Pai Cautions Against Heavy-Handed Regulation of Broadband
The FCC is an independent agency and it will make a decision on net neutrality “based on our own independent review” of the state of play, said Commissioner Ajit Pai, referring to President Barack Obama’s comments this month on net neutrality and Communications Act Title II (see 1411100035). His remarks “don’t change the facts that are in the record of law that is before us,” Pai said Wednesday at a Mobile Future event in Washington. While Obama’s comment shapes the overall debate, it “won’t sway my deliberations one way or the other,” said Pai. He said he will focus on how to maximize the benefits of broadband advancement to U.S. consumers, especially in the mobile space.
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Pai cautioned against establishing regulation that could discourage innovation and competition. Common carrier regulation “is as heavy-handed as it gets,” he said when asked about AT&T’s decision to halt fiber deployment without knowing under which rules it will be governed. Complying with Title II most likely would fall disproportionately on smaller providers, he said. Title II would force a lot of firms out of business, and he’s worried that there’s a lot of talk about utility regulation as though it falls on only a few companies, Pai said. “It’s more important to get the rules right than to get them done right now.”
The FCC can “focus on the facts” to return to bipartisanship on technology remaining unfettered, Pai said. “We’ve had bipartisan consensus for 20 years,” and “it’s on the brink of unraveling,” he said. The FCC “would do well to ignore sloganeering on either side and think about how far we’ve come since bipartisan consensus,” he said. Pai said he has seen little analysis on how to impose Title II on broadband service. It’s not as simple as sweeping in wireless with phone service, he said. “Competition ultimately is the greatest tonic for any problem that net neutrality advocates might worry about.”
Mobile wireless capability is going to increase in importance, said Gerald Faulhaber, former FCC chief economist and former AT&T executive. “Anything we do to put a crimp in that is going to be a problem.” Implementing anything that looks like Title II regulation is going to be a serious problem in terms of raising capital, said Faulhaber, who is professor emeritus of business economics and public policy at University of Pennsylvania Wharton School. Wireless service is “trickier” than wireline service, Faulhaber said. It’s “bound by the amount of spectrum that’s available,” he said. The 65 MHz of AWS-3 spectrum being auctioned (see 1411190027">1411190027) is nothing, he said. “We need at least 1 GHz.”
Cisco has stated that broad reach of Title II is going to have a very negative impact in Silicon Valley, said Mary Brown, government affairs director. Operators are dealing with a huge increase in data demand, and 4G is accelerating consumer use of data, she said. Entrepreneurs would be encouraged to “jump in and develop new solutions,” she said. If they were under a different type of regime, “the brakes on that drive to innovation become pretty apparent,” she said.
Faulhaber said the FTC, rather than the FCC, should handle anti-competitive behavior in the technology space. "If we’re concerned about whether ISPs are doing anti-competitive things, we have an agency that does that stuff really well," he said, referring to the FTC. Some at the FTC and outside that agency have said similar in recent days (see 1411180020).