New FCC Already Slashing Obama-Era Regulations
February 10, 2017 | by Andrew Regitsky
For anyone observing the FCC during the Obama administration, it was abundantly clear that ex-Chairman Tom Wheeler and current Chairman Ajit Pai radically disagreed about the need for regulations designed to protect consumers. Wheeler was a staunch proponent for such regulations, especially those in which companies such as ISPs utilized consumer data as part of their day-to-day operations. Thus, his FCC promulgated strict net neutrality and Internet privacy rules and had little appetite for services such as zero-rated data offerings that appeared to favor certain content over others.
Pai is Wheeler’s complete opposite. He strongly believes that many of the Wheeler-generated regulations will ultimately damage the free market by reducing consumer choice, discouraging investment and lowering employment. He has publicly vowed to undo many of Wheeler’s recent actions.
While it will take time and future proceedings (or Congress) to eliminate or transform net neutrality and ISP privacy, this week Pai began his mission to eliminate unnecessary regulations by swinging and connecting with some low-hanging fruit (i.e., regulations instituted in the final days of the Wheeler FCC). These actions include the following:
Zero-Rated Plans – In the waning days of the previous FCC, the Commission sent a letter to several ISPs informing them that their zero-rated data plans were likely in violation of the net neutrality rules. That letter has now been vacated. In a February 3, 2017 Press Release, the new FCC stated:
Today, the Commission finally puts an end to the past Commission’s zero-rating inquiries and recommits to permission less innovation. While this is just a first step, these companies, and others, can now safely invest in and introduce highly popular products and services without fear of Commission intervention based on newly invented legal theories.
Pai followed up with a February 3rd statement summarizing his own view of zero-rated services:
These free-data plans have proven to be popular among consumers, particularly low-income Americans, and have enhanced competition in the wireless marketplace. Going forward, the Federal Communications Commission will not focus on denying Americans free data. Instead, we will concentrate on expanding broadband deployment and encouraging innovative service offerings.
Lifeline Broadband Program - Another Pai action this past week garnered significant negative publicity, but the opinion here is that it was widely misreported. In his final days, Wheeler’s FCC approved the admission of nine companies into the Lifeline program so their customers could obtain cheap broadband service. Pai’s FCC rescinded that approval in an Order on Reconsideration in Docket 09-197 released on February 3, 2017:
The Bureau sets aside those orders, revokes the LBP [Lifeline Broadband Program] designations for those providers, returns those petitions for LBP designation to their status as petitions pending before the Bureau.
The reaction to this Order was predictably brutal. For example, the Trump-hating Washington Post eager to put any action his government takes in as negative a light as possible, used the following headline on its Website on February 3, 2017:
“The FCC is stopping 9 companies from providing federally subsidized Internet to the poor.”
In his official FCC blog on February 7, 2017, Pai clearly had enough and forcefully responded to the blitz of bad publicity. Among other things, Pai stated that:
The FCC’s action only impacted nine of the over 900 providers participating in the Lifeline program. Ninety nine percent of the companies participating in the program were not affected at all.
The applications of these nine providers to participate in the program were not rejected. They remain pending at the Commission.
All but one of the newly designated providers covered by the Order has NO customers.
While it is certainly fair to criticize Pai and the FCC, consumer advocates and their media allies would be better served to wait for a significant Commission action that actually hurts consumers rather than becoming outraged over everything.
This week, the Commission also dismissed other actions of the previous FCC that frankly are less defensible and make little sense. These include rescinding recommendations for improving broadband infrastructure, a white paper on reducing cyber-security risk, and a report on modernizing the E-rate program.
The Commission defended these dismissals by stating that they were “Midnight” actions taken in the waning days of the previous administration that were opposed by a majority of the commissioners. While it is expected and even laudable that a new FCC wants to make a fresh start, it brings to mind the danger each political party faces. Each tends to read its political victory as a green light to undo all the decisions of its predecessors. That can be a dangerous mindset. Some of Wheeler’s regulations made perfect sense and should not be overturned. These include the bright line rules for the Internet such as no blocking or throttling of traffic. There should also be no paid prioritization of traffic without economic justification. If the Pai FCC goes overboard and eliminates rules such as these, then consumers will have a legitimate reason to howl.
