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FCC member Ajit Pai opines on Communications Act review

Federal Communications Commission member Ajit Pai released the following statement about a proposal coming out of the House Energy and Commerce Committee to revise the Communications Act of 1934:

“I welcome the announcement by Chairman Fred Upton and Subcommittee Chairman Greg Walden that the Energy and Commerce Committee of the U.S. House of Representatives will examine how to modernize the Communications Act to reflect the realities of a 21st century marketplace.   Some provisions of the Act have yellowed with age, unchanged, since the Great Depression; even those of more recent vintage predate the transformative impacts of the Internet, competition, and innovation.

In a converged industry, it does not make sense to apply different rules to providers and technologies that compete in the same markets.   Convergence is now the norm, and consumers, companies, and the Commission would be better off if our laws and regulations recognized as much.

As the Committee moves forward with its work, I stand ready and able to assist in whatever way I can.”

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Pai commends House commerce committee on consolidated reporting bill

Posted July 31st, 2013 in Congress, Federal Communications Commission and tagged , by Alton Drew

Here are comments made by Federal Communications Commission member Ajit Pai about the House Energy and Commerce Committee’s passage of the Consolidated Reporting Act:

“I commend the House Energy and Commerce Committee for passing the Federal
Communications Commission Consolidated Reporting Act and applaud Subcommittee Chairman
Walden, Ranking Member Eshoo and Representative Scalise for their leadership in sponsoring
this common-sense piece of legislation. The FCC’s reporting requirements are numerous,
burdensome, and sometimes obsolete. Replacing these disparate obligations with a single
biennial Communications Marketplace Report will make better use of limited Commission
resources. It will also provide Congress and the public with a comprehensive and far more
useful set of data that better reflects the realities of today’s converged marketplace. I hope that
this bipartisan legislation will soon be signed into law.”

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The FCC needs a Joshua Wright type to step up

Today Federal Trade Commission member Joshua Wright offered a definition of unfair method of competition during remarks made before the New York State Bar Association’s antitrust section. Mr. Wright argued that unfair method of competition as discussed in section 5 of the Federal Trade Commission Act left a lot of room for re-interpretation especially as commissions change due to members joining and moving on. A policy statement that set the definition more into regulatory stone would provide businesses with more certainty as they contemplate the appropriate business models necessary for entry into a market.

Unless Mr. Wright can sell his colleagues on the ideas he presented today, I wouldn’t worry about an in-depth analysis of what he offered, although what he offered was pretty substantive. The reason his proposed policy statement caught my eye, quite frankly, was because the statement was posted in a tweet by Federal Communications Commission member Ajit Pai which signaled to me that the statement was worth a look see.

My take away as it concerns the FCC is that the nation’s regulator of interstate telecommunications seems to skirt the issue of competition in the wireless telecommunications market. The FCC currently has a docket opened to address the state of competition in the wireless market. The FCC also avoids any declaration of competition in the wireless market which is peculiar given the existence of four major national players; AT&T, Verizon, Sprint, and T-Mobile, and a myriad of smaller carriers such as Virgin Mobile, Leap Wireless, ClearWire, and Boost Mobile.

A major part of the FCC’s problem, and I would suspect the FTC’s as well, is that they are too focused on the actual number and size of the players in the market. The very word, “market”, should be enough to set the FCC’s focus properly. Market is a relational term, and when we discuss markets, we are talking about the primary demand and supply relationship between consumer and producer. Given that the preamble of the Communications Act asks the FCC to concern itself with universal access by consumers to a communications network, the FCC has been focusing on just about everything else; from how much revenues T-Mobile generates to whether we, as consumers, actually give a damn about what management techniques Verizon uses to bring us broadband services.

Instead, the FCC’s focus should be on whether the consumers’ demand for services is being met; is the market providing the output necessary for meeting the communications needs of consumers. Given the increasing demand for smartphones and tablets with no reported problems with carriers opening up accounts, and again given the existence of four major carriers and quite a few regional carriers, the FCC should have been able to create a definition for competition that reflects what is happening in the market. It hasn’t done so. It hasn’t even tried.

What we need is a little boldness; for the FCC to step out and say, here is our policy statement on the meaning of competition. Here is what we mean by a competitive market. Until then, all I see is a 17th, 18th, and 19th state of wireless competition report that fails to definitively state that we are moving in the right direction.

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Is the FCC ready to practice a little net neutrality on itself?

Federal Communications Commission member Ajit Pai today shared with the Federal Communications Bar Association some thoughts on injecting some efficiency into the review process at the FCC. You can see his remarks here.

I feel Mr. Pai’s frustration. I remember as a analyst with Telecommunications Reports International my initial bewilderment with how long it took the FCC to make a decision in a docket. I had been spoiled during my tenure at the Florida Public Service Commission where staff and commissioners worked together to move items as quickly as possible through the review process. In addition, we were pretty transparent about the process, including seeing commissioners have lively and invigorating public debates on the issues.

Ironically, Mr. Pai proposed implementing an online dashboard that would give the public a play-by-play view of how well the FCC is meeting its review deadlines and other goals. It’s a great idea, but unless Mr. Pai is a great diver or swimmer, he shouldn’t hold his breath. As much as the FCC talks about robustness and transparency in the industry, allowing a robust public review of FCC actions through a transparent mechanism like an online dashboard is not a part of this FCC’s way of doing business.

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Pai gives his thoughts on where FCC may go on net neutrality

Posted December 6th, 2012 in Broadband, FCC, Government Regulation, net neutrality and tagged , , , , , by Alton Drew

Federal Communications Commission member Ajit Pai today gave his assessment on where the FCC may go on broadband regulation should the United States Court of Appeals-DC Circuit decide to uphold the FCC’s net neutrality rules issued back in December 2010. Here is an excerpt from his opening remarks before the Phoenix Center :

“On a more serious note, I would like to spend a few minutes this morning previewing the
year ahead in broadband policy. I believe that 2013 will be a watershed year. And the most
important action probably will not occur either at the FCC or on Capitol Hill. Instead, it will
take place in the federal courthouse about a mile away on Constitution Avenue. At some point
next year, the D.C. Circuit likely will decide the fate of the Commission’s 2010 net neutrality
order. Whatever the court’s decision, the consequences are likely to be profound.

Should the D.C. Circuit uphold the FCC’s order, I would expect to see revitalized efforts
to expand the Commission’s regulation of the Internet. In particular, I would not be surprised if
the FCC looked into whether we should stiffen our oversight of the network management
practices of wireless broadband providers and whether we should begin to regulate usage-based
pricing. With a court victory under the Commission’s belt, I believe that the net neutrality order
would be the first step, not the last, on our regulatory path.

I expect that a court victory also would result in more calls to enforce the FCC’s net
neutrality rules. To date, we’ve received few complaints that these rules have been violated, and
we’ve done little with any that have been filed. But if the regulations are upheld, the agency
could well receive more complaints alleging violations and it could spring into action
adjudicating them. Uncertainty over how the FCC would resolve these complaints could persist
for some time.

Now let’s look at the opposite (and perhaps more likely) scenario. What would happen if
the D.C. Circuit decides that the FCC lacked the authority to adopt the net neutrality order? The
big question confronting the Commission would be this: whether to abandon the drive to regulate
network management practices or instead to sidestep the court’s decision by reclassifying
broadband as a Title II service.

For what it’s worth, I have already made my view on this matter clear. Under no
circumstance will I support Title II reclassification. I am convinced that grafting creaky,
burdensome common carrier regulations onto the Internet would dramatically slow broadband
deployment, reduce infrastructure investment, frustrate innovation, hamper job creation, and
diminish economic growth.”

Investors, naturally, should keep their fingers crossed that the court does not uphold net neutrality rules thus giving the FCC authority to apply common carrier treatment to broadband providers. The just and reasonable standard when it comes to pricing and to whom service can be provided a priori would see carrier costs of service increase with pressure from the FCC on pricing. Not only would grass roots advocates scream about justifiable price increases implemented to cover compliance the costs, advocates would press for additional hearings on network management practices.

Based on the court’s rejection in Comcast to treat broadband as a Title II service, I do believe that Verizon should be successful with its opposition before the DC Circuit to the FCC’s net neutrality rules. I would have to conduct a more thorough analysis to draw a definitive conclusion.