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Remarks as delivered:
Let me begin by stressing that although I disagree with Ms. Sohn on a number of policy matters, such as rate regulation, I do not intend to discuss those disagreements today. Perhaps others will, but I do not. I will also note that this hearing is not about obstructing a nominee. Many members on this side of the dais have voted to report many, many nominees out of this committee favorably under President Biden, including a nominee to the FCC. It gives me no pleasure to say that my reason for being here today is to discuss outstanding questions about Ms. Sohn’s fitness and ability to serve as a Commissioner, particularly in light of developments that occurred after our hearing on December 1st of last year.
Some of the matters that require further examination include Ms. Sohn’s service on the board of Sports Fans Coalition New York, Inc., as well as the settlement agreement that this entity and its directors reached with several broadcasters regarding its illegal Locast service. Additionally, a number of questions surround Ms. Sohn’s recently released voluntary recusal letter, which would bar her from participating in the FCC’s retransmission consent and television copyright matters for at least three, and possibly four, years. I expect my colleagues will have additional matters they would like to discuss with Ms. Sohn in today’s hearing.
The settlement agreement between Sports Fans Coalition New York, Inc., and broadcasters is troubling for many reasons. Broadcasters had accused Sports Fans Coalition New York, Inc., of infringing on their copyrights in the operation of the Locast service. Yet the parties settled this dispute, with the coalition agreeing to pay just $700,000 of the $32 million in “statutory damages” they reportedly owed. I recognize that settlement agreements are common in litigation, but a settlement for a fraction of the statutory damages stands out. Ms. Sohn has not been forthcoming about this settlement. I have in my hand questions for the record. When I asked her about the source of the $32 million settlement, she did not acknowledge that it had been reduced to $700,000, which raises questions as to what else she is not revealing about this litigation.
What also makes this settlement troubling is that Ms. Sohn and most of the other parties signed the agreement one day after President Biden announced his intent to nominate her to the FCC. This timing raises questions:
- Did the parties know that in settling a claim for 2% [1/50th] of the amount of statutory damages, they were settling with a future FCC Commissioner?
- Did the White House know of the forthcoming settlement when deciding the timing of Ms. Sohn’s nomination announcement?
- Did any of these factors influence the decision to settle and the amount of the settlement?
- What are the ethical issues of parties accepting a 98 percent reduction, plaintiffs accepting a 98 percent reduction in financial damages before potentially being regulated by Ms. Sohn?
This committee needs clarity on this settlement. We need to know whether it is fully satisfied and whether the directors of Sports Fans Coalition, including Ms. Sohn, remain liable for any part of it. We need to know Ms. Sohn’s role in negotiating the settlement, and whether her nomination affected it in any way.
Further, our December 2021 nominations hearing for Ms. Sohn showed that members on both sides of the aisle have had concerns around her ability to remain impartial on matters related to broadcasters and their content. Two weeks ago, Ms. Sohn sent a letter to the FCC voluntarily recusing herself from any proceeding concerning retransmission consent or television broadcast copyright. However, in a puzzling move, she based this recusal on a single filing at the Commission while she was President of the advocacy group, Public Knowledge. If Ms. Sohn feels that she cannot be viewed as impartial on matters related to this particular filing and docket, should that same rationale extend to the many other matters that Public Knowledge submitted filings on during her tenure? A number of industry associations have expressed a concern that she suffers similar conflicts - or at least the appearance of conflicts - to the one she identified in her recusal letter. Based on Ms. Sohn’s own stated reasoning, it seems to me there may be additional matters from which she would need to recuse herself if she follows this rationale.
In addition to the substantive questions pertaining to this recusal, I am also concerned about the circumstances that led to the drafting and release of the recusal letter. The timing and scope of the recusal raise several questions that I hope we can get answers to today—in particular, who was involved with the formulation of this recusal agreement? Was the support of any individual or entity predicated on the signing of such an agreement? Was this recusal a quid pro quo, as others have asserted? What prompted Ms. Sohn to recuse herself voluntarily—and why now?
Given the importance of the FCC Commissioner position and the need for all Commissioners to participate fully in the agency’s work, I am doubtful that Ms. Sohn’s recusal resolves the outstanding concerns many members still have. A fair assessment would lead one to conclude the public deserves a regulator they can trust to be impartial on all matters, as well as one who can actually do the job for which she was nominated.
Ms. Sohn is a brilliant attorney, and I have noted before that all who know her would agree that she is a knowledgeable and determined advocate. But with these rising complications besetting her potential service as an FCC Commissioner, I question whether she is the best choice to fill this vacancy. There are indeed many other qualified candidates who would not have to recuse themselves and answer questions about legal settlements.
I want to thank Ms. Sohn for appearing before the committee again today, and I await her testimony on these vital issues.