Tag Archives: pai

FCC chair Pai sounds smarter when he’s not the smartest guy in the room

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Once he left the big stage at the Mobile World Congress Americas in San Francisco last week, Federal Communications Commission chairman Ajit Pai walked a couple of blocks to an event put on by the Lincoln Network, a Silicon Valley political club with a libertarian outlook. It was a much smaller stage, but he seemed completely at home in a room full of smart people – some even smarter than him – who would rather let the market sort things out than to try to fine tune the Digital Age using the blunt, mindless tools of government.

The moderator, tech journalist Ina Fried, asked Pai what does ideal regulation look like?

Ideal regulation is regulation that solves a market failure, regulation that creates a competitive market place that otherwise would not exist but for those rules. That’s part of the reason why I consistently say…what is the problem we’re trying to solve? And do the costs of this regulation outweigh the benefits?…What are the impacts of the rule? Is the rule solving the market failure, and if not we could have unintended consequences that could actually disincentivise investment or distort the market place in ways that wouldn’t serve consumers. How do you measure the cost and benefits? So those are some of the things I think about. And so that’s why I don’t really like the term deregulation or hyper regulation. Simply, in my view at least, the goal is to make sure our goals are tailored to the market place that exists in 2017.

Pai has a coherent philosophy of political economy and a sense of right and wrong: without it, he wouldn’t have broken with FCC tradition and political expediency and begun publishing draft decisions weeks before commissioners vote, instead of weeks afterwards, as his predecessors did. If he can hold onto his values and seek facts beyond those shovelled by the lobbyists and lawyers that slither through the halls of the FCC, there’s hope of rational decisions ahead.

If.

U.S. mobile show reboots with international scope and brains. Mostly

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Rebranding and a return to San Francisco has reversed CTIA’s slide into trade show oblivion. Now known as the Mobile World Congress Americas and run by GSMA, the outfit that puts on the Mobile World Congress in Barcelona in February, the show is drawing a more international crowd and a better class of speakers. Or at least speakers that are living up to MWC’s standards.

The first keynote yesterday featured Carlos Slim Domit, the chairman of America Movil, which is the largest mobile telecoms company in Latin America, and the fourth largest in the world. He talked a little bit about his company and a lot about the road ahead in Latin America, where mobile telecoms are taking on a central and growing role in everyday life, and where carriers are struggling with ever increasing demand for bandwidth on the one hand, and a deep digital gulf that mirrors social divisions on the other.

Slim was followed by Ajit Pai, the chairman of the Federal Communications Commission. His speech didn’t break any news, but it was a lucid overview of the issues the FCC is taking on this year, with a focus on mobile topics in general and spectrum availability in particular.

It was a welcome contrast to recent CTIA keynotes, which over the past few years featured elaborate marketing videos accompanied by increasingly junior executives grinning their way through vapid scripts that might have been written by Mister Rogers. As if to remind us how good we have it now, CTIA president Meredith Attwell Baker briefly took us back to the bad old days with a third grade-level, walk-about-the-stage presentation complete with pictures of puppies.

The new MWC Americas show owes a lot to its roots. In Europe, speakers are expected to offer whatever wisdom they can about the topic at hand, rather than deliver tacky sales pitches or smarmy presentations. The show still has one major problem, though: head to head competition with Apple’s annual fall launch event. It’ll never win that fight, particularly since next year’s show is the same week (although they’re moving it to Los Angeles). Even in the press room, where one might expect live streams from the conference program, the video display was stuck on an endless replay of Tim Cook and friends.

FCC chair needs to upgrade his competitive thinking

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For a smart guy, Federal Communications Commission chairman Ajit Pai can be awfully obtuse at times. Particularly where telecommunications competition is concerned.

On the one hand he extolls its virtues, saying to a Pittsburgh audience last week that “a competitive free market is crucial to unleashing private-sector ingenuity”. Just so. But in that same speech, he endorsed giving government subsidies to incumbent telephone companies, called for less regulation of those monopolies and ripped the idea that spending money on building competitive infrastructure or supporting new competitors has any value.

You can’t have it both ways. To get from the current model of broadband service – monopolies with deteriorating infrastructure in rural areas and equally predatory duopolies in cities and suburbs – to a free market, competitors have to be nurtured. Otherwise, the only way to ensure access to modern service at affordable and economically justifiable rates in a failed market is via the poor substitute of regulation.

Pai is correct in favoring “light-touch” regulation over the heavier kind, and he seems to prefer no regulation at all. That’s fine too. If there’s sufficient competition to make a free market function.

You can find competition in the mobile broadband industry. The recent return of unlimited data plans is a good example of competitive forces at work. But four national mobile carriers compete for your business.

If there was only one mobile carrier with a national footprint plus one with urban/suburban coverage, you’d have a choice between an mid-speed, mid to high cost plan and a fast, expensive one, as you do with wireline telephone and cable company offerings, respectively. Unless you lived in a rural area where you’d either have nothing at all or slow and expensive service, depending on how the monopoly carrier’s profit maximisation calculations came out.

Rural monopolies and urban/suburban duopolies are the product of more than 100 years of public policy that delivered subsidies, including money and privileged access to public right of ways, to select, regulated cable and telephone companies. The regulation largely ended, but the rents – cash and in kind – continue, and U.S. broadband customers continue to pay the price of monopoly.

Pai needs to understand that if you subsidise something, you get more of it. If he continues to subsidise monopolies and dismiss bona fide competition, costs will continue to rise, and the gaps between the have and have not communities, and between the U.S. and other developed nations, will widen.

Give me the money, then I’ll give it to AT&T says Pai

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In his “first major policy address” as chair of the Federal Communications Commission, Ajit Pai urged congress to channel broadband infrastructure spending through him. Pai spoke at Carnegie Mellon University in Pittsburgh yesterday, and focused almost entirely on broadband, with particular emphasis on the mobile variety.

Broadband infrastructure is at the top of his policy agenda. If congress decides to fund it, Pai thinks that the FCC should run the program and channel the money through its existing, incumbent-centric subsidy programs

Any direct funding for broadband infrastructure appropriated by Congress as part of a larger infrastructure package should be administered through the FCC’s Universal Service Fund (USF) and targeted to areas that lack high-speed Internet access…

…our track record is frankly better than that of other agencies. The 2009 stimulus bill gave direct funding for broadband deployment to both the Commerce and Agriculture Departments. The Government Accountability Office found that many USDA projects were delayed and dozens wound up being cancelled altogether. Indeed, one profile of the USDA program used the headline “Wired to fail.” And the Commerce Department’s program fared no better—indeed, it’s best known for duplicating existing networks in Colorado and wasteful spending in West Virginia.

Incumbent telephone companies nearly always have first dibs on universal service fund money. To get it, they have a low performance bar to clear. The benchmark for the Connect America Fund program is 10 Mbps download and 1 Mbps upload speeds, for example, and there’s no requirement that they build or upgrade infrastructure beyond the absolute minimum needed. For AT&T, that can mean yanking out wireline networks and replacing them with fixed wireless access points bolted onto existing cell towers.

At this point, though, there’s no money on the table. A $20 billion broadband infrastructure program – run through the commerce and agriculture departments, as it happens – has been floated by U.S. senate democrats but not yet drafted into bill language and not likely to get far in a republican majority congress.

FCC is still the privacy police, even without common carrier rules

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Ajit Pai steered away from discussing the plans, or at least the intent, he has to roll back the Federal Communications Commission’s classification of broadband as a common carrier service during his first congressional appearance as chairman yesterday. But he did indicate that the FCC might not be washing its hands of all responsibility for regulating what Internet service providers do with private customer information.

His appearance in front of the U.S. senate’s commerce, science, and transportation committee came two days after he met with Donald Trump and a day after the news broke that the president had re-appointed him to another five year term on the commission. Pai’s first term expires in June, although he could have kept his seat for another year and a half, or until someone else was appointed to take it. Trump can name someone else to the chair’s job anytime he pleases, but right now the way to bet is that Pai will keep it for the next four years.

According to reporting by Amir Nasr in Morning Consult, Pai told the committee that the FCC’s responsibility to oversee ISP privacy practices comes directly from federal law and does not depend on the FCC’s 2015 common carrier – aka network neutrality – decision…

Senate Commerce Committee Chairman John Thune (R-S.D.)…today asked Pai what would happen if the FCC’s rules “suddenly went away,” and if the FCC would still be “obligated to police broadband privacy practices under Section 222 of the Communications Act?”

“That’s correct, carriers would still have their obligations under Section 222 in addition to other federal and state privacy data security and breach notification requirements,” Pai responded.

In the prepared statement that kicked off his testimony, Pai rehashed the talking points he’s been pushing in recent speeches to industry groups – more broadband deployment, fewer nitpicking rules for telecoms companies to follow and greater transparency in the FCC’s decision making process.

Love or hate his agenda, but Pai makes good on transparency pledge

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Less than six weeks into his term as chairman, Ajit Pai is making significant, and welcome, reforms to the way the Federal Communications Commission does business. There’s plenty of room to take issue with the substance of some of the decisions that the new republican FCC majority has made, or plans to make, but the way it’s going about doing it is far more transparent than past practices were, including particularly those of recently departed chairman Tom Wheeler.

In the past, draft FCC decisions were kept secret, at least from the public. Well-heeled lobbyists always seemed to know what was in the works, and sometimes knew more than commissioners themselves. When democrats had control, Pai complained bitterly about Wheeler’s secrecy, and now he’s resisted the temptation to claim that power for himself.

For the first time in my memory, we know the details of all six of the major decisions that the FCC will be considering at its next meeting on 23 March 2017. Along with the tentative agenda, the FCC published the drafts last week. The language could change over the next three weeks and, unlike the California Public Utilities Commission, the FCC can still make and vote on major changes without disclosing them ahead of time, but at least we have a good idea of what those decisions will be.

Pai hasn’t been 100% squeaky clean and transparent. He was rightly ripped by democratic commissioner Mignon Clyburn for a Friday news dump, when he scrapped several orders and actions taken in the waning days of the Obama administration, including an enquiry into mobile carriers’ zero rating practices and a white paper that laid out a broadband development road map. But on the whole he’s keeping his promise to shine more light onto the murky deliberations and dealings at the FCC and he deserves credit for it.

FCC dismantles itself along with common carrier broadband rules

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The common carrier rules imposed on Internet service providers in 2015 are now being peeled back a slice at a time by a very different Federal Communications Commission. On Thursday, the FCC voted on party lines to exempt ISPs with 250,000 or fewer subscribers from consumer transparency rules, and on Friday chairman Ajit Pai said that consumer privacy rules would be either put on hold or scrapped by the end of this week. Both the privacy and the transparency rules are descended from the 2015 common carrier decision.

The lone democrat on the commission, Mignon Clyburn, claims that the “smaller broadband providers” that are getting a pass on consumer transparency rules are actually the big incumbents

Many of the nation’s largest broadband providers are actually holding companies, comprised of many smaller operating companies. So what today’s Order does, is exempt these companies’ affiliates that have under 250,000 connections by declining to aggregate the connection count at the holding company level.

Pai’s decision to roll back the privacy rules appears to be his first meaningful step toward handing over some of the FCC’s responsibilities to the Federal Trade Commission, which has general responsibility for consumer protection and also has a court-recognised role in policing cyberspace. The FCC’s Friday press release points to FTC privacy standards as the ones that should govern ISPs, along with everyone else…

All actors in the online space should be subject to the same rules, and the federal government shouldn’t favor one set of companies over another. Therefore, [Pai] has advocated returning to a technology-neutral privacy framework for the online world and harmonizing the FCC’s privacy rules for broadband providers with the FTC’s standards for others in the digital economy.

The Trump administration landing team that beamed down to the FCC last year included people who strongly believed in farming out responsibilities to other federal agencies, including particularly the FTC, as well as rolling back the 2015 common carrier decision. That’s clearly the direction that Pai and fellow republican Michael O’Rielly are taking.

Net neutrality on a fast track to oblivion at FCC

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No doubt about intentions.

In his short time as Federal Communications Commission chairman, Ajit Pai hasn’t actually said he’s going to scrap the 2015 decision to classify broadband as a common carrier service, and with it the network neutrality rules that depend on it. But in comments he made last week and in the substance of his big news dump on Friday, it’s clear that he’s moving quickly in that direction.

Among the actions announced late Friday afternoon was the cancellation of investigations into the zero rating practices of AT&T, Comcast, Verizon and T-Mobile. The question was whether offering customers unlimited free data to watch video sold by the carriers while charging fees and enforcing data caps on outside content violates the core principle of network neutrality: that broadband providers can’t use their control – monopoly or otherwise – over Internet access to gain a competitive advantage over other content providers.

In a preliminary finding, released in the final days of the Obama administration, the FCC said yes it does, at least where AT&T and Verizon are concerned. At the time, Pai blasted the report and said change was on the way. And so it was.

Pai also shredded draft decisions that would have regulated wholesale broadband rates and cable companies’ set top box practices, and revived an effort to exempt small and medium sized ISPs from transparency requirements. Like the zero rating investigation, all of those depend on broadband being classified as a common carrier service.

When that decision was made two years ago, then-chair Tom Wheeler labeled it the “Open Internet Order”. No longer. Pai, who speaks carefully, if often verbosely, now calls it the “Title II Order” and FCC staff are following suit. That characterisation is correct. Title II, which is FCC jargon for common carrier regulations, is at the heart of the decision and net neutrality or an open Internet or transparency or wholesale rates are issues that follow from it.

Words matter, particularly in government. Eliminate the common carrier classification and everything else disappears too.

FCC chair Pai buries transparency pledge with a big dump

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Under orders from new republican chairman Ajit Pai, Federal Communications Commission staff issued orders and sent letters rescinding several recent actions on Friday afternoon. In what democratic commissioner Mignon Clyburn blasted as a “Friday news dump” and Pai praised as “revoking midnight regulations”, the FCC cancelled or pulled back…

Clyburn’s characterisation is correct. Whatever else it might be, Friday’s late afternoon announcements are a Friday news dump. She was also right in calling out Pai’s action as hypocritical. The day before, he broke precedent and released draft versions of two relatively minor decisions the commission will consider later this month and said in a written statement

I want this Commission to be as open and accessible as possible to the American people. I want us to do a better job of communicating with those we are here to serve…Now, that’s not to say that the contents of FCC proposals and orders remain secret to everyone. Lobbyists with inside-the-Beltway connections are typically able to find out what’s in them. But the best that average Americans will get is selective disclosures authorized by the Chairman’s Office—disclosures designed to paint items in the most favorable light. More often, the public is kept completely in the dark.

During the transition to the new Trump administration, Pai and others promised to reverse any last minute actions approved under the outgoing, democratic chairman’s authority. No surprise there. But shovelling bare bones cancellation orders out all at once and just before the weekend is the same sort of political spin doctoring that former chair Tom Wheeler habitually indulged in and that Pai rightly slammed, then and now.

Pai gets the call as weed-whacker-in-chief

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Mainstream, of a sort.

Ajit Pai is the new chairman of the Federal Communications Commission, as predicted. An explicit announcement hasn’t been released – at least not as of earlier this morning – but Pai posted a thank you note and his colleagues have offered official congratulations, so take it as a given.

The appointment appears to be permanent. The FCC’s website has an historical listing of commissioners and chairs, and Pai is designated as “chairman”, while Mignon Clyburn, who held down the job while Tom Wheeler was awaiting confirmation in 2013, is listed as “acting chairwoman”. So take that as a given too.

Pai will need to be renominated to a full term and confirmed by the U.S. senate at some point, but that’s not an immediate problem. Designation as chair is within the president’s gift.

Like Trump, Pai has an over active Twitter account and a penchant for colorful hyperbole. Shortly after the election, he said he wanted to to “fire up the weed whacker and remove those rules that are holding back investment, innovation, and job creation”. Particularly, that means the FCC’s 2015 decision that reclassified broadband as a common carrier service, and all the rules – like network neutrality and privacy requirements – that flowed from it.

Even so, Pai is squarely in the mainstream of republican thinking regarding telecoms regulation in Washington, D.C. His appointment in 2012 was at the behest of congressional republicans and during the Obama administration he reliably voted on the losing side of the frequent three-to-two decisions produced by Tom Wheeler during his chairmanship.

Critics have characterised Pai as a “former Verizon lawyer”. While that’s true, it’s also a bit of a distortion. His resume includes a couple of years working for Verizon as a lawyer, as well as a stint at a private law firm, but he’s spent most of the past two decades in federal government jobs – clerk to a federal judge in Louisiana, and stints as a staff lawyer for the justice department, FCC, and republican-led U.S. senate committees.

The only way to get actual industry experience is to work for one of the companies that comprise the industry – duh – and it’s a rare telecoms regulator these days that knows how it looks from the other side. Neither of his two remaining colleagues – republican Michael O’Rielly and democrat Mignon Clyburn – can claim that kind of real world experience.

From the perspective of Beltway politics, Pai is not a radical choice.