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New Rules on Incorporated Standards Encourage Necessary Public-Private Collaboration

| Jan 27, 2015 | Opinion

    Incremental change is often the best way—and sometimes the only way—to address a difficult policy issue. This is especially so when the issue is multidimensional, involving the intersection of distinct legal or policy regimes and affecting the activities of multiple, independent actors. When faced with such an issue, decision-makers may agree on a straightforward policy goal. That goal, however, may be achievable only if the affected actors make complementary, incremental changes to the pieces of the issue that fall within their respective spheres of authority.

    flag skycraperThe Office of the Federal Register (OFR)—the agency statutorily charged with approving agencies’ incorporations by reference—recently took such a necessarily incremental step towards addressing one difficult, multidimensional problem: ensuring public access to privately developed technical standards (and other materials) incorporated by reference into proposed or final regulations. The OFR did its part by issuing new incorporation by reference regulations that require agencies to provide more information to the public about the content and availability of incorporated materials.

    The general rule is that federal agencies may only enforce regulatory requirements that have been published in the Federal Register and codified in the Code of Federal Regulations. Under a provision of the Freedom of Information Act, however, agencies can fulfill this publication requirement by incorporating by reference materials that already have been published elsewhere. This is permitted so long as the materials are “reasonably available to the class of persons affected” and the OFR has approved their incorporation. Materials that are properly incorporated by reference become part of “the law.”O

    The difficulty arises when agencies incorporate by reference privately published materials that are copyrighted and available to the public only for a fee. The consequence is that the public may have to pay a private party in order to see the full text of a proposed or final regulation. This problem arises most frequently with respect to privately developed technical standards. In the U.S., private non-profit organizations develop the vast majority of the technical standards necessary to promote technological innovation, facilitate trade, and protect public safety. These organizations typically assert copyright over their standards and rely on the revenue generated from the sale of those standards to fund the standards development process. Federal law and policy have long required agencies to use these privately developed standards instead of creating “government-unique” standards solely to serve regulatory purposes. This approach has a variety of benefits and has facilitated a highly valuable public-private partnership in standards-setting.

    In recent years, a broad consensus has emerged on the importance of addressing the public access problem. As the Administrative Conference of the United States recognized in a recommendation adopted in 2011, the public must have reasonable access to materials incorporated by reference. Ideally, these materials should be made freely available online, just as agencies do with their rulemaking dockets, proposed and final rules, and other key agency documents. At the proposed rule stage, online access allows regulated and other interested parties to comment meaningfully on an agency’s proposal. Once a rule is final, access is necessary to ensure that the public can readily understand what federal law requires.

    The multidimensional character of the problem makes achieving the ideal of free online access very difficult. The public’s right to access must be balanced with private entities’ intellectual property rights, and this balance must be struck without undermining the valuable aspects of the nation’s public-private partnership in standards-setting. I have argued, and the Administrative Conference has recommended, that public-private collaboration offers the best path forward. Success requires the participation of federal regulatory agencies, with the support of non-regulatory agencies such as the OFR, the National Institute for Standards and Technology, and the Office of Management and Budget. It also requires the cooperation of private standards development organizations.

    By issuing its final rule on incorporation by reference, the OFR has committed to doing its part to help facilitate the private-public collaboration necessary to address the problem of public access to incorporated materials. Under the new rules, an agency that incorporates by reference must include in the preamble to both its proposed and final rule: (1) a description of the content of any incorporated material; and (2) a discussion of the steps the agency has taken to ensure that the material is reasonably available.

    The OFR’s rule implements a number of the Administrative Conference’s recommendations, by:

    1. Encouraging agencies to work with copyright holders to improve public access to incorporated materials.
    2. Recognizing that the question of whether an incorporated material is “reasonably available” is highly context-specific.
    3. Establishing a procedural framework that will ensure agencies consider reasonable availability throughout the rulemaking process, including during the proposed rule stage.
    4. Facilitating meaningful public access by requiring agencies to explain the content of incorporated materials that may be highly technical.
    5. Encouraging agencies to articulate regulatory requirements fully in a rule’s text, using incorporation by reference only to provide necessary technical detail.
    6. Refusing to encourage agencies to confine references to non-binding guidance documents as a way of avoiding the challenges of incorporation by reference.

    Some argue that the OFR’s final rule does not go far enough. In one sense, they are right. The OFR’s final rule is an incremental step towards the ideal of free online access to incorporated materials. But the OFR went as far as its authority would allow. If it had gone further, it likely would have put promulgating agencies in the difficult position of having to choose which requirements to violate: publication requirements, federal standards policy, copyright law, or the statutes they are charged with administering.

    The OFR’s final rule properly respects promulgating agencies’ authority over the substantive content of their regulations, while clarifying their obligation to ensure that incorporated materials are reasonably available. It may be incremental, but it is a step in the right direction.

    This post is part of a three-part series, Incorporating Private Standards into Public Regulations.

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