In a significant development that could reshape the future of FCC enforcement practices, a coalition of leading telecommunications trade associations—including CTIA, NCTA, CCA, USTelecom, and WIA—filed a Petition for Rulemaking on May 1, 2025, urging the Federal Communications Commission (FCC) to undertake comprehensive reforms to its enforcement regime. The petition arrives on the heels of a pivotal Fifth Circuit ruling that invalidated a $57 million FCC forfeiture against AT&T on constitutional grounds.
The Petitioners argue that the FCC’s current enforcement apparatus is “unpredictable, inconsistent, and unaccountable,” and must be fundamentally overhauled to align with due process standards mandated by the Constitution and affirmed in recent federal court decisions—most notably the Supreme Court’s 2024 opinion in SEC v. Jarkesy and the Fifth Circuit’s April 2025 decision in AT&T v. FCC.
Key Legal and Policy Arguments Raised:
- Constitutional Due Process & Jury Trial Rights
The industry groups assert that, in light of Jarkesy and the Fifth Circuit’s application of it in AT&T, the FCC’s practice of imposing civil monetary penalties through in-house adjudications violates the Seventh Amendment. The Jarkesy decision held that federal agencies cannot bypass Article III courts and jury trials when imposing such penalties . - Lack of Fair Notice and Arbitrary Penalty Practices
The Petitioners criticize the FCC’s use of Notices of Apparent Liability (NALs) to impose penalties based on novel or unclear interpretations of law, depriving regulated parties of meaningful notice and opportunity to comply. They cite examples of companies blindsided by broad Letters of Inquiry (LOIs), excessive tolling demands, and NALs based on tenuous or unpublished legal theories . - Use of Enforcement to Develop Policy
The petition argues that the FCC increasingly uses enforcement proceedings to establish new regulatory obligations, circumventing the rulemaking process. This “rulemaking by enforcement” practice, they contend, undermines legal certainty and violates the Administrative Procedure Act and due process norms . - Need for Structural Reforms
The filing proposes a range of procedural reforms, including:- Prohibiting the use of enforcement to adopt new rules or interpretations.
- Establishing enforceable timelines and limits for LOIs.
- Providing regulated entities with early access to the evidence against them.
- Ensuring finality by mandating closeout letters for completed investigations.
- Prohibiting the use of non-final enforcement actions (e.g., pending NALs) in unrelated proceedings.
- Calls for Transparency and Accountability
To restore public and congressional trust, the Petitioners recommend that the FCC publish performance metrics related to enforcement activities and eliminate reliance on headline-grabbing fine amounts as a proxy for effective regulation.
Implications for Regulated Entities:
If adopted, the proposed reforms would substantially recalibrate the balance of power in FCC investigations and enforcement. In particular, service providers could expect greater procedural protections, clearer rules of engagement, and improved opportunities to challenge enforcement actions prior to public disclosure.
Equally important, the Petition underscores growing industry momentum to limit agency overreach and restore judicial safeguards to the administrative enforcement process.
Marashlian & Donahue, PLLC will continue to monitor the FCC’s response to the petition and advise clients on the potential impact of any rulemaking or related litigation.
The CommLaw Group Can Help!
Clients currently under investigation or subject to FCC enforcement actions should consult with counsel regarding their rights and potential defenses in light of recent constitutional developments. Our firm is available to assist clients in preparing comments should the FCC open a rulemaking in response to this petition.
For further information, please contact your attorney at The CommLaw Group or email Jonathan Marashlian at jsm@commlawgroup.com.
