Ajit Pai Chats About Title II, Future of Internet Growth
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F  irst appointed to the Federal Communications Commission (FCC) as a commissioner by President Obama in 2012, Ajit Pai was designated as chairman by President Trump in March 2017 and confirmed by the U.S. Senate to another five-year term on the panel that October.

Under Pai’s leadership, the FCC repealed the Title II regulations for internet carriers that were implemented under previous chairman Tom Wheeler in 2015.  This move became a political firestorm that is still unsettled although the repeal went into effect in June.

Democrats in Congress are using the Congressional Review Act (CRA) to attempt to void the FCC’s decision while Republicans are pushing legislation that would implement some net neutrality protections for consumers while maintaining a light-touch regulatory framework for the internet. The CRA has passed the Senate and awaits action in the House.

The Taxpayers Protection Alliance Foundation chatted with Pai in his Washington, D.C., office on July 31 about these and other issues facing the FCC under his leadership.

TPAF:  We’re curious what you expect to happen with the Congressional Review Act in the House, and does Republican Rep. Mike Coffman’s support of that have any effect on what will happen?

PAI:  I’m confident we made the right decision based on the facts and the law. I have long said that the internet wasn’t broken in 2015 when the Obama administration imposed these utility-style regulations on a party-line vote.  And, I’m confident going forward that the framework we’ve adopted will be good for consumers, will promote more infrastructure investment and innovation. Now it’s up to the folks in Congress to decide what to do, and I’m hopeful they will see, as we did, that the bipartisan tradition of light-touch regulation of the internet is something that is good for everybody.

We will see in the coming months how things shake out, but I’m hopeful, as I’ve said, that people can put politics aside and focus on what the right decision is for consumers, and that is ratifying, not rejecting, the decision that we made.

TPAF:  The battle over the Title II regulations, or “net neutrality,” got very heated. Did you expect the attacks to get so personal?

PAI:  In a sense I was not surprised because I understand people are passionate about this issue. On the other hand, I was somewhat surprised that some people — especially on the internet and even in the physical world — became so crazed by it. I would hope this is one of those areas that people can agree to disagree civilly, but increasingly in this political environment that seems to be a difficult proposition.

Hopefully, as time goes on and people recognize that following the June 11 repeal of these heavy-handed regulations the internet still works, that they were lied to when they were told it would cost $5 to tweet, that the internet would look like Portugal, or as some said – the – internet – will – operate – one – word – at – a – time. I think they will come to realize this was much more of a political issue that was foisted on us by special interests in the Beltway. It wasn’t a fact-driven debate we were having. They’ll recognize that the light-touch approach was the right one.

I’m confident in part because after having traveled around the country and talking to consumers their number one concern about the internet, almost to a person, has been “I don’t have enough access in my community” or “There’s not enough competition.” It’s rarely been my internet service provider is blocking access to lawful content. I’ve never heard that before. My argument is what best addresses that consumer concern. It’s getting more infrastructure investment out there, building a better business case for these small businesses in particular. That’s exactly what our decision on Title II is designed to do.

It’s a very easy marketing slogan to say “net neutrality,” but when you peel back the layers of the onion what you recognize is that slapping 1934 regulations on something as dynamic as the internet is exactly the opposite of what is in the consumers’ interest at the end of the day. I hope against hope that more rational voices will prevail on this issue and I look forward to seeing the results of our decision in the time to come.

TPAF:  You’ve worked to cut regulations since you’ve been here. What are the next steps you can take to cut the red tape that might be interfering with broadband deployment?

I don’t know how much time you have (laughing.) There’s a lot of red tape that’s out there, and we’ve been taking a lot of steps. Some of them just don’t make the front pages of the newspapers.

For example, making it easier for companies to gain access to utility poles that is necessary to attach the equipment. That’s an initiative we’ll be voting on this coming Thursday. (The commission approved this measure.) Making it easier for companies to migrate from the copper networks of yesterday that are fading to the highly resilient networks of the future based on things like fiber. That’s another initiative we’ve started. Making sure as much spectrum as possible is out there in the commercial marketplace for companies — especially smaller ones — to be able to provide internet access. And that’s a crucial part of the equation, especially in rural and remote areas where the business case is often hard laying fiber. But a fixed wireless provider or even a satellite provider might be able to provide high-speed access. Those are some of the tools in the toolbox we’ve used.

Additionally, Congress told us that we have to have a Universal Service Fund program, so one of the reforms we’ve initiated that if we’re going to have this federal subsidy program it’s got to be run efficiently. So, we instituted a reverse auction system in which we have competitive bidding for those funds so we drive down prices. We’ve got accountability on the backend so that if we’re cutting a check to a company we don’t simply say “vaya con dios,” we’re requiring them to use those funds to build out infrastructure and there are penalties if they don’t do so in a timely way. So we’re using everything we can within the law to make sure we can promote as much broadband deployment as possible because we recognize, especially in parts of rural America, but across the country internet access is increasingly critical to most aspects of daily life.

TPAF:  We’re both from rural locations, which could really be impacted by these emerging technologies. What does the future hold?

PAI:  We’re excited about it. I come from a rural part of the country too. I’ve been to Cullman (Alabama). It reminds me very much of Parsons, Kansas, in a lot of ways, and we want to make sure that people in those communities aren’t forgotten, even if they don’t seem that prominent compared to the big cities. Nonetheless, there are millions of Americans who are on the wrong side of the digital divide, disproportionately in towns like Cullman. We want to make sure they have just as much opportunity to get online as anybody else does. And it’s not just for streaming Netflix or whatever, we’ve done tours in 33 states, I believe it is, visited precision agriculture where farmers are using technology to grow potatoes and other crops, rural doctors who needed to be able to do telemedicine so there are all kinds of interesting applications in rural America, which is part of the reason we’re so passionate about closing that digital divide.

TPAF:  How do you close that digital divide without putting more taxpayer dollars toward the effort?

PAI:  That’s the key, because as fiscal conservatives we want to make sure that we modernize the regulations to create as strong a business case as possible without public investment. That’s pretty much what we’ve tried to do over the past 18 months —  the initiatives I’ve talked about such as modernizing our rules so that companies don’t have to spend money propping up these copper networks that most people aren’t relying on anymore and instead redirecting that investment to fiber because they think that’s going to benefit the community much better. That’s the kind of regulatory reform we’ve been trying to focus on.

At the end of the day, we all win when we have a light-touch, market-based approach that gives all kinds of companies — big and small — the maximum incentive to invest. We simply don’t have the money to fund the building of networks across the country. It’s just a massive task. Even with the Universal Service Fund those are limited dollars, and we’re trying to stretch them as far as they can go, but at the end of the day it has to be the private sector that takes the lead. We see it as our role to establish the regulatory framework that enables them to take the plunge to build the networks that will connect our communities.

TPAF:  What are the next steps for facilitating the growth of 5G?

PAI:  So, two basic areas there — one is spectrum and the other is infrastructure. With respect to spectrum, we’ve been moving forward very aggressively. We want the United States to be the leader in 5G around the world and innovation and investment doesn’t happen here if the FCC doesn’t move very quickly. So, we’re trying to assert U.S. leadership there by moving on such bands as the 28 GHz and 42 GHz bands, which we will be auctioning this November. These will be the first American 5G spectrum auctions. Next year, in the second half of the year, we are going to be moving ahead on 37, 39 and 47 GHz bands. That’s the high-band spectrum. We’re also taking a look at mid-band spectrum, as well, in the 2.5, 3.5 and 3.7 bands.

I know that a lot of this can seem to the sane, rational person out there as gobbledygook, but at the end of the day what it means is incredibly fast wireless service. Just imagine getting a wireless connection that is 100, if not 1,000 times, faster than what you’re getting now with 4G LTE. It’s incredible to think about some of the applications that 5G can enable, things like virtual reality or the Internet of Things, allowing manufacturers to track their projects or ranchers to be able to track their cattle in real time.

The other piece of it is infrastructure. In a nutshell, 5G spectrum relies on much higher band spectrum, which means the waves don’t travel as far. Because the waves don’t travel as far you need a lot more infrastructure to carry that wireless traffic. So instead of a huge number of cell towers we’re going to see a massive amount of small cells, infrastructure that in some cases you could hold in both hands. We need to make it easier for companies to build that kind of 5G network of the future so we’re updating our wireless infrastructure rules so that a small cell that is the size of a pizza box doesn’t have to go through the same environmental and historic preservation regulatory reviews that a 200-foot cell tower would have to go through. Essentially, we’re tailoring the regulatory burden to the nature of the infrastructure. We are hopeful that by updating the rules we’ll be able to see 5G benefit folks across the country in the time to come.

TPAF:  Congress is now considering the AIRWAVES Act, which is designed to facilitate a national pipeline of spectrum for commercial use. If that is passed and signed into law by President Trump how will it affect future spectrum auctions?

PAI:  Congress is taking a forward-looking view on 5G, as well, and the AIRWAVES Act is an example of that, helping us to take a look at different spectrum bands that could be useful for 5G services, and encouraging us to study them and make them available for auctions if at all possible. That’s one of the areas that I hope by working together in a bipartisan basis with folks in Congress we can move the ball. There are a lot of things that might divide us, when it comes to political issues – even on telecom issues – but I think getting more and faster wireless services out there is something everyone can rally around. Hopefully that bodes well for out future at the FCC and the entire wireless community.

TPAF:  Broadcasters and wireless companies often seem to be at odds. How do you balance the needs of these important entities?

PAI:  We’ve tried to take a more collaborative approach and I think the recent incentive auction we held is an example of that, allowing broadcasters to participate voluntarily in this auction of 600 MHz spectrum, allowing them to share channels, or do other things to enable their 600 MHz to be made available for auction and enabling wireless carriers to bid at the auction on that spectrum. By and large that’s been a pretty smooth transition so far. We’ve allocated most of the wireless licenses at 600 MHz and we’re hopeful that’s the kind of voluntary framework that enables everybody to get something out of it. Wireless companies get more spectrum for wireless services. Broadcasters who participated in the auction got paid for the spectrum rights they previously held, and consumers are better off in terms of faster, cheaper wireless service. Also, taxpayers won. This created nearly $19 billion worth of value for the U.S. Treasury, which isn’t small potatoes by any measure.

TPAF:  What would you like for the FCC to look like in 10 years?

PAI:  My hope is that it would be really focused on looking forward rather than fighting battles in the past. One of the things I’ve noticed here is that the law is static. It represents Congress’ snapshot of the marketplace at a moment in time, and the FCC, being a creature of Congress, ends up litigating all of these battles that might have been current in 1996 or 1992 or 1961 or even 1934 and they can sometimes lose focus on where the marketplace is going as opposed to where it’s been.

So, my hope is that across the different areas where we regulate, our successor — I won’t be here in 10 years — but I hope that whoever is in this seat always has a forward-thinking view. How can we create value for consumers? How can we update our regulations to match the times that we’re in, not the times that we were in decades ago? I can’t anticipate what the new technological challenges are going to be in a decade — this field moves pretty quickly — but I would hope they would have that forward-looking mindset. Everyone is going to be better off — the commission, Congress, and the consumers — at the end of the day.

That’s part of the reason why I’ve established or am seeking to set up an Office of Economics and Analytics. Our hope is that by infusing more critical thinking from the economists who are here at the commission — making sure they have a seat at the table — they can consistently tell us, look, this kind of regulatory approach would impose more costs than benefits on a fast-moving industry or in terms of analytics making sure we have all the data at hand to be able to make wiser decisions for the future.

TPAF:  In your tenure here as commissioner and chairman, you’ve loved to add many pop culture references to speeches and policy documents. Is that an attempt to bring levity to the situation, or why is that important to you?

PAI:  Part of that is to inject a little bit of levity. I love movies and TV shows and popular books and the like. And part of that is to make our decisions more understandable. The FCC’s work can quite often dive straight into the weeds and never leave there, and to the average person reading it you might think “I don’t understand what Part 32 of the Code of Federal Regulations has to do with my life,” but what they do understand is if I can incorporate a quote from The Big Lebowski or The Bachelor or whatever it is might be, that’s something that analogizes the situation to something they can comprehend.

So, it makes it more accessible to a lot of people. I think it’s easy for a regulatory agency like ours to continue doing things the way they’ve been doing them and issue our decisions from up on high and expect everybody else to accept it, even if they don’t understand it. Part of the reason I incorporate the pop culture references is to make it more accessible and part of the reason why I’ve embraced a transparency initiative to publish our decisions before we actually vote — which was a radical reform that started in my second week — was to make sure that people can have more insight into what we’re doing. Essentially, it’s all geared toward making sure that people in my hometown of Parsons, Kansas, those people in Cullman, anyone around the country, can understand in a clear way what it is this agency is seeking to do on behalf of them and their families.

Johnny Kampis is investigative reporter for the Taxpayers Protection Alliance Foundation.

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