Trump’s F.C.C. Quickly Targets Net Neutrality Rules
The New York Times
By CECILIA KANG
WASHINGTON — In his first days as President Trump’s pick to lead the Federal Communications Commission, Ajit Pai has aggressively moved to roll back consumer protection regulations created during the Obama presidency.
Mr. Pai took a first swipe at net neutrality rules designed to ensure equal access to content on the internet. He stopped nine companies from providing discounted high-speed internet service to low-income individuals. He withdrew an effort to keep prison phone rates down.
In total, the chairman of the F.C.C. released about a dozen actions in the last week, many buried in the agency website and not publicly announced, stunning consumer advocacy groups and telecom analysts. They said Mr. Pai’s message is clear: The F.C.C., an independent agency, will mirror the Trump administration’s rapid unwinding of government regulations that businesses fought against during the Obama years.
“With these strong-arm tactics, Chairman Pai is showing his true stripes,” said Matt Wood, policy director at the consumer group Free Press. “The public wants an F.C.C. that helps people. Instead, it got one that does favors for the powerful corporations that its chairman used to work for.”
Mr. Pai, a former lawyer for Verizon, was elevated by Mr. Trump to the position of chairman after serving as a minority Republican member for the past three years. Known for being a stickler on conservative interpretations of telecom law and the limits of the F.C.C.’s authority, Mr. Pai said he was trying to wipe the slate clean.
He noted that his predecessor, Tom Wheeler, rammed through a series of actions right after the presidential election. Many of those efforts, Mr. Pai argued, went beyond the agency’s legal authority.
“These last-minute actions, which did not enjoy the support of the majority of commissioners at the time they were taken, should not bind us going forward,” Mr. Pai said in a statement released Friday. “Accordingly, they are being revoked.”
The efforts portend great changes at the federal agency at the center of the convergence of media, telecom and the internet. The biggest target will be net neutrality, a rule created in 2015 that prevents internet service providers from blocking or discriminating against internet traffic. The rules, which were created along with a decision to categorize broadband like a utility, was the tech centerpiece of the Obama administration.
On Friday, the F.C.C. took its first steps to unrolling those rules, analysts said. Mr. Pai closed an investigation into zero-rating practices of the wireless providers T-Mobile, AT&T and Verizon. Zero-rating is the offering of free streaming and other downloads that do not count against limits on the amount of data a consumer can download.
But if a provider like AT&T provides free streaming of its DirecTV programs, does that violate net neutrality rules because it could put competing video services at a disadvantage? The previous F.C.C. said in a report it saw some evidence of concern. But Mr. Pai said after closing the investigations into wireless carriers that zero rating was popular among consumers, particularly low-income households.
“The speed of the ruling and chairman’s tone are very encouraging for internet service providers,” said Paul Gallant, an analyst at Cowen. “I think it’s a down payment on net neutrality, with much more to follow.”
Last week, Mr. Pai said he disagreed with a decision two years ago to declare broadband a utility. The reclassification of broadband into a utilitylike service akin to telephones and electricity provided the legal foundation of net neutrality rules.
Mr. Pai said he had not decided how he would approach the overhaul of broadband classification and net neutrality rules, but he faces legal hurdles. A federal court upheld the rules last year and the commission could end up in a lengthy legal battle if he tried to scrap the rules.
Mr. Pai will have the help of powerful members of Congress, who have promised to attack the classification of broadband as a utilitylike service. And he is popular among Republican leaders, including the Senate’s majority leader, Mitch McConnell, who with other members viewed Mr. Pai as a loyal voice of dissent during the Obama years. At 44 and the child of immigrants from India who settled in Kansas, Mr. Pai is a fresh face for the Republican Party.
Congress could introduce legislation that limits the agency’s ability to regulate broadband providers and enforce net neutrality rules. Also under attack are privacy rules for broadband providers. In his first days, Mr. Pai scrapped a proposal to break open the cable box market.
“The agency has strayed from its core mission,” said Marsha Blackburn, a Republican representative from Tennessee who oversees a telecommunications and tech subcommittee. She has called for hearing within two weeks of F.C.C. leaders on the agency’s agenda in the new administration.
Democrats in Congress said they would fight legislation that will water down net neutrality rules. They said Mr. Pai, described as a straight-A student of telecom law, will be a tough adversary. They face great opposition by Republicans who have promised to prioritize the overturn of net neutrality.
“The key here is that its already been tested in the courts and the court upheld this,” said Anna G. Eshoo, a Democratic representative from California. “Ajit Pai is intelligent and genial, but he is not on the side of consumers and the public interest.”
Most troubling to consumer advocates was the secrecy around Mr. Pai’s early actions. The F.C.C. chairman criticized his predecessor for passing “midnight” rules without consulting other commissioners. That includes a decision to rescind the permissions of nine broadband providers to participate in a federal subsidy plan for low-income consumers. None of the providers currently serve low-income consumers, but Mr. Pai’s comments could portend a shake-up of the Lifeline low-income subsidy program.
On Monday, the F.C.C. is scheduled to appear before a federal court to defend its push to put a lid on extraordinarily expensive phone call prices from prison. But it told a judge a few days ago that Mr. Pai did not believe in the case. It’s lawyer will be there, but the F.C.C. gave up much of its time in court to an outside public advocacy lawyer, Andrew Schwartzman, who has pushed for the price caps.
Mignon Clyburn, the sole Democrat on the F.C.C., warned that the actions would directly harm consumers. “Rather than working to close the digital divide, this action widens the gap,” Ms. Clyburn said.