Vice President, C_TEC, U.S. Chamber of Commerce
May 15, 2017
Recently FCC Commissioner Ajit Pai marked his 100th day as chairman. In the days leading up to his designation as chairman, Pai stated that “we need to fire up the weed whacker and remove those rules that are holding back investment, innovation, and job creation.” Chairman Pai has lived up to this promise by working to undo many of the onerous regulations imposed over the last eight years and leading the charge to voluntary implement much-needed regulatory reform at the FCC.
Removing Regulatory Burdens
In January, Chairman Pai quickly began to eliminate the threat of overly-burdensome regulations when he removed the proposed set-top box rulemaking from the commission’s agenda. If adopted, Chairman Tom Wheeler’s cable box proposal would have created a regulatory disparity with regard to privacy protections and would have threatened many of the advertising and licensing agreements that are the backbone of the television economy.
In February, Chairman Pai’s FCC closed the previous leadership’s inquiry into wireless free data plans, setting aside and rescinding a report issued in Chairman Wheeler’s final days. This report criticized the use of certain free data plans which could have had a chilling effect on billing methods designed to benefit consumers.
Later that month, the commission voted to ease requirements for small internet service providers (ISPs) issued under the 2015 Open Internet Order. Commissioners Pai and O’Rielly voted to waive for five years network management disclosure rules for broadband providers with fewer than 250,000 broadband connections. This measure was done to insure that small businesses in the internet service industry are not saddled with burdensome compliance costs.
In March, Chairman Pai issued a stay, effectively pausing the FCC’s broadband privacy rule which threatened innovation and created consumer confusion by eliminating the uniform privacy framework for all members of the internet ecosystem. Later that month, led by a coalition of technology, telecommunications, and other associations including the U.S. Chamber of Commerce, Congress passed and the President signed a resolution of disapproval under the Congressional Review Act permanently eliminating the rule.
Chairman Pai’s most impactful move with regard to regulatory relief as of now occurred in late April when he announced the commission’s plan to roll back the Obama-era Title II common carrier designation of broadband providers which effectively treats them like a public utility. The plan would restore regulatory balance by giving broadband privacy jurisdiction back to the Federal Trade Commission and at the same time giving the public a chance to comment on whether to keep the bright-line net neutrality rules against practices such as ISPs blocking lawful content. One of the challenges that Chairman Pai will face over the next few months in the Title II rulemaking will be disproving the widespread myth that removing the public-utility regulatory framework of broadband is the same as eliminating net neutrality.
Instituting Regulatory Reform
Chairman Pai’s efforts at the commission have not solely focused on eliminating harmful regulations but also have involved taking voluntary steps to institute regulatory reforms that promote openness and transparency.
For instance, in February Chairman Pai announced that the commission would release the full text and a fact sheet of proposals before the FCC votes on an item. The commission under previous chairmen would in fact wait days after a proposal was voted upon to release the text of a rule. One of the most egregious examples of passing regulations before the public had a chance to see them was the adoption of the Open Internet Order which fundamentally changed the internet. The commission did not release the text of the order for nearly two weeks until after it was formally adopted. Chairman Pai in fact released a full text copy of his Internet Freedom plan to roll back Title II nearly a month before the commission formally meets to consider it on May 18.
In addition to bringing greater transparency to the FCC, Chairman Pai has also instituted measures that will help the commission get rules right using quality data. In April, the Chairman announced the establishment of an Office of Economics and Data. Pai often cites the FCC’s Chief Economist during the time of Chairman Wheeler’s Title II rulemaking who joked that the agency was an “economics free zone” at that time. One of the new missions for the economics office will be to routinely conduct cost-benefit analyses of proposals which unfortunately was not previously standard practice for the agency.
Chairman Pai’s leadership, according to Harold Furchtgott-Roth of the Hudson Institute, “will serve as the template for how to manage federal agencies.” Not only will Chairman Pai’s regulatory reforms serve as an example of good government, his actions show that agencies can effectively function with rulemaking requirements like transparency and the use of quality data called for in legislation such as the Regulatory Accountability Act.
If the regulatory relief and reform efforts over the last 100 days at the Federal Communications Commission are indicative of what is to come over the next few years, consumers, innovators, and communications providers alike will have much good to which to look forward.
About the authors
Vice President, C_TEC, U.S. Chamber of Commerce
Crenshaw is Vice President of the Chamber Technology Engagement Center (C_TEC).