On July 9, the Office of Management and Budget (OMB) rejected the FCC's new leased-access rules as a violation of the Paperwork Reduction Act (PRA). The OMB rejection was the second setback for the rules, which were stayed by the Sixth Circuit Court of Appeals in May.

The PRA requires agencies to avoid passing regulations that increase the paperwork burden on industry and requires agencies to provide sufficient justification for rules that would increase such a burden.

The leased-access rules, adopted by the FCC last November, require cable operators to provide a host of new data to the Commission about requests to lease channels on their systems. The rules also decrease the amount of time cable operators have to provide information to leased-access providers from 15 business days to three.

OMB found that the FCC had failed to justify the need for the reduction to three days, failed to establish the need for the increased data collection, failed to take reasonable steps to minimize the paperwork burdens on cable operators and failed to show how the FCC would protect proprietary and confidential information.

The FCC may now either appeal the OMB's decision or overturn it through a majority vote of the five cmmissioners. Because it is considered an independent government agency, the FCC may overturn OMB's decision through a majority vote of the five commissioners.

It is not yet clear how the OMB's decision will impact other FCC rules currently undergoing the PRA review process, particularly the FCC's Enhanced Disclosure rules. Those rules, released in January, would require stations to submit to the FCC a new Form 355 detailing their programming and to post their public inspection files online. The FCC staff is still determining whether or not to submit those rules to the OMB