News Story

FCC Chairman Denounces State, Local Obstacles To Faster Internet

‘You need to have a consistent policy ... at the federal level’

Federal Communications Commission Chairman Ajit Pai talked with the Mackinac Center for Public Policy in Lansing Thursday about his regulatory philosophy of closing the digital divide and what the commission has accomplished under his leadership in the last 18 months.

“To me, there’s no higher mission [for the FCC] than closing what I call the digital divide — the gap between those who have access to the internet and those who don’t,” he said of something that’s a personal and professional goal for him. “I want to make sure that every American has a chance to take charge of his or her future in the digital era.”

Pai, who was nominated to the commission in 2011 by President Barack Obama and appointed chairman by President Donald Trump in 2017, said his philosophy as chairman is guided by free markets, the rule of law, and basic principles of economics.

“I believe markets, as opposed to governments, have delivered far more value for consumers. Light-touch regulation, as opposed to preemptive Washington-based regulation, is much more valuable in the long run, and I think the success of the internet demonstrates that,” he said. “Secondly, the rule of law is very important. The agency does not just make things up as it goes along. Something might be a good idea as a matter of policy but if Congress has not given us the authority to enact that policy than we are straying beyond the bounds of our legitimacy. Additionally, we have to respect basic principles of economics and engineering.”

“I suspect that there are parts of Michigan just like in my home state [Kansas] — maybe in the UP for example — where you can’t get access, and that’s due in part to the fact that these networks just can’t find a business case for being built,” Pai said.

Jarrett Skorup, director of marketing and communications for the Mackinac Center, asked Pai what state and federal lawmakers can do to provide access to people in rural areas.

“From the FCC perspective, we have two basic tools in the toolbox: One involves the federal subsidy program that Congress has tasked us with overseeing, called the Universal Service Fund,” he said. “And the other one is modernizing our regulations to make it easier and cheaper for companies to build these networks.”

Pai said the federal subsidy program has been reformed under his watch, instead targeting what he called the “unserved parts of the country” with the subsidies.

Pai added that the commission is trying to create a clearer roadmap of rules to help states tackle obstacles to broadband.

“I think the most important thing that state officials could do … is to create a consistent set of policies,” he said. “If you’re a company, big or small, it is difficult if not prohibitive to jump through the different hoops of regulatory review on the federal level, on the state level, perhaps the thousands of municipalities that are involved.”

Speaking of the implementation of Obama-era net neutrality rules in 2015, Pai said, “Imposing these rules that were developed in the 1930s to guide a 21st-century technology was fundamentally the wrong answer. Secondly, the effects of these regulations were holding back investment and innovation in networks.”

Pai added that the commission acted correctly to institute a transparency rule that requires internet service providers to make clear their business practices.

The FCC chairman said he believes implementing net neutrality regulations at the state level, such as California and Hawaii have attempted to do, would be illegal and unwise.

“The internet involves inherently an interstate activity,” Pai said, “You can’t have 50 different state jurisdictions, however many municipalities, taking a bite of the regulatory apple. You need to have a consistent policy, and that policy under the Constitution and the laws of the United States, as I read it, can only be set at the federal level.”