FCC Chief Makes Case For Tackling Net Neutrality Violations 'After The Fact' | KUOW News and Information

FCC Chief Makes Case For Tackling Net Neutrality Violations 'After The Fact'

May 5, 2017
Originally published on May 5, 2017 7:36 am

The Federal Communications Commission will vote on May 18 to formally begin the process of loosening regulations that enforce the so-called net neutrality rules for Internet providers.

Ajit Pai, who became chairman of the commission in January, says he supports a free and open Internet, which rests on a basic principle of "net neutrality."

This term in recent history has come to encapsulate the idea that Internet providers should treat all web traffic equally and fairly, but Pai opposes the regulatory approach to enforcing net neutrality that was adopted by the FCC's then-Democratic majority in 2015. Those rules dramatically expanded the agency's authority and oversight over Internet service providers, classifying them more like utilities, similar to traditional telephone companies.

In an interview with NPR's David Greene, Pai says he wants the government to focus on correcting actual anti-competitive behavior that Internet providers might demonstrate, rather than regulating against hypothetical harms.

"Preemptive regulation is appropriate when there's a major market failure — when the Internet is broken," he says.

In this case Pai argues that his predecessor, Tom Wheeler, unnecessarily inserted the government into the Internet economy, stifling its innovation and growth.


Interview Highlights

On his definition of net neutrality

Net neutrality is the basic principle of a free and open Internet. It means an online world in which consumers can access the lawful content of their choice, and that there aren't any gatekeepers deciding what points of the Internet they can or can't access. ...

I believe strongly in a free and open Internet, not just as a regulator but as a consumer. And if you look at how the Internet has developed over the last 20 years, I think part of the reason why we have the digital economy that's the envy of the world ... it's precisely because we've had a free and open Internet that's benefited everybody in the Internet ecosystem.

On whether Internet service should be treated as an essential utility

I think I would separate it into two different pieces. The first piece is that the Internet is increasingly essential to Americans in their daily lives. When you go to work, you use the Internet; when you want to educate your kids at home, you use the Internet. ... Even things like precision agriculture require Internet connectivity. So to achieve that goal of providing Internet access, we need to make sure that we have rules that promote much more infrastructure investment than we've got.

The second piece, however, is a much more arcane legal question, which is, what is the right legal framework to secure those protections of a free and open Internet? Is it the Title II [utility-style] regulations inspired by the 1930s? Is it the Clinton-era approach, which is light-touch regulation? Should Congress step in in 2017 and give us more modernized rules for the digital road, so to speak? That is a debate that we're having here in Washington today.

On potential special deals between content companies and Internet providers

First and foremost, we want to make sure that all content that is lawful on the Internet can be accessed by consumers — that's a bedrock protection of the open Internet that I think everybody would agree with. ... But secondly, we want to make sure that we have the ability to allow all kinds of streaming companies, others who create content on the Internet, to be able to reach their endpoints, which is the consumers.

And so we can envision some pro-competitive arrangements that allow for video in particular to be delivered in an efficient way. And one could conceive anti-competitive arrangements. And the simple point I've made is that we can't predict in advance every single potential type of outcome — some might be good, some might be bad — and on a case-by-case basis let's figure out what types of conduct are anti-competitive or otherwise would harm consumers or innovators, and take action if we see something like that arise.

On regulating preemptively versus after-the-fact

If you act before the fact, then you're preemptively saying that we think the marketplace is forever going to be the same and we can take account of every particular kind of conduct and say that, "you know what, it should be unlawful." And if the agency is going to do that, it has to recognize that there are severe potential unintended consequences.

First, you could be prohibiting a number of pro-competitive business arrangements. And secondly ... you could end up reducing investments. Companies might start to look elsewhere to invest if they think that the regulatory framework is too prescriptive. ...

After-the-fact regulation — which allows you to take action, again, based on actual harms that have been demonstrated in the record — is a much better way on balance to protect consumers. As opposed to preemptive regulation, which might seem appealing at first, but which has serious long-term consequences.

And the economic literature is pretty rich on this, that preemptive regulation is appropriate when there's a major market failure — when the Internet is broken. And the point I've simply made is that, if you look at the Internet that we had in 2015, we were not living in some digital dystopia. There was nothing broken about the marketplace in such a fundamental way that these Title II regulations were appropriate.

On whether violations would slip through the cracks

I don't believe so for a couple of different reasons. Number one — especially in the Internet age — consumers are able to complain to the Federal Trade Commission authorities, the Justice Department, the FCC, other state agencies as well. And secondly, these agencies on their own have the ability to initiate investigations. ... I continue to think that there's a very robust set of legal protections both with respect to competition and consumer protection on the federal and state levels that will continue to provide relief to consumers. ...

I think that anti-trust and consumer protection authorities stand at the vanguard to make sure that consumers and competition are protected.

Editor Amy Isackson of Morning Edition contributed to this report.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

DAVID GREENE, HOST:

So if you like streaming shows on Netflix or Hulu, these next few months may be crucial for you. That is because the chairman of the Federal Communications Commission wants to loosen government oversight of internet service providers. The current rules, commonly referred to as net neutrality, require internet service providers to treat all internet traffic equally. So what does that mean for you? Well, your cable internet company can't, as of now, slow down your Netflix and, say, speed up its own streaming service to try and frustrate you into watching something that they want you to watch. These rules were put into place two years ago after this massive debate that inspired a record number of public comments. I spoke yesterday to FCC Chairman Ajit Pai. He says he supports an open internet.

AJIT PAI: If you look at how the internet has developed over the last 20 years, I think part of the reason why we have the digital economy that's the envy of the world is precisely because we've had a free and open internet that's benefited everybody.

GREENE: But he explained why he wants now to change how the regulations are enforced.

PAI: The FCC in a party line vote imposed what is known as Title II, a 1934 set of regulations developed during the Roosevelt administration to regulate Ma Bell, the AT&T telephone monopoly. And the argument that I've made is that these Title II regulations are like the proverbial sledgehammer being wielded against the flea, that they are very prescriptive, and they don't match the internet marketplace, which is much more dynamic than the telephone monopoly was back in the 1930s. And going forward, I would like to embrace the Clinton-era approach, which we had from the 1990s until 2015. Let the marketplace evolve organically, and if you see any harm to consumers, then take targeted action to address that problem.

GREENE: Your critics would say that you talk a good game in saying that you believe in net neutrality but that you're actually weakening or proposing to weaken some of the really important enforcement that is crucial. So let me just see if we can deal with a specific. I'm sort of a "House Of Cards" guy.

PAI: (Laughter).

GREENE: What's your favorite show to stream?

PAI: There have been many of them. I just got done streaming "Broadchurch." I streamed "Game Of Thrones" - regularly sacrifice sleep in order to see some of these shows that I like.

GREENE: (Laughter) You're a streaming guy.

PAI: Oh, absolutely.

GREENE: OK. So one principle of net neutrality is - as I understand it - is I get to watch my "House Of Cards" at the same speed as anything else. My internet company can't, say, take money from a competitor of Netflix to make that stream faster and slow down my episode of "House Of Cards." Is that a fair way to look at this?

PAI: First and foremost, we want to make sure that all content that is lawful on the internet can be accessed by consumers. That's a bedrock protection of the open internet that I think everybody would agree with. Secondly, we want to make sure that we have the ability to allow all kinds of streaming companies, others who create content on the internet, to be able to reach consumers. And so on a case-by-case basis, let's figure out what types of conduct that would harm consumers or innovators and take action if we see something like that arise.

GREENE: But couldn't, say, a big company like Comcast or Verizon figure out a way without enforcements in place to make more money by favoring its own streaming services?

PAI: I don't believe so for a couple of different reasons. Number one, especially in the internet age, consumers are able to complain to the Federal Trade Commission authorities, the Justice Department, the FCC, other state agencies as well. And secondly, these agencies on their own have the ability to initiate investigations. And moreover, we have to remember that that pre-emptive regulation comes at a cost. Those very small providers that we want to inject some competition into the marketplace, those are the ones that will be disproportionately squeezed by pre-emptive regulation. And so to the extent that you're worried about the big players, we have to remember that a solution to that is to get more small players into the marketplace.

GREENE: Well, let me just ask - I mean, your bio on the FCC's website says that the agency proceeds best on the basis of consensus. If public opinion would prefer to treat the internet like a utility, are you willing to vote the other way?

PAI: We have to make a decision based on what is called substantial evidence. We have to take a look at the record and have enough of a factual grounding for our policy choice to be able to see that the agency made a reasoned decision. And so that's the aim that we have under this FCC is to make sure that we proceed in a way that preserves the free and open internet and preserves that incentive to invest in networks. And those are the twin goals that we're going to be focused on.

GREENE: Chairman Pai, thank you so much for taking the time, real pleasure talking to you.

PAI: It's been a pleasure talking to you as well.

GREENE: That's Ajit Pai. He is the chairman of the Federal Communications Commission. Transcript provided by NPR, Copyright NPR.