Newly appointed FCC chairman Ajit Pai has already chipped away at net neutrality, slowed a program that assists low-income households with broadband access, and hurt efforts to reform exorbitant calling fees for inmates — and that’s just his first two weeks on the job.
The chairman of the FCC has exceptional power over what the commission does and how it functions. And that means Pai, more than anyone else right now, has control over the fate of not just hot-button issues like net neutrality, but the competitive landscape of the cable and wireless industries.
Pai’s oft-repeated mission statement has been to “[eliminate] unnecessary and burdensome rules” at the commission. But so far, that’s meant scaling back vital protections for the internet that advocates and millions of consumers loudly fought for and won. Last week, he both eased transparency requirements and approved efforts from AT&T, Comcast, and others to divide up the internet.
As Pai continues to tweak regulations, he has the ability to undermine core tenets of net neutrality and broadly reshape the FCC in the process. Some Republicans have long hoped to turn the FCC into a toothless management office, and these early actions demonstrate Pai’s power to help them do it.
The people responsible for enacting net neutrality rules are already worried. In a conversation with Backchannel last week about rumors that Trump’s transition team wants to “modernize” the FCC, former commission chairman Tom Wheeler called the efforts “a fraud” meant to please telecom companies.
A former counselor to Wheeler, Gigi Sohn, gave the same warning just last month. "You're gonna hear a lot ... in the next six months about restricting and reforming the FCC,” Sohn said at the State of the Net conference. “What that really means is that folks want to eliminate the FCC's role in promoting competition, and protecting consumers, and promoting fast fair and open networks."
There are two ways Republicans can go about curtailing the power of the FCC. The more transformative method is to overhaul telecom law in order to strip out its strength as a regulator and its mandate to look out for the public good. But even with Republican control of Congress and the presidency, supporters of net neutrality and the FCC suggest it would be a challenging and time-consuming process.
The easier, if less transformative method — since core functions of the FCC are ultimately dictated by law — would be to have the FCC reorganize itself, which it can do in small ways on its own and in larger ways with a nod from Congress.
The Trump administration and Republican members of Congress have already expressed interest in pursuing both avenues for reform.
Trump's transition team has recommended an agency restructuring with a focus on deregulation, according to Multichannel News. Pai hasn’t specifically addressed restructuring the commission, but he has signaled a disinterest in blocking mergers and said that “removing unnecessary regulations” is something he’s “touted on a perpetual loop” since taking the job.
And despite the apparent difficulty, Republican members of Congress plan on rewriting telecom law. "It is clearly time for FCC reform," Senator Thune (R-SD), chairman of the Senate's Commerce Committee, said during a conference last month. "We have had many conversations about improving the agency, and this year presents a real opportunity to turn those conversations into solutions."
Determining what that means for the future of the FCC is tricky. The last update to the Communications Act was passed in 1996, and ever since then, there’s been constant talk about reforming the FCC, but relatively few concrete proposals on what a truly reworked law and commission would look like.
“I'm open to be part of that conversation, but it never has gone beyond ‘there needs to be a rewrite,’” says Representative Eshoo (D-CA), who until this year was ranking member of the House subcommittee that oversees the FCC, in a phone call with The Verge. “I really think that nothing has gone beyond those sentences being stated many many times by many members.”
Without anything firm, we’re left divining possibilities from existing statements and proposals.
Existing suggestions for FCC reform have been fairly small in scope. Recent bills included language that would require the agency to publish its pending rules earlier (Pai is now putting this into practice) or give the commissioners flexibility to meet in private to discuss their work. Some suggestions, like improving the commission’s ability to hire engineers and economists, even have a degree of bipartisan support.
There’s also a common refrain among Republicans that current telecommunications law is dated, because it hardly mentions the internet (leading to outcomes favored by net neutrality supporters, like service providers being controlled by utility-style rules). There’s an idea that the commission’s regulatory distinctions between cable, radio, wireless, and so on ought to be streamlined so that it isn’t controlling services that increasingly used for similar purposes — like watching TV — in different ways.
How any of these changes are implemented could lead to very different results. Chris Lewis, VP of the consumer advocacy group Public Knowledge, says the specific implementation of reforms is going to make all the difference.
"We advocated a few years ago that the rules around [TV distributor] competition and consumer protection should be extended ... to online video distributors," Lewis says. "If you're talking about that sort of streamlining [regulations], then yes, that makes sense. But if you're talking about streamlining that strips out basic consumer protection and competition, then really the devil is in the details."
Eshoo has a similar warning. “If in fact there is an undertaking to do any kind of rewrite, you have to have a solid foundation that's established in terms of operating principles. What exactly do we want to reform?” asks Eshoo. “Otherwise, it'll become a Christmas tree with goodies hanging all over it for what every lobbyist in town wishes for.”
Early indications are that the Trump administration is hoping for broader changes, with little interested to consumer protections or regulating the telecom industry. Multichannel News reported that the new president’s transition team has recommended streamlining the agency so that it no longer regulates communications methods like cable and wireless in different ways. That, on its face, sounds reasonable, except the transition team reportedly also wants the FCC's ability to review mergers and encourage competition handed off to the Federal Trade Commission. That would strip the agency of its most powerful protective tools.
In a conversation with The Verge last week, University of Florida professor Mark Jamison, who worked on Trump's FCC transition team, said he'd like to see the commission limit its scope to the "management of radio spectrum and, if you're going to have subsidies for rural broadband, that would be by this agency as well."
Regulating telecom competition would still be part of the commission's duty, but Jamison imagines the commission using this power "only if there's a monopoly," and not as a preventative measure, the way it does now.
That combination would essentially make the commission into a clearinghouse for wireless spectrum, with little ability to protect consumers or direct the market to a more competitive place.
Jamison declined to discuss the transition team's recommendations, saying that they were confidential, but his remarks align with some details of the report.
Senator Thune was also critical of the FCC’s regulatory abilities during a speech at State of the Net, saying the commission has “the ability to overregulate the digital world” and that November’s election proves consumers are tired of it. That’s almost certainly a poor conclusion to jump to — Trump lost the popular vote by a large margin, and the 2014 net neutrality proceedings revealed strong public support for keeping the internet open — but Thune is using Republicans’ position of power to advocate for change nonetheless. “One way for us to address this concern in the digital space is to both modernize how the FCC operates and to reform what the FCC is allowed to do,” he said.
A spokesperson for Representative Walden (R-OR), chairman of the House subcommittee on communications and technology, which oversees the FCC, did not respond to requests for comment.
This handing off of the FCC’s regulatory abilities under the pretense of “modernization” is exactly what Wheeler, the former chairman, was calling a fraud. "The FTC has to worry about everything from computer chips to bleach labeling," Wheeler said. "Of course, carriers want [telecom issues] to get lost in that morass."
That kind of change can’t just happen with a directive from Pai. An agency restructuring that would strip it of antitrust abilities in theory requires an act of Congress. “It’s difficult for [the FCC] to say, ‘Well this doesn't work anymore,’” Jamison says. “The law is still there, so that's really up to Congress to update those laws.”
And rewriting telecom law isn’t easy. It’s traditionally been a bipartisan effort, and given the margins in Congress, it would have to be here, too.
"I assume any effort to update the Telecommunications Act would end up being bipartisan again this time around for it to be longstanding and have the consensus of what all stakeholders want," says Lewis, of Public Knowledge. "It will take some time because it's a complicated and long act."
“Do you know how many years it took to write the Telecom Act of 1996?” Eshoo asks. “Oh my God. It was at least a decade.”
Correction February 10th, 2:34PM ET: Representative Eshoo is no longer ranking member of the subcommittee on communications and technology, as this article initially stated. She remains on the committee, but left the leadership position this year.