Four Questions Senate Should Consider Before Reconfirming FCC Chairman

This afternoon, the Senate will vote on the reconfirmation of FCC Chairman Ajit Pai. During Chairman Pai’s brief term, both his policy positions and the general administration of the agency have been the subject of close scrutiny from civil society organizations, lawmakers, and industry stakeholders. The Senate’s re-confirmation vote will serve as a referendum on the short-term direction of the FCC and the long-term development of technology policy. Implicit in this decision is a choice between two conflicting visions of the internet: a closed model constrained by the demands of large ISPs or an open platform where innovation is driven by users, coders, and engineers. To help guide the discussion, we offer four questions to help Senators and staff evaluate Chairman Pai’s tenure.

1.  Agency Administration: Will Chairman Pai provide effective stewardship over core functions of the FCC and ensure that rulemaking occurs in a transparent fashion?

Early in his stint as Chairman, Pai announced that the FCC would become more transparent, particularly in its efforts to share information relating to public proceedings. However, in the proceeding to roll back the Open Internet Order (OIO), the Commission has been less than forthcoming concerning issues with the commenting process. After the public comment website was shut down for hours (coinciding with John Oliver’s call to comment on Last Week Tonight), the agency claimed to have been the target of a directed denial of service (DDoS) attack, but refused to release evidence to back this claim. The FCC’s evasive response to the shutdown raises real concerns about its commitment to good-faith engagement with the public and erodes the credibility of the agency.

In the same proceeding, the Commission failed to make available tens of thousands of relevant complaints brought against ISPs under the existing open internet rules. Although these complaints were finally released in response to a Freedom of Information Act (FOIA) request brought by the National Hispanic Media Coalition (NHMC), they were not made publicly available until a day before the end of the public comment period. Withholding this information until the close of public comments directly conflicts with the Chairman’s pledge to provide relevant public information in a timely fashion. Even without a vow to improve transparency, the fact that the NPRM failed to acknowledge the existence of these complaints (while citing that “no formal complaints have been filed” regarding net neutrality violations) is deeply troubling.

Before reconfirming Chairman Pai, Senators should consider whether this level of transparency is sufficient for a Commissioner or the Chairman, and demand meaningful reforms to the agency commenting process to prevent similar problems in the future.

2.  Openness: Will Chairman Pai work to protect the free and open nature of the internet?

In May 2017, Chairman Pai released the formal Notice of Proposed Rulemaking (NPRM) outlining his plan to repeal net neutrality protections for internet users and internet-based companies (also known as “edge providers”). Without these safeguards in place, ISPs will be able to slow or block access to websites and services or levy tolls on edge providers for access to users, undermining the open nature of the internet. But even though the NPRM acknowledges the importance of this open model for innovation, it does not include any measures to replace these fundamental protections. Instead, the NPRM exclusively focuses on whether eliminating the existing rules might increase investment in network infrastructure.

By stripping consumers of these protections, the proposal put forth by Chairman Pai will ultimately bolster the profits of ISPs at the expense of both users and internet-based companies alike. The NPRM is built upon the assumption that ISPs will use the subsequent increase in revenue to invest in infrastructure and pass on the savings to consumers. But this trickle-down theory of deregulation offers no guarantee that consumers will ever realize any substantive benefits, either in terms of increased access or broadband speed. However, it does ensure that ISPs can leverage their monopoly position to distort markets in their favor.

Leveraging this position to exploit both sides of the market means that ISPs could both charge customers to connect to specific online services and charge online services to connect to customers. For larger, well-established internet companies, this would be an inconvenience and a hit to the bottom line, but likely not a fatal one. However, for start-ups and small businesses, a pay-to-play system could be cost prohibitive. Under the proposal put forth by Chairman Pai, ISPs would be allowed to levy fees on access to specific websites and applications, artificially inflating costs for small start-ups and effectively stifling the development of new ideas. The next video streaming service or online retailer may not be able to overcome these hurdles, leaving the internet ecosystem with only the largest entrenched players and lacking the competition that is vital to innovation.

When casting their vote for reconfirmation, Senators should consider whether Chairman Pai will preserve an open internet that will foster innovation and allow users to explore new ideas without barriers or tolls levied by ISPs. Furthermore, as Chairman Pai moves forward with efforts to repeal the OIO, Senators should demand immediate agency action that will preserve its protections against blocking, throttling, and paid prioritization.

3.  Privacy: Will Chairman Pai protect the fundamental privacy rights of internet users?

Along with open internet protections, Chairman Pai has proposed eliminating the FCC’s role in protecting the privacy of internet users. When the Broadband Privacy Order (BPO) was originally adopted in October 2016 to protect the sensitive data of internet users from being shared by ISPs, Chairman Pai (serving as a Commissioner), was one of two dissenting votes. In his statement, he argued for a “technology-neutral” model of regulation that subjects ISPs to the same rules as edge providers. While CDT does not disagree with the notion of applying consistent standards of privacy protection, this model (1) overlooks key differences between ISPs and edge providers and (2) generally weakens fundamental privacy protections for consumers.

As a complement to the congressional repeal of the BPO, Chairman Pai has sought to implement this model through his own efforts to rescind net neutrality protections for consumers. More specifically, by reclassifying broadband as an “information service,” the Commission would be stripped of the ability to issue and enforce privacy protection rules for ISP customers under Sections 201, 202, and 222 of the Communications Act. To fill this gap in oversight, Chairman Pai has proposed abdicating these responsibilities to the FTC, which lacks the broad grant of authority and rulemaking power of the FCC. As an agency with expertise on communications and explicit sources of authority to protect the confidentiality of them, the FCC should be a champion of consumer privacy, especially in the context of online communications. To eliminate, give away, or ignore this opportunity is to act against the public interest.

With the overwhelming backlash to the BPO repeal in mind, Senators should closely scrutinize Chairman Pai’s record on user privacy and consider whether their constituents will support policies that provide less protection for personal data. And as Chairman Pai seeks to cede responsibility for consumer privacy to the FTC, Senators should demand agency action that will preserve or improve upon current protections for personal data.

4.  Access: How will Chairman Pai improve the quality and availability of high-speed broadband and other critical telecommunications services?

In his first public remarks after assuming office, Chairman Pai committed the agency to help close the digital divide — the gap between those with consistent, dependable access to high-speed broadband, and those who lack such access. This divide largely breaks down along socioeconomic lines: barely half of American adults with household incomes under $30,000 per year have high-speed broadband service, compared to 94 percent of adults with household incomes over $100,000 per year. As a result, low-income families are effectively excluded from the myriad of benefits and opportunities tied to dependable high-speed broadband access. Without dependable high-speed broadband access, it is more difficult to find a job, study for class, complete homework assignments, and obtain health care.

But while Chairman Pai has primarily sought to address the gap through existing funding mechanisms, he has also implemented and proposed policies that will only widen the current divide. For example, he effectively rescinded the expansion of the Lifeline program to help more low-income households afford broadband internet, citing reports of waste, fraud, and abuse in the program. However, this decision ignores recent reforms to remedy these problems that were incorporated into the expansion of the program, while simultaneously failing to provide any constructive solutions. And given that 33 percent of Americans without broadband cite the cost of monthly service as the most significant barrier to access, any policy approach that purposefully neglects to address this component of the problem will be inadequate and incomplete.

Moreover, under Chairman Pai’s leadership, the FCC has seemingly become less concerned with improving the quality of broadband access for Americans. The Commission is currently in the midst of its annual review under Section 706 of the Telecommunications Act to determine whether broadband (“advanced telecommunications capabilities”) is being deployed in a “reasonable and timely fashion.” In its Notice of Inquiry for the proceedings, the FCC proposes measuring broadband coverage by a lowered speed standard and access to either fixed or mobile connections (compared to the current standard of fixed and mobile access).

Under these reduced requirements, the Commission appears to be satisfied with slower speeds and limited access to fixed broadband connections. Such a finding under this lower bar would preclude the use of the FCC’s authority under Section 706 to expand access, and potentially leave many families without a dependable high-speed broadband connection. In effect, it would allow the agency to “close” the digital divide merely by moving the goalposts.

The decision to treat wireless service alone as an adequate substitute for the combination of fixed and wireless broadband may illustrate how Chairman Pai chooses to address the challenge of expanding access. It suggests that the current Commission does not see the need to expand fixed broadband into underserved areas where mobile service is available, despite the relative disadvantages of mobile broadband. And with only wireless access, many Americans could suddenly lose their connection to the internet at the discretion of their carrier with limited recourse.

In light of these actions, Senators must critically evaluate whether Chairman Pai will meaningfully work to position the U.S. as a world leader in broadband speed and availability before voting on his nomination. Moving forward, Senators should demand that efforts to close the digital divide include measures that will (1) lower costs, (2) bolster speeds, and (3) expand access to underserved communities.