Trump Team Proposes FCC Plan, Including to Reorganize; Pai Meets With President-Elect

The plan seeks to reorganize FCC bureaus and move certain functions to the FTC, and the landing team was divided in its recommendations, Broadcasting & Cable had reported. A Republican contact told us FCC reorganization is part of the landing team plan and there was disagreement among team members.

Trump held meetings with Pai and former FTC Commissioner Josh Wright (see 1701170027) in New York City over the weekend, spokesman Sean Spicer told reporters on a call Tuesday. He didn’t specify the substance of the discussions, and Pai didn't comment, but others saw the meeting as indicating Pai is under serious consideration for being named permanent FCC chairman, and not just acting chairman, as widely expected.

“That’s got to be a very good sign for Pai," said an industry representative who's a Republican. "The president-elect doesn’t waste his time on these kinds of meetings unless there’s some significant reason, and best we can tell no other candidate has surfaced.” NetCompetition Chairman Scott Cleland said Pai could be benefiting from the support of Trump's attorney general nominee, Sen. Jeff Sessions, R-Ala. "If you look at the number of Sessions staffers in senior positions in the incoming administration, he apparently has a lot of respect and clout," said Cleland. "In the absence of an alternative we haven’t heard about, Pai's the logical frontrunner for permanent chairman.”

The Trump landing team appears to have made FCC reorganization proposals similar to those suggested by team member and American Enterprise Institute scholar Jeffrey Eisenach and others in a 2014 letter to key House members, said Hal Singer, George Washington University Institute senior fellow and a principal at Economists, Inc. "The big blueprint is they want to divest the FCC of many powers, including merger reviews or anything that's consumer-protection oriented, which would be given to the FTC." That could leave the FCC focused on allocating licenses and other "nonduplicative" communications matters, said Singer.

AEI's 2014 FCC reorganization plan was based on two insights, emailed network engineer Richard Bennett, who was one of the signatories: "Today’s communication markets are competitive; and market discipline outperforms regulators in most cases. Policy wonks complained about the technology silos in the Communications Act for decades, so the time has come to do something about them as well. Our current system of splitting spectrum management between NTIA and the FCC isn’t working, so a new agency needs to be created with the power to transition government spectrum to the private sector. While critics are bound to call this plan 'radical,' it’s actually the result of 20 years of thoughtful reflection on the shortcomings of the 'regulated monopoly' model upon which the Communications Act is based."

The plan would reorganize FCC bureaus and defer to the FTC on some matters, said the Republican industry representative, but it's "pretty clear the FCC landing team has descended into chaos between Eisenach" and fellow team member David Morken, Bandwidth.com CEO. Morken made separate proposals to recommend canceling the incentive auction, be more supportive of net neutrality and limit the power of incumbents, said the GOP source, who played down the importance of the landing team recommendations: "Whatever it is they're doing, it doesn't matter much." Neither Eisenach or Morken commented Tuesday.

Others offered different views. "Regarding the notion of a minority plan: it is public that the purpose of the landing team wasn't to develop policy, but to liaise with the agency so that the incoming administration can effect the policies approved before the election by the candidates with assistance from the transition team," said the informed source. "If people on the landing team thought they were creating FCC policy, they were confused. The Action Plan adopted Friday aligned perfectly with the pre-election plan.”

“There is an opportunity now to accomplish meaningful communications policy reform that is free market-oriented," emailed Free State Foundation President Randolph May. "I have considerable confidence that Ajit Pai and Michael O’Rielly agree, and it appears the Trump Administration will be on board.”

USTelecom President Jonathan Spalter said in a statement: “The broadband ecosystem has evolved at lightning speed but the FCC simply hasn’t kept up. We all need to think boldly and practically about how the FCC should be organized to better serve the needs of America’s broadband consumers and to fulfill its obligation to Congress.”

TechFreedom President Berin Szoka said an FCC reorganization plan shouldn't be controversial because Democrats supported some efforts in the past, including under then-Chairman William Kennard in 2000. "It is really critical to do if you think the nature of the FCC's operations should change," Szoka said. "It's also not going to happen quickly. You can't just wave a wand. It's going to require notice and comment." He said the new Republican majority could act quicker to overturn net neutrality rules and broadband reclassification, perhaps by addressing petitions for reconsideration of broadband privacy rules that were based on Title II of the Communications Act.

“Some FCC restructuring (such as moving bureaus around) is not that unusual and the new Chairman and majority may have discretion to undertake that kind of reorganization," emailed Public Knowledge Senior Counsel John Bergmayer. "But there's a difference between how the FCC internally structures its work and what that work actually is. The FCC doesn't determine what its statutory obligations are -- Congress does. So some of the more sweeping reform ideas would have to be handled by Congress. There may be those with the baseline idea that 'consumer protection' issues are all the same and should be handled by one unified agency. I don't think that is right: The physical infrastructure industries that the FCC deals with, for instance, raise issues that should be dealt with under a distinct framework; access to communications technology is essential to participation in the economy, and media industries have many 'public interest' style issues that don't fit neatly into a pure competition/consumer-protection framework. Relatedly, the idea that antitrust or the FTC are enough to handle all consumer protection and competition issues is, I think, wrong.”

Expect a “flurry of activity” on Monday, Trump spokesman Spicer said. Trump will make some initial actions Friday after his inauguration, perhaps swearing in any cabinet members the Senate has cleared, but “Monday is where the focus should be in terms of the bigger issues,” Spicer said. The Senate hasn't confirmed any of the Trump nominees yet, but Majority Leader Mitch McConnell, R-Ky., said last week he expects six or seven could be cleared by Inauguration Day (see 1701090055). The Senate Commerce Committee will hold its confirmation hearing Wednesday for Wilbur Ross (see 1701170064), the nominee for commerce secretary. Trump’s team prioritized regulatory overhaul, with likely implications for the FCC, FTC and other aspects of federal government, and some regulatory actions could come next week. “We’re still working on the sequencing of that,” Spicer said of the plans for Trump’s first actions as president.

Trump also met with Yale University computer science professor David Gelernter, under consideration for the role of science adviser in the administration, Spicer said.

Pai, meanwhile, repeated his proposals to create "gigabit opportunity zones" to help lower-income Americans get " better broadband" and narrow the digital divides. The basic idea would be to target "economically challenged areas" with federal tax incentives and state and local broadband-friendly policies. "This would incentivize broadband deployment, spur local governments to streamline regulations, help job creators, and ultimately revitalize neighborhoods," he tweeted Monday.