New FCC Chair Ajit Pai Vows to Kill Net Neutrality Rules

President Donald Trump on Monday named Ajit Pai chairman of the Federal Communications Commission. Pai, who has been a Republican commissioner for the agency since 2012, replaced Tom Wheeler, whom President Obama appointed to the top FCC post in late 2013.

With the new administration, Republicans gain the expected majority of the commission. Pai has been known to be a foe of former President Barack Obama’s Net neutrality rules, stating the policy could lead to new taxes while giving less consumer choice. Pai has vowed to overturn those rules, but at the same time has stated he is pro innovation and bipartisan.

“I am deeply grateful to the president of the United States for designating me the 34th Chairman of the Federal Communications Commission,” Pai said.

From broadband to broadcast, I believe in a 21st-century version of Jefferson's 2nd Inaugural: we are all Republicans, we are all Democrats.

— Ajit Pai (@AjitPaiFCC) January 23, 2017

Change of Direction

With the departure of Wheeler, the FCC could shift direction dramatically. The Open Internet rules, which went into effect in June 2015, are designed to ensure that consumers and businesses alike have equal access to broadband-speed content delivery.

However, more than 100 Internet companies have expressed vocal opposition to Net neutrality, and their complaints have resonated with Pai, who has been highly critical of the rules.

“The impetus will be focused on reversing the Title II regulations for telcos across the board,” said Roger Entner, principal analyst at Recon Analytics.

“Unfortunately, Chairman Wheeler decided that Net neutrality needs to be based on utility-style Title II, and that makes Net neutrality collateral damage,” he told the E-Commerce Times.

Forward Thinker?

The role of the FCC has evolved vastly in the past 30 years — from an agency that oversaw airwaves used primarily for radio and TV, to one that must deal with the changing landscape of broadband Internet access.

“Ajit Pai is a forward thinker who wants to simplify and speed up how the FCC operates,” said Josh Crandall, principal analyst at Netpop Research.

“He has five years of experience within the FCC and has participated in the commission’s efforts to stay ahead of a rapidly changing telecommunications landscape,” Crandall told the E-Commerce Times.

“His statements on Net neutrality make me cautiously optimistic that he recognizes the economic, and social benefits that a level playing field have created,” he added. “He opposes heavy regulations that come with the determination that the Internet is a ‘public utility,’ and not specifically ‘Net neutrality.’

“Pai understands and respects the potential a more free market approach has to unleash investment and innovation on the Internet,” said Jessica Melugin, adjunct fellow at the Competitive Enterprise Institute.

“He’ll almost certainly push back against Net neutrality’s potential to thwart this progress in his new role,” she told the E-Commerce Times.

No Common Ground?

Net neutrality has not been without controversy since Tim Wu, a media law professor at Columbia University, first coined the term back in 2003. Among its biggest supporters today are many major Internet companies, including eBay, Amazon and Twitter. Other major players, however, including AT&T, Verizon and IBM, are strong opponents.

The definition of the term “Net neutrality” is a sticking point with far-flung ramifications.

“The linchpin of the FCC’s current version of Net neutrality is the decision to classify broadband as a common carrier service — bring it under Title II of the Communications Act, to use the jargon,” explained Steve Blum, principal analyst of Tellus Venture Associates.

“Title II equals common carrier status, which is the key to the original decision and the proceedings that fell from it — such as the new privacy rules, which were passed, and the proposed set-top box rules, which were pulled off the agenda after Trump won in November,” Blum told the E-Commerce Times.

“If broadband is a common carrier service, then the FCC and state commissions have considerable regulatory discretion and power,” he added. “If it isn’t, then the scope of any network neutrality rules would be much, much less. That’s what fell out of the Verizon decision in 2014.”

Closing the Net?

Support for — and opposition to — Net neutrality crosses party lines.

“In a previous decisions, the DC Circuit Court gave the FCC the advice to use Section 706 to institute Net neutrality, but the Democratic FCC decided not to take that advice,” Entner noted.

“Sen. Thune, Republican from South Dakota, is renewing his efforts to enshrine Net neutrality by law,” he added.

“The best solution is to work with Sen. Thune and make this a reality,” Entner suggested. “Enshrining Net neutrality by law is much more durable than any agency decision.”

Status Quo

If such a law doesn’t pass — and it is unlikely that it could be signed into law, given the current state of Congress, then the question becomes whether there could be some form of compromise.

“The industry and Republicans in Congress — and on the FCC — are very much opposed to common carrier status for broadband,” Blum emphasized.

“They will go after that decision first, and if they knock that down, everything else falls with it, including Net neutrality, universal service, privacy and set-top box rules,” he added.

“The public needs to be very watchful to make sure that the principles of Net neutrality are maintained regardless of a classification,” noted Netpop Research’s Crandall.

“If Mr. Pai can simplify regulations and modernize the FCC for a more nimble existence in a digital world, all the better; yet the public should make sure that Mr. Pai and the FCC articulate a clear solution before they modify the current situation,” Crandall added.

Already, “congressional Republicans have indicated a willingness to consider a much lighter version of Net neutrality, without all the additional authority that goes along with the current version,” Blum said.

“So it’s either going to go one of two ways: Either a deal will be worked out so that the original Net neutrality decision will be quickly rolled back to something that’s palatable to Republicans, or they’ll take the long route and repeal it altogether, which would put everything back to what it was in 2010,” Blum suggested.

“If proponents want to hang on to the essential parts of Net neutrality,” he said, “they have to be willing to let go of everything else. Otherwise, they’ll lose everything.”