FCC

FCC's Pai: Regulatory Torch Passes to Light-Touch Generation

Tells international audience Title II reclassification was mistake on the road to being fixed 2/28/2017 1:30 PM Eastern

FCC Chairman Ajit Pai told a World Mobile Congress audience in Barcelona Tuesday (Feb. 28) that Title II reclassification was a mistake made under the previous generation that he expects to be corrected in this one.

He signaled to the international audience that the FCC would not be a zero reg zone, but light-touch reg zone  where pro-competition policies were promoted, barriers lifted, and investments made in deploying broadband.

According to a copy of his speech, Pai told his audience that in the 1990's policymakers had forged a "historic concensus" that the Internet should be free of heavy handed regulation, which is what spurred innovation, the kind of environment that would be needed to spur 5G in the coming years.

But he said that two years ago--two years ago this week, in fact--the nation "deviated from our successful, light-touch approach," deciding instead to "apply last-century, utility-style regulation to today’s broadband networks."

That was the reclassification of ISPs as common carriers.

He said that was not done to solve any problems in the face of a "digital dystopia." Instead, he said, that previous light-touch approach "had produced both a free and open Internet and strong incentives for private investment in broadband infrastructure."

Pai said that Title II move was clearly a mistake, injecting uncertainty into the market, which he called the enemy of growth.

But evoking John F. Kennedy, the Republican chairman said that "today, the torch at the FCC has been passed to a new generation" he said was dedicated to renewal as well as change, and said it was "on track" to return to the pre-Title II approach.

He cited as evidence his ending of the investigation into zero-rating plans. The FCC had signaled under Tom Wheeler that at least a couple of those plans--DirecTV Now and Verizon's FreeBee Data 360, likely ran afoul of the Title II based rules Pai is aiming for. The FCC under Pai has rescinded that finding, saying it has no force and sets no precedent. Pai also ended the general inquiry into zero rating plans.

"Free-data plans have proven to be popular among consumers, particularly those with low incomes, because they allow consumers to enjoy content without data limits or charges," Pai told the audience. "They have also enhanced competition. Nonetheless, the FCC had put these plans under the regulatory microscope. It claimed that they were anticompetitive, would lead to the end of unlimited data plans, or otherwise limit online access. 

But the truth is that consumers like getting something for free, and they want their providers to compete by introducing innovative offerings."

He said rescinding the earlier decision "simply respected consumers’ preference."

Critics of the plans say they allow companies to favor their own content, or those of content owners with larger wallets, over smaller, independent providers.

Pai suggested the proof of the pudding was in what happened next. "In the days following our decision, all four national wireless providers in the United States announced new unlimited data plans or expanded their existing ones. Consumers are now benefiting from these offers—offers made possible by a competitive marketplace. And remember:  Preemptive government regulation did not produce that result. The free market did."

Pai made it clear that zero rating plans would likely get no pushback from his FCC going forward.

"Going forward, the FCC will not focus on denying Americans free data or issuing heavy-handed decrees inspired by the distant past."

Pai cited a Kennard as well as a Kennedy in his speech. " As one of my predecessors, former FCC Chairman Bill Kennard, put it in 1999: “The Internet is really blossoming, but some policy-makers and politicians want to control it and regulate access to it,'" he said. "We should not try to intervene in this marketplace. . . .

[I]n this space, it’s very difficult to mandate openness in a regulatory manner.”  In my view, Chairman Kennard was not just practical, but prescient."

But Pai said his would not be a zero reg FCC. "[A] marketplace that isn’t competitive doesn’t serve consumers well." That will include light-touch regs backed by principles of competition law, he said, and investing in broadband deployment."

In short, America’s approach to broadband policy will be practical, not ideological.  We will embrace what works and dispense with what doesn’t," he said.

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