Trump’s FCC Chairman pick Ajit Pai heralds a weaker, meeker Commission

FCC Commissioner Ajit Pai was elevated today to Chairman by the Trump administration, setting the stage for a more restrained and permissive FCC than under Tom Wheeler, who resigned last month. Pai has consistently opposed Wheeler and the other Democratic Commissioners on controversial issues like net neutrality, often dissenting on the grounds that the FCC is overstepping its authority.

Today’s appointment can be made without a confirmation hearing, though he’ll have to be examined if he is to transition from acting to long-term Chairman. The Commission has two empty slots to fill; it is expected that one appointee will be selected by each party, switching the FCC’s leadership to a 3-2 lead in favor of the Republicans. (No more than 3 of either political party are allowed on the 5-person Commission at one time.)

Pai is a Kansas-born lawyer-turned-regulator who spent some time working for Verizon in the early 2000s before working his way up in D.C. and earning his place on the Commission in 2012. He was nominated by Obama, but Republicans in the Senate actually selected him — a privilege traditionally awarded to the minority party during the appointment process.

After joining the Commission, Pai both proposed and opposed rules aimed at consumer protections: he voted against orders lowering the cost of cable boxes, advancing municipal broadband, lowering rates for prison phone calls, restricting data collection by ISPs, and so on.

Some of these objections may not have served consumers well, but it would be wrong to call them unreasonable. For cable boxes, Pai said the focus should be on removing them and associated costs altogether, for instance. For municipal broadband, he said it was farcical to have a Democratic-led FCC overturn state laws enacted by Democratic legislatures. And his insistence that the FCC did not have the authority to regulate prison phone calls was at least partly held up in court. Pai has also shown a willingness to negotiate and compromise.

That said, Pai’s bark has been considerably less measured than his bite. Over the years he has written dissenting opinions, letters, op-eds, and other items that are worryingly incendiary.

Dissonant dissent

Just recently the Commission issued a non-binding and rather tame report on zero-rating practices, suggesting AT&T was possibly violating the Net Neutrality General Conduct Rule, but that T-Mobile and Verizon were fine.

Pai’s called the report a “regulatory spasm,” saying that Wheeler was “cutting corners on process, keeping fellow Commissioners in the dark, and pursuing partisan, political agendas that only harm investment and innovation.” It’s not really what you would call a proportionate response.

In 2014 the FCC proposed a study looking into what newsrooms used and needed in order to cover various issues, as part of a mandatory report to Congress on that topic. In response, Pai wrote an op-ed for the Wall Street Journal, saying “The government has no place pressuring media organizations into covering certain stories.” He conjured phantom threats that the FCC would force coverage of certain issues, while simultaneously mocking MSNBC and praising Fox News.

He also asked why the FCC would include newspapers in this study when print media are not under its authority to regulate. The absurdity of this question exemplifies the real problem with Pai’s approach to regulation.

There are multiple answers, to begin with — none of which are partisan opinions and all of which an FCC commissioner would know. First, “newspapers” are not just print media and haven’t been for a long time. Second, even if they were, the FCC was not trying to regulate newspapers, just study their needs, as it might for schools or small businesses. Third, newspapers are leading-edge users of the communications infrastructure the FCC was charged by Congress to report on.

That none of these facts was acknowledged by Pai suggests a disingenuous argument, and calls into question the sincerity of his other positions.

In opposing the motion to raise the definition of broadband to 25 megabits down and 3 up, Pai noted that in another FCC-approved program, rural “broadband” deployments wouldn’t meet the very definition of broadband they were attempting to set. Calling the two moves “incoherent,” he asked, “Don’t those in rural America deserve broadband access?”

Did you notice the bait and switch there? He conflated the two issues to appeal to the gut — “of course they deserve it!” thinks the reader. But defining broadband differently has no effect on the speeds provided by a completely different program; that these connections wouldn’t be classified as broadband in FCC studies going forward doesn’t mean they would cease to function. In fact, the new definition might help usher in higher ones! But because the two are not in technical harmony, he opposed the new definition.

One might write this off as a classic “letting the perfect be the enemy of the good,” but ask yourself this: who is helped by opposing the change to how broadband is defined in this country? It’s not the people who will be receiving it. Keeping the definition modest (4 Mbps down, 1 up) only encourages laxity in the space, reducing the cost and urgency of deploying new networks.

If his goal was to provide the best services to rural America, why not, for example, support the new definition on the condition that it be included retroactively in the other program? Instead, if Pai had had his way, those people would get the old broadband in both practice and definition.

It turns out that industry giants are almost always the gainers in Pai’s ostensibly by-the-book objections, often in the form of being allowed to continue doing what they’ve been doing for years or decades. This isn’t because he’s an industry plant — something people thought about Wheeler, by the way — but because he’s a die-hard free market Republican who truly believes that largely unregulated competition is the path forward. And like any other ambitious politician, he isn’t afraid to cherry-pick facts or manipulate the message to achieve that goal.

Not Neutrality

Nowhere is this more relevant than with regard to Net Neutrality. Pai vehemently objected to the FCC’s landmark Open Internet Order from February last year; his epic 67-page dissent statement takes issue with practically every aspect of it, from conception to execution.

The primary objection is, again, that the FCC is overstepping its authority and regulating something that is better off without:

For twenty years, there’s been a bipartisan consensus in favor of a free and open Internet.  A Republican Congress and a Democratic President enshrined in the Telecommunications Act of 1996 the principle that the Internet should be a ‘vibrant and competitive free market. . . unfettered by Federal or State regulation.’ … The Internet has been an amazing success story, changing our lives and the world in ways that would have been unimaginable when the 1996 Act was passed.

He’s right, of course — and it is this very rightness that contradicts the spirit of his dissent. Rarely if ever has the world changed so quickly in 20 years, and rarely has a single technology been so transformative for every aspect of modern life.

The world has certainly changed in ways unimaginable in 1996, and yet it is that dated perspective Pai calls on for support. It’s like saying building techniques have come a long way in 20 years while praising codes set in place before those advances. Net neutrality is a concept of governance that has appeared out of necessity as technology outpaced the laws set in place around it.

Pai’s opinion is that this enormous and unpredictable market will regulate itself just fine. Yet history seems to be against him: the enormous growth and consolidation patterns in the tech and connectivity industries (which overlap substantially) parallel those of other growth spurts that spawned critical protections such as antitrust and labor laws.

Under Pai’s leadership and with a likely 3-2 Republican majority once others are appointed, the FCC will almost certainly work to strike down the Open Internet Order altogether. You can expect major players in the business to take advantage: zero-rating and bundled services will multiply, for instance, and there may be special treatment of different “tiers” or “categories” of data rather than simple bit-by-bit caps.

A sincere approach to the market would not avoid the obvious fact that things have changed over the last 20 years, and both legislation and regulation need to catch up. The free market is a valuable thing, but also a theoretical one: no markets are truly free. Some authority or another is always setting the bounds in hard or soft fashion, with interest rates, trade agreements, non-discrimination laws, and do on.

The question with internet access, paid prioritization, edge provider collusion, and other net neutrality issues is not one of whether to regulate them, but how.

Wheeler’s FCC, finding that the White House would back its play, made a big bet on net neutrality. It’s not perfect, and like other regulation and legislation would have been a work in progress. Pai’s FCC will pull that bet and substitute — well, nothing. You’re to place your trust in the Verizons, Comcasts, and Charters of the world to do right by you and all consumers because in this free market of ours, what’s right is also what makes good business sense.

If that’s been your experience with these companies, you may concur with Pai’s approach. But the rest of us find many reasons for dissent.