Court Overturns FCC Lobbying Restrictions

(CN) - The 10th Circuit overturned a lobbying ban for companies that provide telecommunication services for hearing and speech-impaired customers, saying the Federal Communications Commission "provided no explanation for why lobbying was singled out for prohibition."

Sorenson Communications and GoAmerica offer "telecommunications relay services" (TRS), which allow people with hearing or speech disabilities to make and receive phone calls. The companies have operators, called communications assistants, who translate incoming calls into text and outgoing calls into speech for disabled customers.

The government compensates interstate TRS providers from a fund governed by the FCC.

In 2007 and 2008, the FCC placed three restrictions on TRS providers, two of which involved lobbying. The agency said providers could not use money from the TRS Fund to lobby customers, nor could it use customer data for lobbying or any other purpose except handling TRS calls. The FCC also barred companies from using certain "abusive" marketing practices.

The Denver-based federal appeals court noted that the FCC does not reimburse video relay service providers for actual costs, but pays them on a tiered price-cap formula. If the providers can offer the service for less than the FCC's estimated cost, it gets to keep the difference.

"Under this compensation scheme ... the FCC singled out lobbying as the one expenditure for which TRS Fund proceeds could not be used," Judge Murphy wrote. "The FCC's justification is inconsistent with the logic of the price cap-based compensation system.

"Under the FCC's broad rationale, any expenditure apart from the actual cost of providing TRS is inconsistent with the purpose of the Fund," Murphy added. "Lobbying expenditures, however, are the only expenditures prohibited."

The FCC also failed to explain how its restriction on the use of customer data for "lobbying or any other purpose" is narrowly tailored, the court ruled. It rejected this regulation of commercial and political speech as a violation of the First Amendment.

The three-judge panel reversed the lobbying restrictions and remanded to the FCC.

However, the panel dismissed the challenge to the restriction of abusive market practices, because GoAmerica failed to present its argument to the FCC before seeking judicial review.

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