What More Do We Know About Ajit Pai’s Agenda?

What More Do We Know About Ajit Pai’s Agenda?

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Robbie's Round-Up for the Week of March 20-24, 2017

Federal Communications Commission Chairman Ajit Pai delivered his first major policy speech as Chairman on March 15th, in remarks titled, “Bringing the Benefits of the Digital Age to All Americans.” At Carnegie Mellon University in Pittsburgh, Pai discussed his guiding principles for his regulatory approach as FCC Chairman, and concluded with practical policies he will be championing to expand broadband access nationwide.

Chairman Pai’s Guiding Principles

Chairman Pai outlined four guiding regulatory principles:

  1. The Importance of Digital Empowerment and the “Democratization of Entrepreneurship”: “I believe in the power of Internet-based technologies to create jobs, grow our economy, and improve people’s lives in countless ways.“
  2. Ubiquitous Access to Digital Opportunity: “I believe that every American who wants to participate in our digital economy should be able to. Access to digital opportunity shouldn’t depend on who you are or where you’re from...As Chairman, I plan to focus more time and attention than the FCC traditionally has on places where people feel left behind—places that Washington too often looks past.”
  3. A Competitive Free Market Unleashes Private-Sector Ingenuity: “The public interest is best served when the private sector has the incentives and freedom to invest and create. That’s why we must eliminate unnecessary barriers to investment that could stifle new discoveries and services. In particular, the government should aim to minimize regulatory uncertainty, which can deter long-term investment decisions.”
  4. The Free Market Doesn’t Mean that Government Has No Role: “I believe that a healthy respect for the free market doesn’t mean that government has no role. For example, the FCC must protect consumers and promote public safety.”

Most readers will agree that the Internet is a powerful tool for entrepreneurship, opportunity, and innovation. But Chairman Pai falls short on extolling the benefits of the Internet beyond economic gains. The Internet opens more avenues for civic engagement, creates easier access to healthcare and education, and connects communities to strengthen the social fabric of our society. Pai’s guiding regulatory principles are economically motivated: help entrepreneurs, help potential consumers, free up the marketplace. Chairman Pai says, “Access to digital opportunity shouldn’t depend on who you are or where you’re from.” Why not add “or how much you earn”?

What is “The Public Interest”?

Of note in this speech is Ajit Pa’s view of the public interest, a key concept referred to many times in U.S. communications law. According to Chairman Pai:

The public interest is best served when the private sector has the incentives and freedom to invest and create. That’s why we must eliminate unnecessary barriers to investment that could stifle new discoveries and services. In particular, the government should aim to minimize regulatory uncertainty, which can deter long-term investment decisions.

It’s worth noting how Chairman Pai’s predecessor, Tom Wheeler, viewed the ‘public interest’. In interviews near the end of his tenure, Wheeler said his greatest lesson from being Chairman was, "how malleable the definition of the public interest becomes when it comes to protecting self-interest.” Having previously served as an industry lobbyist, Wheeler said that, as FCC Chairman, he came to a realization that, in meeting with lobbying and other groups, “everyone comes in here and talks about how their self-interest is synonymous with the public interest.”

Wheeler said, "I needed to define the public interest as the common good. At a time when everyone is wrapping their self-interest in their definition of public interest, the question has to be what is the best way to serve the common interests of the most [people]."

Indeed, looking back at Wheeler’s first policy speech as FCC Chairman, he said:

[T]he most important thing I hope you will take away from my remarks today is not what the FCC is doing, but why we are doing it. And the answer to that question is that we are the people's representatives, acting on behalf of the public, who have the responsibility to maintain the values you find important.

Principles to Policies: Investing in Broadband Infrastructure

Moving from his regulatory philosophy towards future policies, Chairman Pai stated his belief that wired and wireless broadband networks are core components of our nation’s infrastructure. He said, “If Congress moves forward with a major infrastructure package, broadband should be included.” Pai then outlined some ideas as to how those investments should be made:

1) Using the FCC’s Universal Service Fund (USF). “Any direct funding for broadband infrastructure appropriated by Congress as part of a larger infrastructure package should be administered through the FCC’s Universal Service Fund and targeted to areas that lack high-speed Internet access.”

Pai argues that 1) “our track record is frankly better than that of other agencies” (pointing to American Recovery and Reinvestment Act broadband programs administered by the Departments of Agriculture and Commerce), 2) the FCC’s USF will minimize waste, 3) the USF’s reverse auction is designed “to get the most bang for the buck”, and 4) there's bipartisan support for FCC’s universal service programs.

In early March, Senate Commerce Committee Chairman John Thune (R-SD) said he’s open to funneling broadband infrastructure funding through USF. “I think the USF could be a way to figure out how we channel and move money in the right direction — get the most lead on the targets, so to speak, to get results,” Chairman Thune said.

[The issue of incorporating broadband into larger a larger infrastructure package is currently being worked on in Congress. On March 21, the House Communications Subcommittee held the hearing, “Broadband: Deploying America's 21st Century Infrastructure”. For further developments, be sure to follow along in Headlines.]

2) Gigabit Opportunity Zones. “Congress should include in the infrastructure bill my proposal for creating Gigabit Opportunity Zones.”

In September 2016, then-Commissioner Pai revealed a proposal (which I wrote about in benton logoSetting the (Post-Election) Broadband Agenda) to give Internet service providers tax incentives to build out high-speed broadband in low-income neighborhoods, require local governments to make it easy for those companies to deploy the networks, and to offer tax incentives for startups of all kinds to take advantage of these networks and create jobs in these areas.

In his speech, Chairman Pai referenced a report from the National Digital Inclusion Alliance, which concluded that “AT&T has systematically discriminated against lower-income Cleveland neighborhoods in its deployment of home Internet and video technologies over the past decade.” Of the report, Pai said, “This highlights the need to establish Gigabit Opportunity Zones, which would give the private sector the incentives to expand next-generation networks into high-poverty areas and help revitalize them.”

The Journey Ahead

Chairman Pai concluded his remarks saying:

Whether it’s time or technology, it’s easy to feel that the future is written by powerful forces that are beyond our control. But [Andy] Warhol reminds us that real change doesn’t come from external forces alone, but from human initiative. Real change comes from us. You are proving that here in Pittsburgh. The FCC’s job is to be your partner in that journey. By helping to close the digital divide and promoting innovation, we can empower more Americans to change their own lives. That’s the mission ahead of us.

Even after this speech, there’s a great deal of uncertainty about Chairman Pai’s agenda. Will he repeal the FCC’s Open Internet/network neutrality rules that were upheld in courts last year? How will he apply the public interest standard to major media and telecommunications acquisitions in the months to come? Will he uphold reforms of the FCC’s USF programs, reforms meant to focus the programs on extending broadband’s reach and affordability to rural and Tribal areas, to schools and libraries, and to low-income households?

As you know, these are just the sorts of things we love to track in Headlines. We’ll be sure to share the latest developments.

Quick Bits

Weekend Reads (resist tl;dr)
coffee iconA President’s Credibility (Wall Street Journal Editorial)
coffee iconHouse Communications Subcommittee Hearing 'Broadband: Deploying America's 21st Century Infrastructure' (House Communications Subcommittee)
coffee iconDigital divide persists even as lower-income Americans make gains in tech adoption (Pew Research Center)
coffee iconIn New York, Bringing Broadband to Everyone by 2018 (New York Times)

Events Calendar for March 27-31, 2017
March 20-31 -- Information Security and Privacy Advisory Board, NIST

ICYMI From Benton
benton logo"Deconstruction", Michael Copps
benton logoBenton Stands With Toby to Say "Don't Delete Big Bird", Adrianne Furniss
benton logoWhy Radical Deregulation Is Happening So Fast At The FCC, Andrew Jay Schwartzman
benton logoChairman Pai, Tell Us What You're Thinking About Freedom of the Press, Adrianne Furniss

By Robbie McBeath.