The nation watched President Trump take the oath of office last Friday. On the same day, but to considerably less fanfare, it was widely reported that President Trump would appoint Commissioner Ajit Pai as Chairman of the FCC. It became official on January 23, 2017.
Chairman Pai is joined by current Commissioners O’Reilly (a Republican) and Clyburn (a Democrat). The Republican majority should make it easier for Chairman Pai to quickly act on his priorities.
What are his priorities? To get a sense, we examine then-Commissioner Pai’s public statements in several high-profile – and sometimes contentious – FCC proceedings.
What has the FCC Done? In 2015, the FCC adopted Net Neutrality rules that prohibit Internet Service Providers (ISPs) from blocking access to legal content; throttling, impairing or degrading lawful traffic; and favoring some lawful Internet traffic over other lawful traffic in exchange for consideration. As part of these rules, the FCC reclassified high speed Internet access service (broadband) as a ”telecommunications service” subject to Title II of the Communications Act. Commissioner Pai was a vocal critic of these rules before they were finalized.
What Did Pai Say Then? A few weeks before the rules were adopted, Commissioner Pai released a “Fact Sheet: President Obama’s Plan to Regulate the Internet,” challenging the FCC’s ability to adopt its rules. He then released a scathing dissent once the rules were adopted, arguing that the new rules would result in consumers paying a higher rate for slower Internet service with fewer choices of ISPs.
Excerpt from Pai’s Statement: “To paraphrase Ronald Reagan, President Obama’s plan to regulate the Internet isn’t the solution to a problem. His plan is the problem.”
What Has Pai Said Since Then? Commissioner Pai believes that Title II regulation of the Internet led to decreased investment in broadband infrastructure and has harmed consumers by restricting service plan offerings for mobile devices. Since President Trump’s win in November, Commissioner Pai has said net neutrality’s “days are numbered.”
Prognosis: Modifying the Net Neutrality rules at the FCC will be a resource-intensive effort. It will require the Commission to issue a comprehensive notice of proposed rulemaking and develop a substantial record demonstrating why the FCC should deviate from the public interest findings that led to the adoption of the original rules. It is quite possible that Congress will intervene to scale back the scope of these rules. In the near-term, it is possible that the FCC will take a relaxed enforcement approach and adopt a more expansive exemption from the enhanced transparency rule.
What has the FCC Done? Unlike the Net Neutrality rules, Commissioner Pai and his Democratic colleagues have generally agreed that additional spectrum should be made available to private enterprises. President Obama committed to making 500 MHz of federal and non-federal spectrum available for mobile and fixed wireless broadband use, and the FCC subsequently issued a Notice of Inquiry to identify spectrum bands above 24 GHz that could support consumer broadband services.
What Did Pai Say Then? Commissioner Pai was supportive of these efforts, but encouraged the FCC to do more to promote infrastructure deployment.
Excerpt of Pai’s Statement: “Last year, I laid out my vision for a regulatory framework that will ensure our wireless leadership continues into the 5G future. In addition to opening up these spectrum bands, that plan includes removing the barriers to infrastructure deployment. That means completing our small cell proceeding. That means pressing ahead on the IP Transition. And that means giving providers large and small the maximum incentive and flexibility to invest in fiber and other building blocks of tomorrow’s networks.”
What has Pai Said Since Then? Commissioner Pai believes the federal government controls too much spectrum.
Prognosis: We expect Chairman Pai’s FCC to continue looking to make additional spectrum available for private enterprises. We also expect him to take it a step further and promote rules to enable more efficient infrastructure deployment.
Telephone Consumer Protection Act.
What has the FCC Done? The TCPA generally prohibits unwanted robocalls, telemarketing calls, and unsolicited fax advertisements. In 2015, the FCC released a Declaratory Ruling and Order to clarify various aspects of its TCPA rules, including wireless number reassignment and the ability of consumers to revoke consent to receive robocalls.
What Did Pai Say Then? Commissioner Pai dissented from the FCC decision, arguing that the FCC should more aggressively enforce its rules and enable carriers to block spoofed calls.
Excerpt from Pai’s Statement: “We could be taking aggressive enforcement action against those who violate the federal Do-Not-Call rules. We could be establishing a safe harbor so that carriers could block spoofed calls from overseas without fear of liability. And we could be shutting down the abusive lawsuits by closing the legal loopholes that trial lawyers have exploited to target legitimate communications between businesses and consumers.”
What has Pai Said Since Then? He has argued that trial lawyers have “twisted the [TCPA’s] words to target useful communications between legitimate businesses and their customers,” resulting in the TCPA “becom[ing] their ATM.”
Prognosis: We expect robocalling and TCPA issues to remain on the FCC’s front burner, but also expect the agency’s Enforcement Bureau to take a more aggressive approach to investigating potential violations of these rules.
Broadband Privacy Rules.
What has the FCC Done? In October, the FCC adopted a comprehensive set of rules to protect the confidentiality and security of information that broadband internet service providers (ISPs) acquire from customers. The rules (among other things) require ISP’s to obtain opt-in consent from consumers to share and use sensitive information like geo-location, financial information, children’s information, and the content of communications, as well as the use and sharing of non-sensitive information is subject to opt-out consent. The rules apply to providers of broadband Internet access service but not online content providers, search engines or social media platforms (“edge providers”).
What Did Pai Say Then? Commissioner Pai disagreed with the FCC’s rules, arguing that the new rules disproportionately burden ISPs because the requirements are more prescriptive and burdensome than rules governing edge providers.
Excerpt from Pai’s Statement: “… since the beginning of this proceeding, I have pushed for the Federal Communications Commission to parallel the FTC’s framework as closely as possible. I agreed with my colleague that consumers have a ‘uniform expectation of privacy’ and that the FCC thus ‘will not be regulating the edge providers differently’ from ISPs. … I was disappointed—but not surprised—when FCC leadership circulated an Order that departed so dramatically from those principles.”
Prognosis: Numerous parties filed Petitions for Reconsideration of the Broadband Privacy Rules, urging the FCC to reconsider various aspects of these rules (or, in many cases, arguing that the rules should be repealed). These pending petitions provide a vehicle for a Republican-led Commission to walk-back many aspects of the controversial decision in relatively short order.
Connect America Fund Phase II Reverse Auction.
What has the FCC Done? The FCC modernized its universal service regime to offer financial support to entities willing and able to provide voice and broadband service in high-cost areas that currently lack such services. Support was originally made available to price-cap carriers on a statewide basis. The price cap carriers accepted over $1.75 billion in annual funding, leaving approximately $215 million in annual funding available for the CAF II reverse auction. The FCC released a Report and Order and Further Notice of Proposed Rulemaking in May 2016 resolving many issues and requesting comment on how to weight bids focusing on technologically neutral download speeds and latency metrics for the planned single, multi-round CAF II reverse auction
What Did Pai Say Then? Commissioner Pai supported the Commission’s actions, and only wished the FCC had moved faster and incentivized providers to offer better service in rural America.
Excerpt from Pai’s Statement: “To be sure, I don’t agree with every aspect of this Order. For example, I had hoped to follow through much more quickly on our five-year-old promise to adopt these competitive bidding rules. And I would have preferred to give bidders even more flexibility and incentive to offer the very best service possible to rural America. But that is the nature of compromise….”
What has Pai Said Since Then? One of Commissioner Pai’s main goals has been to promote broadband in rural areas. He grew up in Kansas and has recognized hurdles to broadband deployment in rural America, including West Virginia, Iowa, and other underserved parts of the country. He recently proposed a Digital Empowerment Agenda to promote broadband adoption in rural areas.
Prognosis: Chairman Pai will have the opportunity to support deployment of broadband in rural America by leading the Commission in adopting rules for the CAF II reverse auction. We expect this to be one of his main priorities.