U.S. House panel launches probe of FCC practices

WASHINGTON Tue Jan 8, 2008 7:20pm EST

WASHINGTON (Reuters) - Worsening friction between Congress and the head of the U.S. Federal Communications Commission escalated on Tuesday into a formal investigation of agency rule-making procedures and management practices.

The U.S. House Energy and Commerce Committee said it launched the probe to determine if the agency had been fair, open, efficient and transparent when crafting regulations.

The panel did not cite a specific case in a letter to FCC Chairman Kevin Martin but the investigation comes just three weeks after Martin defied lawmakers by holding a vote to ease media ownership restrictions.

Committee Chairman John Dingell a Democrat of Michigan and the ranking Republican, Joe Barton of Texas, asked Martin to save all electronic records and personal e-mails related to FCC work. The investigation would also "address a growing number of allegations received by the committee" that relate to management practices, their letter said.

Last month, Dingell expressed concern that under Martin, the FCC did not give enough notice of proposed new FCC rules and that Martin was slow to give the other four commissioners details of draft agenda items.

An FCC spokesman declined to comment on the letter, but said Martin had previously responded to a December inquiry from Dingell that asked about agency procedures.

"Commission processes and decision-making time frames remain essentially the same as the general decision-making procedures established nearly 10 years ago under Chairman William Kennard," Martin wrote to Dingell.

Martin, a Republican, has clashed with Congress on other issues.

In early December, Martin was criticized by lawmakers in both the House and Senate for insisting that the agency hold a vote to change media ownership restrictions, particularly heading into the final full year of the Bush administration.

At a December 5 hearing before a House subcommittee, Martin rejected lawmakers' calls for the FCC to delay a vote and spend more time studying the issue. Martin's defiance at that hearing "definitely factored in" to the committee's decision to escalate its inquiry into a formal investigation, a House aide said, speaking on condition of anonymity.

A December 18 vote by FCC commissioners, which was 3-2 along party lines, eased a 32-year-old ban on the ownership of a newspaper and broadcast outlet in a single market.

Dingell also expressed concern about a dispute that erupted at an FCC meeting in November, when some commissioners accused Martin of suppressing and manipulating information in pursuit of a measure that would have opened the door to tougher regulations on U.S. cable TV operators.

Telecom analysts said the Congressional investigation was unlikely to derail any FCC policy issues, but would force Martin to spend more time with lawmakers.

"I don't think this investigation will cause Kevin to have to slow down anything he wants to do at the commission," said Blair Levin, an analyst with Stifel Nicolaus. "This seems to be more of an FCC procedural issue."

Paul Gallant, an analyst with Stanford Washington Research Group, said it was noteworthy that the committee's letter to Martin was signed by two Republicans.

In addition to Dingell and Barton, the letter was signed by Bart Stupak, a Michigan Democrat who heads the House panel's investigations subcommittee, and by John Shimkus of Illinois, the top Republican on the subcommittee.

"Martin has already moved the agency toward greater transparency but this does ratchet up the pressure to perhaps make additional changes," Gallant said. "This letter seems to be part of growing interest in the private sector, in Congress and even from within the FCC that the agency process needs to be modified in some ways."

FCC procedures were criticized in a Government Accountability Office review released several months ago. GAO, a bipartisan investigative arm of Congress, said information about votes on proposed FCC rules was leaked to some industry insiders before being made public.

(Reporting by Julie Vorman; editing by Gary Hill, Richard Chang)

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