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any action in these areas. Also, existing agency rules, regulations, policies, practices and procedures must be modified to conform to the purposes of this title, and the F.T.C. is directed to report annually to Congress and to the President on the degree of agency compliance.
This title is almost identical to sections 3, 4 and 6 of S. 382, the "Competition Improvements Act of 1979," and I have enclosed a copy of my comments on that bill (attachment 2). I stated there, I believe that by clarifying the weight to be attached to competitive considerations, this bill will have a very beneficial effect on the F.C.C.'s efforts to deregulate in those areas where market forces can operate effectively. However, my letter also notes (1) that, since the F.T.C. and the Attorney General may use their full investigative powers in F.C.C. proceedings, due process considerations might require providing the other parties with discovery rights, and (2) that the provisions for notice to the Attorney General appear unclear and unnecessary.
In addition, it appears that the bill's description of the four areas to which the section applies is much too broad. The present language requires the F.C.C. to make a finding on competitive effects every time it grants a new broadcast or other license, whether or not any policy is affected. Thus, "boiler plate" language, explaining that no competitive effect would occur, would have to be included in many F.C.C. opinions. I suggest limiting the section's requirement to agency actions which would themselves meaningfully affect competition.
Finally, I believe the F.T.C.'s role as watchdog over other agencies should be clarified. I suggest amending the bill's language to specify that the F.T.C.'s annual report should focus on the effects of agency actions on the regulated industry. This would better indicate that the F.T.C.'s oversight role is intended to be industry-wide rather than focusing on an agency's individual decisions.
This responds to your letter dated June 22, 1979 requesting our views
TITLE I- IMPROVING THE REGULATORY PROCESS
Rulemaking Procedures. This Title would establish a new rulemaking
(1) any rule required by Executive Order to be kept secret
in the interest of national defense or foreign policy;
any rule involving agency organization or personnel
(3) any "emergency rule" as to which the agency determines
these funds effectively represent important viewpoints that would not otherwise be heard. Financial assistance would not be provided unless public participation is authorized by statute, regulation, agency practice or the exercise of agency discretion. Safeguards are also specified in the bill to assure proper use of funds provided. We support the thrust of these provisions. Our only difficulty relates to the provision which permits each agency to evaluate the performance of subsidized witnesses and to recoup funds advanced to them if the agency itself determines that the witness "clearly has not provided the representation for which the payments were made" or if the witness has "acted in a manner demonstrating bad faith toward the agency. We believe this recoupment power gives the agency concerned too much influence over the nature of testimony presented and could thereby undercut the whole purpose of this procedure. We would recommend instead that this (recoupment power, if necessary at all, be vested in the Administrative Conference, based on consultation with the agency involved.
Title II is a revised version of S. 382, "The Competition Improvements Act of 1979." Generally, Title II seeks to tighten the focus of S. 382 and allay concerns that the bill would inadvertently jeopardize legitimate regulatory goals or adversely affect current efforts to improve the regulatory process. Specifically, while S. 382 originally imposed competitive standards on all agency action, the new draft applies only to four types of action: (1) entry regulation, (2) price regulation, (3) production limitations, and (4) approval of private agreements. In these four areas agencies would be required to consider the competitive effects of their actions and choose the least anticompetitive alternative legally and practically.available to achieve statutory goals.
Title II would seem to cover such FDIC actions as deposit insurance, merger and branch applications, Regulation Q-type limitations on interest rates paid by insured banks, and other actions restricting service offerings by banks. The effect on competition is already a major consideration in connection with most of these types of regulatory actions taken by the FDIC.
We generally support the thrust of S. 382. We believe, however, that a Tabinet-level department (most logically the Justice Department), rather than the Federal Trade Commission, should be granted authority under the bill to report annually to the Congress on the degree of compliance by Federal agencies with the bill's requirements. Alternatively, we would recommend that each Federal agency be required to include such material in its own annual report to Congress. Neither approach is reflected in the revised provisions in Title II of S. 1291. We have difficulty with the concept of one independent regulatory agency policing the compliance by other agencies with statutory requirements.
One area of difficulty created by the revised provisions of Title II is the right granted to the Justice Department and Federal Trade Commission to intervene in regulatory proceedings subject to the bill. Originally, S. 382 granted this right only as to a few specific agencies. Title II gives Justice and the FTC broad authority to intervene in the proceedings of all agencies. Section 603(b) states that the Attorney General and the FTC "may each appear as a party of right" in any administrative or judicial proceeding subject to the bill. This ambiguous language could become the source of considerable controversy and uncertainty in the administrative process.
While we do not object to granting the Justice Department, as a spokesman for the Administration, the authority to provide input on antitrust matters to other Federal agencies, we believe that similar authority should not be conferred on an independent regulatory agency such as the FTC. We believe that such a grant of authority to the Justice Department should be spelled out in more detail to avoid unnecessary delay and uncertainty in administrative proceedings. Accordingly, we would prefer that either § 603(b) be phrased in terms of granting Justice the right to submit advisory opinions on competitive matters pending before other agencies or that the procedures and legal effect of formal intervention by the Justice Department be more fully set-out in the bill.
Otherwise, we have no strong objections to the revised provisions of
REVIEW OF THE EFFECTIVENESS OF AND CONTINUING NEED
This title.would require the President, acting on the advice of a newlyestablished Committee on Regulatory Evaluations to propose regulatory reform bills according to a schedule which mandates Presidential review of 10 categories of agencies between 1982 and 1992 (banking agencies in 1992). Once in Congress, the President's regulatory reform bill would be referred to the appropriate committees which would have 360 days of continuous session to scrutinize, amend and report out a regulatory reform bill.. If the committee reports out the bill, it would become a "privileged" matter on the floor of Congress. If the committee fails to report out the bill by the 360-day deadline, Title III provides for a discharge measure which could be used to bring a regulatory reform bill to the floor of Congress.
We support Title III, and we would note that we are engaged with our partner financial regulatory agencies in a joint exploration of areas of cooperation and coordination through the vehicle of the Federal Financial Institutions Examination Council created by Title X of FIRIKCA (the Financial Institutions Regulatory and Interest Rate Control Act of 1978.)
This is in response to your February 9, 1979 request for the views of the Federal Maritime Commission on S. 328. Our comments are substantively identical to those which we prepared on S. I's predecessor bill, S. 2625.
We submitted them to OMB on July 7, 1978.
OliB never authorized direct submission of our views to the Congress. In view of that experience, we are submitting our comments on S. 328 to you directly.
The Federal Maritime Commission opposes enactment of S. 3, as we opposed S. 2625, for several reasons. 82
Section 3 (a) of the bill would preclude any agency action tending to create an anticompetitive effect in the absence of a finding that the action in question meets one of several overriding criteria. Legislation applying these standards to the ocean shipping industry is unnecessary because the Commission, in interpreting and implementing the policies of the Shipping Act, already applies criteria for approving grants of antitrust immunity that are very similar to those listed in this section of your proposed bill.
The FC has developed a standard for review of potentially anticompetitive agreements filed under section 15 of the Shipping Act, and this standard was expressly approved by the Supreme Court in 1958. Agreements filed with the Commission that are per se violations of the United States antitrust laws