ICT, internet and telecom companies are heading into a new era of “light touch” regulation now that Ajit Pai is Chairman of the United States Federal Communications Commission (FCC). Pai has recently made headlines thanks to decision to change the FCC’s stance on net neutrality and broadband regulations championed by his predecessor, Tom Wheeler. “Rules developed to tame a 1930s monopoly were imported into the 21st century to regulate the Internet. It has become evident that the FCC made a mistake,” said Pai at the Mobile World Congress in Barcelona on Tuesday.
The FCC Chairman sat down for an interview with New Europe’s Editor, Alexandros Koronakis on the sidelines of the Mobile World Congress in Barcelona to discuss EU/US relations, and the current, and future of the regulatory landscape.
The US relationship with the EU
Pai was clear that he is an advocate of the United States and European Union and its member states working together on common issues.
“I think there are areas of common ground. For example with respect to infrastructure, all of recognize that the networks of the future will require massive private [capital expenditure] and so I think we’re committed to ease that business case as much as we can.”
The FCC Chair pointed to spectrum as one issue of particular opportunity: “Also with respect to spectrum, I think we all recognize we need to think very creatively about how to apply some of the bands that were previously thought of as unusable for mobile communications and 5G in terms of millimeter wave spectrum for example I’m very hopeful that we can compare notes, so to speak, and find a way forward that benefits both the consumers in our respective region and also the industry.”
Moving forward, there was interest in knowledge exchange from Europe. “The digital divide is one of the things I’m committed to addressing at the FCC and I was very interested to hear that this was an issue in Europe as well. For example, I had a good conversation with one of my counterparts from Portugal and she said that 60 percent of Portuguese citizens were just not connected. These are substantial challenges and I’m really hopeful to be able to find solutions that work for them that could work for us.”
Tom Wheeler is out, Ajit Pai is in
Asked whether we are going to see a very different style of governance of the FCC, Pai was very frank, championing the same characteristics for the institutions as he has done in the past:
“Well I certainly want our style of leadership to be as open and transparent and inclusive as it can be. Also in terms of regulatory philosophy I want the FCC to return to the light touch approach to regulation that it had for two decades previous. You’re taking a holistic view of the marketplace, acting on the basis of real harms that were demonstrated in the record and construing the law in a fair way to make sure that competition and consumer welfare are protected. And that’s the kind of role the FCC would do well to emulate, not just because it reflects our legal responsibilities granted by Congress but also because it would be best for marketplace consumers.”
Responding to accusations made by Wheeler that Pai would repeatedly turn down meeting requests by the former FCC Chair, Pai was forthcoming: “All I can say is that the accusation wasn’t true and that I wish the former chairman very well in his future endeavors.”
Net Neutrality takes a back seat
Pai’s “light touch” is a complete reversal of policy from Obama’s FCC, when the body passed the Net Neutrality Order and implemented strong regulations against conglomerate rule. During his four year term as Republican commissioner on Obama’s FCC board, Pai repeatedly spoke out against the regulations and as being obstacles to progress. Now that he’s at the helm, he can finally put his policies into practice.
“The core value that all of us agree on is that there should be a free and open internet and the dispute is only as to which particular regulatory or legal framework secures that value. We’re actively taking a look at what that framework should be. I’ve long said that the Clinton administration consensus in the mid-1990s with the dawn of the commercial internet was a successful one. $1.5 trillion dollars was spent in the two decades after that as a result of that consensus and that’s the kind of model that I think would ultimately would be better for consumers,” Pai said.
But pressure groups have voiced concerns about moving backwards on net neutrality. While zero-rating is seen as a pro-consumer possibility, other concerns for the free and open access to the Internet have been expressed.
“I don’t think that the political attacks from groups like that are worth responding to. I do want to focus on is the practical reality which is that broadband is very difficult to deploy, and millions of Americans are currently without it. I’m committed to using whatever tools the FCC has in the toolbox in order to make business case for deployment as easy as it can be. That’s something that I think Americans will appreciate much more than the ‘inside the Beltway’ political debates that are all too common.”
When asked if this framework would keep the best interests of citizens in mind, Pai answered with a resounding yes.
Ringing the broadband bells
Pai’s ambitious plans – 5G networks, broadband and 4G LTE everywhere, the nurture of tech hotspots outside of Silicon and gigabyte opportunity zones – will challenge the efficacy of his “fresh,” adaptable FCC.
“The FCC is thinking ahead and trying to balance all interests instead of reflexively saying this is infrastructure we’re going to apply yesteryear’s rules no matter what,” said Pai.
The independent agency is already hard at work. Just last week, it adopted a plan that would deliver $4.5 billion in subsidies through an auction to carriers to build up 4G LTE in poorly connected areas of the U.S., and an extra $2 billion to build up broadband.
Pai’s pet project, the gigabyte opportunity zone “would also forgive the payroll taxes on the employers side for entrepreneurs who want to set up companies in those areas. My hope is by building on the concept on what were formerly known as enterprise zones, we can incentivize the construction of networks in some of those rural areas and give companies who want to take advantage of those networks reason to do so,” Pai explained.
Talks with members of Congress are currently underway to get the ball rolling on the initiative. “It’s obviously going to require both houses of Congress to agree and the President but it’s something that I think would resonate with a lot of Americans,” he said.
With this infrastructure-heavy approach, the question about whether there will be sufficient demand is an important one, but Pai is unfazed: “I think there is tremendous demand. One of the great things about this job is that I get to travel around the country and visit with people who are affected by our policies and I have yet to hear anybody say, “I want slower, worse Internet!” They all seem to want the opposite of that.
I also have been able to see some of the entrepreneurship spring from places that you wouldn’t expect: Sioux Falls, San Diego, Reno, Nevada, Kalamazoo, Michigan. You wouldn’t think of these in the same way you would think of Silicon Valley, but unless you have entrepreneurs there creating value, creating jobs, building on ideas they had precisely because they can count on Internet connectivity.”
Internet for all, but not quite EU style
The EU Commission President, Jean-Claude Juncker, announced during his last State of the Union address that the EU would implement free access to the Internet in all public places. While Pai was taken by the idea, he was hesitant to shift the cost to the taxpayer, but welcomed existing experiments for public internet: “People are experimenting with different ideas. In New York City for example, I had the opportunity to meet with a team that is pioneering what they call “LinkNYC,” essentially taking payphones because no one uses payphones anymore and transforming them into WiFi hotspots. That’s one of the ideas they’ve had to take a fading infrastructure, transform it and make it available for people to use,” Pai explained, concluding that “I’m open to any and all ideas that might bring connectivity to people in a way that’s affordable.”