W&G Advisory: Paperwork Reduction Act Blocks Some New Lifeline Regulations

May 01, 2012

On April 13, 2012, the Office of Management and Budget (OMB) invoked the Paperwork Reduction Act (PRA) to prevent two new FCC regulations from going into effect.  The FCC’s new Lifeline Order required all Lifeline providers to recertify every 90 days the addresses of beneficiaries living at temporary addresses, and it required certain providers to commission biennial outside audits of their compliance with Lifeline regulations.  But OMB has rejected both requirements.  And a third regulation requiring lengthy disclosures on all Lifeline marketing requirements has yet to even be submitted to OMB for approval.

In February, the FCC overhauled its low-income “Lifeline” program, but the rules included substantial new record-collection and dissemination obligations requiring OMB approval under the PRA.  The Commission sought expedited approval for some of the new requirements under the Act’s “emergency” provisions.  In fact, the Commission was in such a hurry that it asked OMB to make its decision before the public comment deadline.

The lead comments (filed by Wiltshire & Grannis) were submitted a week before the Commission-requested decision date, to give OMB time to consider the issues.  Within days, a series of supporting comments followed.  Commenters urged OMB to reject three of the new rules:  1) the biennial Lifeline compliance audit, 2) the quarterly recertification requirement for temporary addresses, and 3) the requirement to add lengthy disclosures to all forms of Lifeline marketing.  Commenters offered an intensely factual critique of the FCC’s faulty analysis of the new rules’ burdens and highlighted the extraordinary overall paperwork burden of Lifeline.  The FCC estimated that its amended regulations would trigger over 30 million hours per year in paperwork, imposing over half a billion dollars per year in cost.  To put this in context, the paperwork cost alone is almost 25% of the total projected Lifeline budget and nearly three times the amount that would be saved by replacing dollar bills with coins.

OMB took the PRA analysis seriously.  It gave temporary approval to the FCC’s new regulations, except the temporary-address and biennial audit requirements.  OMB took no action on the marketing requirement at all because the FCC has yet to even seek OMB approval for it.  A week after the lead comment submission, the Commission issued a supplemental Federal Register notice adding the marketing regulation to the list of rules that will take effect only upon OMB approval, but it has yet to request that approval.  Thus, none of the three regulations drawing PRA objections has yet cleared that hurdle.

What’s next?  The “emergency” OMB approval expires October 31, 2012, but the FCC announced on May 1 that it expected to seek OMB approval of the remaining information-collection provisions soon.  Parties have also filed petitions for reconsideration covering the three requirements, which gives the Commission the option to reevaluate, narrow or eliminate them.  On the other hand, the Commission also has the ability to take the relatively rare step of using its authority as an independent agency to override OMB and impose these Lifeline paperwork burdens despite OMB’s veto.  See 44 U.S.C. §3507(f).  Lifeline providers and other interested parties should continue to monitor the FCC and OMB so they know how the PRA issues affecting these regulations are finally resolved.

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For more information regarding FCC Lifeline regulations, or regarding Wiltshire & Grannis’s practices, please contact John Nakahata at 202-730-1320, Patrick O’Donnell at 202-730-1312, or Chad Breckinridge at 202-730-1349.  This client advisory is not intended to convey legal advice.  It is circulated to our clients as a convenience and is not intended to reflect or create an attorney-client relationship as to its subject matter.

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