Pai Tells ACA 2015 Net Neutrality Rules Stemmed From Misunderstanding Tech's Threat

The digital divide is the FCC's “top policy priority” and the Connect America Fund reverse auction is “a milestone” in modernizing a key USF program, FCC Chairman Ajit Pai told an American Cable Association conference Wednesday. Pai slammed Title II Communications Act regulation of broadband service, which he said was the result of “Silicon Valley giants” claiming small ISPs such as ACA's members “posed a greater threat to a free and open internet” than Google, Facebook and Twitter.

“Some of us understood back in 2015 that this was absurd,” Pai said. “In 2018, with each passing day, many more people are waking up to reality.” In Q&A, Pai responded to a question about the market power of edge providers by saying he was “prescient” to raise concerns about Silicon Valley and the internet in his 2017 speech announcing plans to rollback the Title II rules.

There's “no better example of overregulation” than the previous net neutrality rules, Pai said. Consumers are more concerned about access to broadband and competition than about blocking, “contrary to what some Beltway politicians and special interests assert,” Pai said. Identifying the source only as a “politician,” Pai also ridiculed a 2017 quote from Rep. Anna Eshoo, D-Calif., that described cable companies as seeking to monopolize internet connectivity. The “politician” and tech companies painted rural, small ISPs as “insidious, all-powerful monopolists” to justify Title II regulations, Pai said.

The CAF Phase II reverse auction will be technology-neutral and emphasize efficiency, Pai said. “Reverse auctions can lower the cost of connecting an area by 20 percent,” Pai said. CAF dollars shouldn't duplicate existing efforts, he said. “The FCC should not subsidize overbuilding in areas already covered by private investment,” Pai said. “I strongly encourage ACA members to take a hard look and consider competing to serve eligible areas,” he said of the reverse auction. “A smarter, more efficient Connect America Fund represents a significant step toward closing the digital divide.”

Commissioners Mignon Clyburn and Mike O'Rielly cited the digital divide and broadband deployment as the FCC's most important mission, in a joint appearance later. “Our number one mission is to connect America,” Clyburn said, though she said she sometimes disagrees with her colleagues about the specifics of how to accomplish that.

The FCC is “on the cusp” of prioritizing some aspects of universal service over others, Clyburn said. “Right now, things have gotten a little partisan.” Putting one part of the fund over the other is “problematic,” she said. O'Rielly said he supports efforts to modernize the USF and make it more efficient, and all the funds should have spending caps. “I care very deeply about how much consumers are paying into the system,” he said. Efforts to support broadband deployment should focus on unserved rather than the underserved areas, O'Rielly said. The FCC shouldn't focus on bringing gigabit internet to “suburbia,” he said.

The regulator should be prepared to preempt local authorities that are “bad actors” and block broadband deployment, O'Rielly said. “We will take action against local and state governments that are keeping constituents from having broadband.” The FCC shouldn't go from “zero to preemption,” Clyburn countered.

The commission is almost to the point of “rubber stamping any transaction that comes our way,” said Clyburn, listing actions on media ownership as some of the agency's biggest mistakes of the last 25 years. She said the FCC made some wise past decisions in that area, such as signaling its concern over AT&T's since-abandoned buy of T-Mobile. O'Rielly also cited media ownership as a problem area for the commission, and said the agency has been “stuck” on the same media ownership issues for decades.

ACA Notebook

House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn., looked ahead during the ACA event to the subcommittee’s plans for dealing with net neutrality, related paid prioritization issues and broadband infrastructure legislation. Blackburn said it's very likely the House-passed Repack Airwaves Yielding Better Access for Users of Modern Services (Ray Baum's) Act FCC reauthorization and spectrum legislative package (HR-4986) will be included in the FY 2018 omnibus spending bill, which President Donald Trump backed Wednesday (see 1803210041). Blackburn touted her Open Internet Preservation Act (HR-4682/S-2510), which would bar blocking and throttling but doesn't address paid prioritization (see 1712190062). “It is important that we put this net neutrality issue in the dustbin of history,” she said: It’s “amazing to me how [the term] has evolved and how it means different things to different people.” Blackburn hopes to move HR-4682 “forward in the House” and then have an anticipated “discussion on paid prioritization” that will in part examine how it affects IoT, artificial intelligence and other technologies. The issue “deserves a more thorough discussion and we will have that discussion,” she said. House Commerce Committee lawmakers and staff are also continuing to review more than two dozen broadband infrastructure-related bills they considered during a January House Communications hearing they intend to blend into legislation to reflect Trump's proposal (see 1801300051 and 1803080062), Blackburn said. The legislation may move in different forms, but “every bill that we are writing on this is going to be technology neutral,” she said.

Secretary of Commerce Wilbur Ross touted President Donald Trump's infrastructure legislative package later to ACA. The proposal, released last month, suggests $50 billion in federal funding for rural infrastructure projects allocated via state block grants (see 1802120001). States “know better" than the federal government “what their individual priorities are,” Ross said. He also highlighted other proposed funding that broadband projects could qualify for, including a “transformative projects” program that would appropriate funding for “innovative and transformative” infrastructure projects in the telecom sector and others that can't secure funding via the private sector. Ross noted language in the Trump proposal aimed at streamlining the federal environmental permitting process down to a maximum of two years for broadband and other infrastructure projects. The aim is to make the process for permitting a major infrastructure project “much smaller” by “cutting out” federal regulations that overlap with state and local laws, he said. The White House doesn't “think states and localities need the federal government to impose” their environmental laws on top of localized statutes, Ross said. Getting that part of the proposal through Capitol Hill will be “a bit of a struggle” because many lawmakers like "more regulations,” he said. The regulatory streamlining push mirrors efforts within the Department of Commerce's Regulatory Reform Task Force and elsewhere in the administration, Ross said.

Also at ACA Wednesday, a top Comcast executive discussed possible net neutrality compromises: 1803210006. And cable operators were advised to be more like Spotify for their user interfaces: 1803210039.