either the FCC or the FCC IG as to the very existence of such an investigation, Breitbart News asked Representative Chaffetz to reveal his source. Not surprisingly, his office declined to do so.

There is a recent history of conflict between Inspector General Hunt and FCC Chairman Wheeler.

In September, Hunt made a startling statement about Wheeler’s conduct in Congressional testimony.

“Very shortly after Chairman Wheeler took his office, I was informed by his Chief of Staff that OIG would not be allowed to hire criminal investigators,” Hunt told the Communications and Technology Subcommittee of the House Energy and Commerce Committee.

“I have continued a dialogue with management, but to no avail,” Hunt said in his testimony before the committee.

Every major department or agency of the federal government has an Office of Inspector General, whose role is to root out waste fraud and abuse. In the case of the Office of the Inspector General of the FCC, the agency’s official website says, “the Inspector General (IG) and his office provide objective and independent investigations, audits, and reviews of the FCC’s programs and operations.”

Notably, “[t]he Inspector General reports the results of investigations, audits and reviews semi-annually to the Chairman, and to the Congress. These reports, in turn, assist the Chairman, Commissioners and the United States Congress in becoming fully informed of all programmatic and operational deficiencies at the FCC,” the agency’s website adds.

News of the possible investigation by the Inspector General comes at a bad time for the highly partisan Commission.

Deeply divided along party lines, the FCC’s conduct in the “net neutering” rule making process can be seen as a poster child for the dysfunctional, out-of-control executive branch under the Obama administration.

The three Democratic appointed commissioners (Chairman Tom Wheeler, Mignon Clyburn (daughter of powerful U.S. Representative James Clyburn (D-SC), and Jessica Rosenworcel) have been painted as wild eyed ideologues by their critics.

Senator John Thune (R-SD), not exactly a Tea Party firebrand, said the Democratic appointed commissioners had chosen “[the] most radical, polarizing, and partisan path possible” in the “net neutering” rule making process.

The two Republican appointed commissioners (Ajit Pai and Michael O’Rielly) have vocally articulated their frustration with the lack of transparency in the rule making process.

In his dissenting opinion, Pai set forward a classic free market argument opposing the agency’s proposed “net neutering” rules.

On Thursday, the House Communications and Technology Subcommittee of the Energy and Commerce Committee will hold hearings at which all of the FCC Commissioners are scheduled to testify.

Representative Greg Walden (R-OR), the subcommittee chairman, “has released a draft bill to reauthorize the FCC for the first time in 25 years. The bill would freeze the FCC budget for the next four fiscal years, and would keep appropriations for spectrum auction expenses at the same level through 2022.”

Walden’s proposal is seen as an attempt to reign in an out-of-control FCC.

Republicans on Capitol Hill are making their dissatisfaction with the FCC’s rulemaking well known.

It is unclear if news of the rumored investigation by FCC Inspector General David L. Hunt into that process will result in a significant impediment to the ultimate implementation of those rules. It may, instead, simply provide Republicans with yet another opportunity to hold more press conferences to fecklessly protest the continued advance of the powers of the regulatory state over the legitimate constitutionally authorized powers of the legislative branch of the federal government.


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