FCC’s Pai condemns net neutrality
March 1, 2017
By Colin Mann
FCC Chairman Ajit Pai, a known critic of the Obama administration’s ‘Open Internet’ network neutrality proposals, has signalled a reversal of such policies, which he described – without naming the principle – as “heavy-handed decrees inspired by the distant past”.
Delivering a keynote address at the Mobile World Congress in Barcelona, Pai told delegates he would pursue policies that promote infrastructure investment, foster innovation, and expand next-generation networks across the United States, suggesting he was “optimistic” about the progress the FCC would make over the next few years in bringing faster and cheaper broadband to all Americans, with 5G having the potential to transform the wireless world. “And when you add the potential of new satellite and fixed broadband technologies, as well as further innovation in 4G LTE, we stand on the cusp of exciting advances that will bring unparalleled choice and competition to consumers,” he declared.
According to Pai, the key to realising the US’s 5G future is to set rules that will maximise investment in broadband. “For if we don’t, the price could be steep,” he warned. “After all, networks don’t have to be built. Risks don’t have to be taken. Capital doesn’t have to be spent in the communications sector. And the more difficult government makes the business case for deployment, the less likely it is that broadband providers big and small will invest the billions of dollars needed to connect consumers with digital opportunity,” he suggested.
“As we move towards 5G, regulators also must recognise something many people often don’t: Innovation is not limited to the so-called ‘edge’ of networks. Innovation within networks is also critical, especially in the mobile space. To realise the 5G future, we need smart infrastructure, not dumb pipes. And we need to make sure our rules recognise this reality,” he stated.
“Here, too, I’m hopeful. In the United States, we are in the process of returning to the light-touch approach to regulation that produced tremendous investment and innovation throughout our entire Internet ecosystem—from the core of our networks to providers at the edge,” he said.
He suggested that during the Clinton Administration in the 1990s, American policymakers forged a historic consensus across party lines that the Internet should be free from heavy-handed regulation, describing the policy as “a modern one” that gave the private sector the flexibility it needed to innovate.
Facilities-based competition encouraged broadband providers to build their own networks rather than using their competitors’ infrastructure. “We eliminated network-sharing obligations, which depressed investment and deterred network construction,” he noted, adding that spectrum usage decisions had also contributed to a healthy US market.
“However, two years ago, the United States deviated from our successful, light-touch approach,” he said. “The FCC decided to apply last-century, utility-style regulation to today’s broadband networks. Rules developed to tame a 1930s monopoly were imported into the 21st century to regulate the Internet. This reversal wasn’t necessary to solve any problem; we were not living in a digital dystopia. The policies of the Clinton Administration, the Bush Administration, and the first term of the Obama Administration had produced both a free and open Internet and strong incentives for private investment in broadband infrastructure,” he suggested.
“Two years later, it has become evident that the FCC made a mistake. Our new approach injected tremendous uncertainty into the broadband market. And uncertainty is the enemy of growth. After the FCC embraced utility-style regulation, the United States experienced the first-ever decline in broadband investment outside of a recession. In fact, broadband investment remains lower today than it was when the FCC changed course in 2015. And we have seen much concern about whether the FCC would permit or ban service plans,” he observed.
“But today, the torch at the FCC has been passed to a new generation, dedicated to renewal as well as change. We are confident in the decades-long, cross-party consensus on light-touch Internet regulation—one that helped America’s digital economy thrive. And we are on track to returning to that successful approach,” he claimed.
He said that going forward, the FCC would not focus on denying Americans free data or issuing “heavy-handed” decrees inspired by the distant past. “Instead, we will seek to advance the networks of the future and the innovative new products and services that take advantage of those networks. And as we do so, we will preserve a free and open Internet. We know from two decades of experience that utility-style regulation is not necessary to achieving that goal,” he argued.
Recognising that government has a role to play when it comes to broadband, the FCC’s new approach would not be zero regulation, but light-touch regulation—rules backed by long-standing principles of competition law, suggesting that America’s approach to broadband policy would be practical, not ideological. “We will embrace what works and dispense with what doesn’t,” he declared.
“That means removing barriers to innovation and investment instead of creating new ones. That means taking targeted action to address real problems in the marketplace instead of imposing broad, pre-emptive regulations. And that means respecting principles of economics, physics, and law and acting with humility as we regulate one of the most dynamic marketplaces history has ever known. This vision will unleash the massive investments that will help the United States realise its 5G future.”