Pai Says New Administration Should Maintain Focus on China

FCC Chairman Ajit Pai made some of his toughest comments yet on China during Tuesday's Center for Strategic and International Studies webinar. Pai acknowledged he will leave office Jan. 20 and “hand the baton” to a new administration. Others in Washington, including at the FCC, haven't said if they agree that Joe Biden is the next president. That administration “will have to decide the approach that they are going to take to address the issue of security in our communications networks, and I hope that they succeed,” Pai said: “I’m optimistic that there won’t be any turning back.”

Asked about Communications Decency Act Section 230, Pai was noncommittal, as he has been multiple times, on whether he would act before leaving, including a declaratory ruling. “We’ll see where it goes,” he said. “One thing is for sure … that social media, of course, plays an increasing role in terms of the public square when it comes to debating political issues,” he said. The issue "isn't going away anytime soon.” FCC officials said nothing has circulated on CDA Section 230 (see 2101050060).

Before he was chairman, the FCC allowed carriers to use federal subsidies to buy equipment “from virtually any company,” including Huawei and ZTE, and released only a “nonbinding white paper” on security issues, two days before the start of Donald Trump's administration, Pai said. The paper offered “no concrete plan of action and didn’t even mention China,” he said. “Things are different now, much different.” The Chinese companies and embassy didn’t comment now.

There's bipartisan agreement now that “China presents serious challenges to the national security of the United States and to our core values,” Pai said. “That feeling is shared by the American public” and “a growing number of people around the world,” he said. China’s suppression of its Muslim minority Uighurs, “the crushing of dissent in Hong Kong,” corporate espionage and theft of intellectual property turned many against China, he said.

“Who knows what would happen if we allowed Chinese companies’ equipment to be incorporated into our communications networks,” Pai said: “We have acted decisively, and in a bipartisan way, to address the threats to our communications networks.” Pai cited actions over the last two years, including a program to remove Huawei and ZTE equipment from U.S. networks (see 2012100054). He acknowledged that “Huawei is in a position of strength” in this market.

In the late 1990s, many more companies made network equipment, “but the economics of the industry are very hard,” Pai said: “To compete, you’ve got to have a certain scale, and you’ve got to keep investing in R&D.” Foreign companies also bought some U.S. players, he said. Compared with the Chinese companies, “you’re essentially fighting with one hand tied behind your back if you’re a nonsubsidized competitor,” Pai said. Open radio access networks, which depend on software, play to American strengths, he said.

Updating orbital debris regulations won’t be easy (see 2010130040), but the next FCC should persist, Pai said. “People are going to complain no matter what decision you make, but I think it’s important for us to make a decision,” he said: “That too has national security implications.”

Pai said international travel took a toll, but it was important to speak with regulators around the world. “That took a lot of time” and distracted from other work at the FCC, he said. “It was really important for me to show … that the United States, the FCC, cared about what our counterparts were thinking,” he said.