Former Federal Communications Commission chairman Ajit Pai has joined Searchlight Capital as a partner, the investment firm said Monday.

Pai led the FCC as chairman from 2017 to 2020 under then President Donald Trump administration and first joined the Commission in 2012 after being appointed by then President Barack Obama. Prior to his FCC appointment, Pai served in various positions at the U.S. Department of Justice and the U.S. Senate, was a partner at the law firm of Jenner & Block and worked as in-house counsel at Verizon Communications. At Searchlight, he will focus on the company’s investments in the technology, media and telecommunications sectors.

During his tenure as chairman of the FCC, Pai helped advance major initiatives in 5G and other wireless technologies, led programs to help close the digital divide, promote innovation, protect consumers, public safety, and national security, and helped make the agency more open, transparent, and diverse. 

“TMT has always been a core focus at Searchlight and in recent years we have seen the opportunities in these sectors grow, a trend accelerated by the COVID-19 pandemic,” Searchlight founding partner Eric Zinterhofer said in a press release. “Given our strong presence in this space and Ajit’s distinguished career in the industry, we are excited to welcome him as our newest partner. His outstanding accomplishments at the FCC had a material impact on the broadband, wireless, and broadcast sectors, and his deep knowledge will be invaluable in accelerating our efforts in TMT and digital infrastructure.”

Searchlight is a global private investment firm with more than $8 billion in assets under management, with offices in New York, London, and Toronto and currently has holdings in Liberty Latin America, Univision Communications, Hemisphere Media Group, Ziply Fiber and others.

“I am excited to join the Searchlight team and help build on the firm’s demonstrated success in the technology media, and telecommunications sectors, especially with respect to digital infrastructure—an area that is essential to consumers and businesses in the United States and around the world,” Pai said in a press release. “Searchlight’s flexible investment strategy and partnership-driven approach have distinguished it from its peers, allowing the firm to capitalize on opportunities that provide value for its clients and the companies it invests in. I look forward to joining Eric, Erol, and Oliver, and contributing to the firm’s continued investment efforts.”

Fuse Media has filed a complaint with the Federal Communications Commission charging that AT&T and its DirecTV unit are illegally discriminating against it in carriage negotiations and that AT&T’s behavior could drive Fuse into bankruptcy.

The complaint filed on Dec. 11 noted that AT&T's behavior has changed since it acquired Time Warner, now AT&T’s WarnerMedia division. WarnerMedia owns cable networks that compete with, and offers programming that is in some ways similar to what Fuse and its Fuse Music (FM) channels provide.

Also read: Fuse Says It is Being Dropped by Comcast

“AT&T’s conduct would also eliminate the only remaining Latino-owned and managed cable network,” Fuse said in its complaint.

In a statement Fuse said it would fight AT&T’s practices. "AT&T, the largest vertically-integrated media company, is using its immense market power to treat Fuse Media unfairly and unequally, particularly compared with networks that AT&T owns and operates,” Fuse said.

“ Fuse Media is an independent, minority-owned and led media company, and is in fact the only remaining cable network that is Latino-owned, controlled and managed. For 16 years, we have been committed to engaging, entertaining and empowering young, Latino and multicultural Americans; we will always fight relentlessly and vigorously for our audience and against discriminatory practices. Since January, Fuse has been the last English-language network carried by AT&T that serves Latinos,” Fuse said in its statement. “If AT&T truly values minority voices, then their words must match their actions, especially during a time in which our nation is undergoing a seismic social awakening.  We are hopeful that AT&T will reverse course and negotiate in good faith moving forward.”

“We treat all programmers fairly, including Fuse,” an AT&T spokesman said. “They want the FCC to order us to provide programming our customers don’t want or value. We look forward to responding.”

In the complaint, Fuse charges that after being mainly non-responsive in negotiations since August, AT&T made an offer to carry Fuse, but Fuse is calling that offer a “mockery.” 

Also Read: Fuse, Dropped by Comcast, Blasts Operator

Exactly when AT&T’s carriage of Fuse ends was not disclosed. 

Fuse is seeking that the FCC enjoin AT&T from further program carriage discrimination and order it to carry Fuse and FM on equitable terms that do now restrict Fuse’s and FM’s ability to compete fairly. Fuse also asks for any other relief the FCC deems appropriate.

In its complaint, Fuse noted it had a similar issue with Comcast. After an FCC order regarding carriage of independent programmers expired on Sept. 1 2018, Comcast dropped Fuse, leading to Fuse declaring bankruptcy in 2019. 

Also Read: Fuse Media Expected to Emerge from Bankruptcy Soon

“Now Fuse is faced with the same existential threat, now in the hands of the other major vertically integrated distributor,” the complaint said.

Also Read: Latino Management Group Buys Control of Fuse Media

After emerging from bankruptcy, Fuse management acquired control of the company from a group of private-equity firms, making it a minority-owned media company.

AT&T had carried Fuse under agreements dating back to 2006, according to the complaint. DirecTV also carried Fuse before AT&T acquired DirectTV in 2015. AT&T’s behavior changed after AT&T acquired Time Warner. Fuse was pushed onto a less-distributed tier while WarnerMedia’s Turner cable channels enjoy broad carriage, the complaint said.

With its current agreement about to end, Fuse made a presentation to AT&T in August and followed up fruitlessly until Nov. 25, when Fuse notified AT&T it would be making a complaint to the FCC.

On Dec. 1 Fuse got a counter offer from AT&T that Fuse said was “insultingly hollow.” Beside setting a low sub fee, AT&T sought other undisclosed conditions restricting how Fuse can do business.

In its first count, Fuse charges that it will be “significantly hampered in its ability to compete fairly” under the terms AT&T proposed. Its second count says Fuse will be “significantly" hampered in its ability to attract advertisers.”

FCC Chairman Tom Wheeler has issued proposed set-top box rules that aim to bring more choice to the video market and reducing the need for consumers to rent out devices from MVPDs.

The proposal, billed as “simplified consumer-first, app-driven” rules and one that seemingly favors the approach preferred by cable operators, telco TV providers and satelite TV providers, will be voted on by the commission at its next open meeting, set for Thursday, Sept. 29.

RELATED: Wheeler Proposing Set-Top Standards Enforcer

In a fact sheet outlining the details of the proposal, the rules, if adopted, will give the largest U.S. pay TV providers, serving 95% of the nation’s pay TV subs, two years to come into compliance.

RELATED: Comcast Blasts Set-Top Rules Proposal, Says It Exceeds FCC’s Authority  

More specifically, large providers will have two years to comply, while medium-sized MVPDs will get an additional two years. Smaller operators (those with fewer than 400,000 subs), will not be forced to comply, but can provide apps and software “as appropriate for their business.” 

According to the proposal, the rules will require pay TV to offer consumers a free app, controlled by the MVPD, to access all the programming they pay for on a variety of devices, including tablets, smartphones, gaming systems, streaming devices or smart TVs. That, in turn, will mean consumers are no longer required to rent boxes from their provider. Notably, the proposed rules do not address data caps.

Pay TV providers are also required to provide their apps to widely deployed platforms, such as Roku, iOS, Windows and Android. FCC officials said the definition of widely deployed means operating system that has had shipments in the U.S. of at least 5 million devices during the previous year. 

RELATED: FCC’s Magical Number: 5 Million

The rules also call on MVPDs to support integrated search for linear and VOD, alongside other video services accessible on the device, such as OTT offerings. Pay TV providers would also be barred from discriminating search results or promoting the pay-TV app over other sources of programming in the search function.

MVPDs must also provide consumers with “an equivalent ability to access content via the pay-TV app as they have in the set-top box.” Because the aim is to replicate all elements of a pay TV provider’s service on qualified retail devices, the apps must also comply with existing consumer protections such as emergency alerting, privacy and accessibility functions.

One potential snag with the FCC’s proposal is that MVPDs don’t have digital rights for all programming, making it difficult to replicate the full pay TV service on an app. FCC officials said the proposal requires that MVPDs treat programmers the same on a set-top as they do on apps, believing that the rules will spur the two sides to come together to do deals that bring unify the rights for set-tops and apps. Given that the largest MVPDs have two years to comply, "they have plenty of time to do that outreach,” FCC officials said. 

To address copyright and carriage contract concerns, the proposed rules require that pay TV content will only be opened by the pay TV app using the “robust security protocols already built in to pay-TV apps.” Additionally, programming will continue to be controlled by the pay-TV provider from end-to-end, protecting content and maintaining all contracts and agreements currently in place, the proposed rules say.

The pay-TV’s software will also manage the full suite of linear and on-demand programming licensed by the pay-TV provider, and the existing distribution deals  and licensing terms between MVPDs and programmers will be unchanged.

Standard License

The FCC’s proposal also will pave the way for a “standard license” that governs this process for placing an app or device on a platform, with programmers having a “seat at the table to ensure that  content remains protected.”  The FCC will “serve as a backstop” to keep tabs on the process to that nothing in the standard license “will harm the marketplace” for competitive video devices.

The rules also aim to be “technology-neutral,” meaning they won’t mandate a specific standard for app development, though MVPDs must make apps for devices that meet the “widely deployed” threshold in the rules. 

According to FCC officials, the licensing body will create a standard license that “governs the rules of the road” for any device or platform that wants access the MVPD apps. However, the FCC does propose, down the line, to retain some oversight over the licensing bodies.

That’s because “[W]e learned our lesson in CableCARD,” officials said, holding that cable operators were able to “manipulate the licensing process” and tamp down true competition for devices. 

FCC Officials: Apps Approach Will Meet Goals 

FCC officials were also asked why Wheeler went with an apps-based approach and seemingly abandoned an alternative idea that identified three “core information streams” (service discovery, entitlements and the video programming itself) that would need to pass from MVPDs to the device maker. Cable operators, telcos and satellite TV providers favored the apps angle, while many CE-focused companies, including Google, wanted rules based on the three-stream proposal. 

FCC officials said that the original NPRM sought comment on a number of alternatives, which were vetted by the Downloadable Security Technical Advisory Committee (DSTAC) and presented to the FCC last fall, and found that the MVPD-controlled apps approach was aligned with the goals of the initiative, and made those goals easier to achieve than the alternative, and vehemently disagreed with the notion that the current proposal represents a “significant retreat” from the three-stream idea. 

What About Satellite?

FCC officials also recognized that satellite TV providers, which don’t have inherent two-way connectivity into the home, have a “unique architecture” and that, in order to comply with the rules, will likely need to deploy and maintain one box – and only one box – inside the customer’s home that can talk to retail video devices.

But the proposed rules likewise leave it up to the MVPD how they deploy an architecture that fits within the scope of the rules. The proposal doesn’t dictate one technical approach over another to support apps, and provides enough flexibly in cases where in-home equipment is required, FCC officials explained.