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Trump’s FCC Pick Doesn’t Bode Well For Net Neutrality

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President Donald Trump has tapped Ajit Pai, the Federal Communications Commission’s senior Republican member, to head the regulatory agency. The appointment, announced by the FCC today, does not require congressional approval since Pai is already an FCC commissioner.

Pai replaces Tom Wheeler, who announced last month that Inaugeration Day would be his last with the FCC. His departure gave Republicans a two-to-one majority in the FCC.

Pai, who has served as an FCC commissioner since 2012, will likely set a very different agenda than his predecessor. The former Verizon lawyer and Justice Department employee favors a more hands-off role for the FCC. He opposed most of the agency’s major reforms during his tenure, including the sweeping net neutrality regulations passed in 2015, as well as the agency’s more recent broadband privacy protections and the now delayed and likely dead cable box reforms. Now the new Republican-led FCC will likely work to roll back much of the previous administration’s accomplishments.

“We need to fire up the weed whacker and remove those rules that are holding back investment, innovation, and job creation,” Pai said at an event sponsored by the free market think tank Free State Foundation in Washington, DC, last month.

Net Neutrality No More

The agency’s net neutrality rules, which re-classified internet service providers as “Title II” common carriers similar to utility providers, are amongs the rules Pai hopes to whack. “On the day that the Title II Order was adopted, I said that ‘I don’t know whether this plan will be vacated by a court, reversed by Congress, or overturned by a future Commission. But I do believe that its days are numbered,’” Pai said at the Free State Foundation event. “Today, I am more confident than ever that this prediction will come true.”

But even with a majority, FCC Republicans might not be able to easily turn back the clock, Wheeler argued in a farewell speech earlier this month. “The effort to undo an open Internet will face the high hurdle, imposed by the Administrative Procedure Act, of a fact-based showing that so much has changed in just two short years that a reversal is justified,” he said.

In that regard, the Republican-dominated congress will likely be a bigger threat to net neutrality regulations and other existing FCC powers. The GOP has been working to kill the FCC’s net neutrality rules since before they were even passed by the agency.

Major Mergers

Meanwhile, It’s not yet clear what Pai’s chairmanship will mean for AT&T’s proposed acquisition of Time-Warner. Trump opposed the merger on the campaign trail, but Pai is generally more friendly to industry consolidation. He voted against the agency’s approval of Charter’s acquisition of Time-Warner Cable (a separate company from Time-Warner Inc), but only because he believed the merger agreement placed too many restrictions on Charter. “It’s about imposing conditions that have nothing to do with the merits of this transaction,” Pai told The Hill last year. “It’s about the government micromanaging the internet economy.”

At first blush, Pai’s more hands-off approach to the FCC fits nicely with the new administration’s broader agenda. Multichannel News reported earlier this month that the Trump administration favors a plan to massively restructure the FCC and remove many of its functions. Mark Jamison, a former Sprint regulatory policy manager who was part of Trump’s FCC transition team, argued in an essay last year that the FCC had largely outlived its usefulness. “Most of the original motivations for having an FCC have gone away,” Jamison wrote. “Telecommunications network providers and ISPs are rarely, if ever, monopolies. If there are instances where there are monopolies, it would seem overkill to have an entire federal agency dedicated to ex ante regulation of their services.” Downsizing the FCC would dovetail with a plan reported last week by The Hill to cut federal spending by $10.5 trillion over 10 years.

But Pai’s agenda includes more than just slashing existing regulations. In a report published in September of last year, Pai outlined an agenda that includes tax breaks for startups and rural broadband providers; using money from wireless spectrum auctions to expand wireless access in rural areas; “dig once” policies that would ensure that broadband conduits are installed as part of all road and highway construction projects; and regulations to make it easier for new internet service providers to access existing utility poles. It’s not clear how this agenda would square with the more radical ideas apparently floated by the transition team.

Still, Pai’s appointment signals that major changes are coming to the FCC—and possibly the way the internet itself works in the US.

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