Outgoing FCC Chair Ajit Pai Praised By Industry Organizations

Above photo: FCC Chairman Ajit Pai testifies during a Senate Commerce, Science and Transportation committee hearing on June 24, 2020. AP.

NOTE: It is no surprise the telecoms loved Ajit Pai, a former Verizon lawyer. He took the chairman’s position with a clear agenda to gut any regulations that impaired the telecom’s ability to profit despite what the evidence showed and what the public supported. The hashtag #PaiLies became popular during his four years. No doubt, he will be rewarded well. I interviewed Josh Stager of Free Press a few weeks ago on Clearing the FOG about the damage done by Pai.   – MF

Trump-appointed FCC Chairman Ajit Pai, who said Monday he will depart the commission on Jan. 20, leaves behind a controversial legacy: He’s regarded as either an exemplary change agent or an ideologue who forfeited consumer interests for commercial ones.

To cable, telecommunications and consumer-electronics companies, Pai has been a model of transparency and a champion of free markets who cut away outdated regulations and laid the groundwork for the expansion of broadband to millions of Americans.

To critics, Pai’s four years atop the FCC marked a failure to uphold the agency’s mandate. Consumer advocates say Pai not only infamously repealed the agency’s net neutrality rules — in the face of widespread public support for regulations barring internet service providers from discriminating in how they treat traffic from content providers — but he also failed to bridge the “digital divide” that exists in the U.S.

Free Press, a consumer-advocacy group, blasted Pai’s statement announcing his departure as a self-congratulating end to “his disastrous FCC run.”

“The entire premise of Pai’s failed chairmanship is a lie: He claims that his radical deregulatory agenda spurred broadband improvements and closed the digital divide. None of these claims are remotely true,” said Matt Wood, Free Press VP of policy and general counsel.

According to Free Press, nearly 80 million Americans still lack access to “adequate broadband” at home, with communities of color disproportionately affected. “That gaping digital divide remains, and Pai’s done nothing to close it — even during the ongoing pandemic that’s made essential internet connections that much more vital,” Wood said.

Josh Stager, senior counsel at progressive think tank Open Technology Institute, also criticized Pai’s chairmanship at the FCC as a “disaster, particularly for the open internet,” arguing that the agency “has fully abdicated authority to oversee broadband providers.”

“There’s a basic consumer-protection mission that every FCC chairman has, and Chairman Pai has utterly failed to do that,” Stager said. “It’s the past year during the pandemic that brings his work into stark relief. He’s been asleep at the wheel. The internet has become central to social and business life — and we’ve seen virtually nothing from this FCC to address that, despite breathless press releases.”

Standing in stark contrast to Pai’s critics are plaudits for the outgoing chairman from industry trade organizations. Some excerpts:

  • Cable trade group NCTA president/CEO Michael Powell: “We commend Chairman Pai for his exceptional stewardship of the Federal Communications Commission. He set a clear vision for his tenure and the industry and pursued it with purpose, transparency, scholarly rigor and courage… His strong leadership at the FCC during a time of quickly changing communications technologies ensured that America remained a global internet, communications and entertainment leader.”
  • Broadcasting industry trade group NAB president/CEO Gordon Smith: “Chairman Pai has been a champion of free and local broadcasting since he joined the FCC. His fair, thoughtful approach to regulation led to many common-sense reforms that were long overdue.”
  • Consumer Technology Association president/CEO Gary Shapiro: “Chairman Pai is an advocate for innovation, and we thank him for his strong leadership at the helm of the FCC. Through his commitment to closing the digital divide — from advancing 5G deployment to providing access to White Spaces — Americans have greater access to broadband, especially in rural and underserved communities.”
  • USTelecom president/CEO Jonathan Spalter: “Throughout his tenure, and never more so than during these challenging days of the pandemic, Chairman Pai has prioritized bridging the digital divide and connecting all Americans everywhere to 21st century communications networks.”

Pai is due praise for long-overdue process reforms at the FCC, said Berin Szóka, president and founder of think tank TechFreedom. “The Pai FCC is the most transparent FCC that we’ve ever had. He deserves a lot of credit for changing the agency’s culture,” he said.

Under Pai, the FCC also unlocked a large amount of wireless spectrum for new broadband services. The commission ran five spectrum auctions and two rural broadband reverse auctions, and it also opened up 1,245 megahertz of mid-band spectrum for unlicensed use. In addition, the FCC pushed to block illegal robocalls and designated 988 as the three-digit number for the National Suicide Prevention Lifeline.

Pai’s greatest failure, according to Szóka, was that the FCC chairman didn’t even try to encourage Congress to pass legislation to resolve the net neutrality fight. “Everybody knows the next chairman will just reverse that,” Szóka said. With President-elect Joe Biden set to take office in January, Democratic commissioner Jessica Rosenworcel is the leading candidate to succeed Pai as chair of the FCC. A Democrat-controlled commission is expected to reinstate the FCC’s net neutrality rules.

“If you really think net neutrality is in jeopardy today without FCC rules then the only way to ensure that problem doesn’t arise again in future GOP administrations is through a binding form of legislation,” Szóka said. “Until then we can’t have a meaningful discussion about any other telecom issue.” That includes how to fund universal broadband going forward. Currently, the U.S.’ Universal Service Fund “is the most regressive way to fund telecommunications ever,” Szóka said.

As chairman, Pai enjoyed solid industry support over his deregulatory moves. In particular, broadband providers backed the FCC’s rollback of the agency’s 2015 Open Internet Order, which reclassified internet service as a Title II utility (akin to telephone service). The Obama-era order relied on Title II to justify the FCC’s authority to regulate the internet — but it potentially left the door open for the agency to enact more far-reaching regulations, including price controls, despite wording in the order promising that future commissions wouldn’t do that.

ISPs complained they faced regulatory uncertainty with broadband classified as a Title II service, and alleged that it reduced their incentive to build out broadband networks.

But over the past four years, the increase in broadband speeds and coverage were mostly tied to buildout plans ISPs made during the Obama administration, Free Press’ Wood contended. Specifically, 92% of of Pai-era fiber deployments came from projects announced during 2015–16. Moreover, Wood said, broadband prices are increasing, in part due to Pai decisions like his approval of T-Mobile’s acquisition of Sprint — a deal opposed by several state attorneys general as reducing competition and consumer choice.

What happens next at the FCC is up in the air. Along with Pai, Republican commissioner Michael O’Rielly is exiting the FCC at the end of 2020 because Trump declined to nominate him for another term after O’Rielly expressed doubt about the legality of the president’s order directing the FCC to explore how to interpret Section 230 to regulate social-media companies. Pai, less than a month before the election, opened a rulemaking proceeding on Section 230 in accordance with Trump’s order — drawing condemnations for what critics said pushes the FCC beyond the scope of its authority. In that case, “Pai allowed the agency to be politicized,” OTI’s Stager said.

Trump has nominated Nathan Simington, previously a senior adviser at the National Telecommunications and Information Administration, to replace O’Rielly. If the Senate confirms Simington (which is uncertain, observers say) that could deadlock the FCC at 2-2. If that happens, Senate Majority Leader Mitch McConnell could move to block a Biden appointee to the FCC in order to stymie the incoming White House’s agenda.

Even once the Democrats have a majority at the FCC, it would take about a year to reinstate the 2015 net neutrality order, according to Szóka. In any event, the issue will remain a political football; GOP Sen. Ted Cruz, for example, once called net neutrality “Obamacare for the Internet.”

“If you get a consensus-builder [as FCC chair], that effort stands a much better chance of succeeding,” Szóka said. “If Republicans think they can blow off Democrats [over net neutrality] because they believe they can pick up seats in the midterms, it won’t work.”