WASHINGTON — In his first three months at the Federal Communications Commission, Republican commissioner Ajit Pai has shown himself to be a solid ally of senior Republican Robert McDowell in promoting the marketplace and pushing against what they see as government overregulation. And though — like McDowell — he speaks of the general comity of the commission, he has already dissented on two votes.
He joined with McDowell to oppose the finding, in a programmingaccess complaint, that Comcast discriminated against independent sports network Tennis Channel in favor of networks controlled by NBCUniversal — a federal court has since stayed the agency’s ruling. He also took issue with the FCC’s decision to suspend its deregulation of rates for access to the business broadband plants of telcos AT&T and Verizon Communications.
Pai talks with conviction about government getting out of the way of innovation and initiative, a passion he attributes in part to the example of his parents, who immigrated to the U.S. from India. He has outlined a bold vision for the FCC, including process reforms, such as “shot clocks” on decisions, and a new bureau to speed approval of new technologies — though, at least for now, he must press his case from a minority seat.
In his first sit-down interview since he was sworn in last May, Pai talked with Multichannel News Washington bureau chief John Eggerton about speeding up the FCC’s decision-making, his reluctance to put over-the-top providers in the same regulatory boat as other pay TV providers and why he thinks the FCC will have a tough time defending the Tennis Channel decision in court.
MCN: You talked during your confirmation hearing about revisiting the Cable Act. What needs revisiting, and why?
Ajit Pai: That is a question that has to be directed to Congress. It is a matter for legislative — not administrative — discretion, but a lot of folks in Congress and the industry have said the marketplace has changed, and not just in the cable context. Convergence is a reality, not just an abstraction as it was 20 years ago [when the Cable Act was passed]. Whether and how to change the Cable Act or the Communications Act more generally to account of the changing marketplace is something they will have to consider, if not in this Congress then in future Congresses.
MCN: Should the FCC take some action in the open docket on retransmission consent, and what should it do?
AP: Well, this is one area where the commission’s authority under the statute is somewhat circumscribed. We have authority to enforce good-faith negotiations between the parties, but beyond that, the statute doesn’t give us tremendous latitude.
MCN: In the docket, the FCC suggested that it would be helpful to come up with clearer standards as to what is or isn’t negotiating in good faith. Would you agree?
AP: I think that to the extent the commission has such authority, and doing so would provide more guidance to the parties and, hopefully, avoid some of these disputes or resolve them a little more quickly, that is something I would be open to considering.
MCN: What should the definition of a multichannel video-programming distributor be?
AP: That is an open question, as you know. I start from the premise that over-the-top distribution [via the Internet] has been of tremendous benefit to consumers. I think it has entered the marketplace in a way that could not have been anticipated to this extent even five years ago. So, as a general matter, I don’t think the commission should erect artificial barriers that are going to prevent innovation.
That said, I haven’t made a firm decision one way or the other as to how over-the-top distributors should be classified, whether it is MVPDs or what have you.
In the context of a concrete proposal, I would have to study the record on it.
MCN: The commission issued its eighth broadband report recently and concluded, for the third time in a row, that the service was not being deployed in a reasonable and timely manner. You disagree?
AP: I do. In my view, I think that comparing broadband deployment from one point in time in the past to now would show that by virtually any metric it is reasonable. We have made progress. Broadband penetration now is higher than it has ever been. Consumers have more choices than they have had in the past and I think, with respect to the particular kinds of service, they have faster service now. So, from my vantage, the glass is half full.
MCN: The FCC has issued a notice seeking comment on how to conduct the ninth report differently. What would you change?
AP: I think it would be helpful to get a more accurate view of the full panoply of broadband technologies that are being used [the FCC currently doesn’t count mobile broadband toward its “reasonable and timely” benchmark] and how effective they are in the current competitive marketplace. You have mobile broadband, for example, an area where we could stand to use more granular data as to what the deployment statistics are.
MCN: Should mobile have a separate standard for speed and latency, or should it be held to the same standard as wired broadband?
AP: Ideally, we should try to focus on how broadband technologies and speeds address consumer preferences. Some consumers who might need a lesser speed and pay less for it and are satisfied with that; that’s something our analysis should take into account. Adhering to a one-size-fits-all metric for all broadband users across the country might not always take into account some of the richness and texture of different consumer segments of the broadband market.
MCN: You laid out a pretty comprehensive vision for the FCC. First, could you give us the abbreviated version, and second, what can you do about it while in the minority?
AP: With respect to the big picture, I would divide it into process and substance. From a procedural standpoint, the agency needs to act with more dispatch. especially in the context of a regulatory agency charged with overseeing one of the most dynamic parts of the economy. I think the commission has to act at the same pace as this industry, otherwise it risks inadvertently impeding innovation and investment.
Competition won’t happen if the commission acts with undue delay. So, the commission should do what it can to act more quickly.
MCN: What can it do?
AP: One way would be to use sunset clauses and setting deadlines for acting on applications for review and petitions for reconsideration.
In terms of substance, No. 1 is spectrum — getting more spectrum into the commercial marketplace and doing what we can to make the use of spectrum more efficient. No. 2 is infrastructure investment, clearing out some regulatory barriers and maximizing private-sector incentives to develop and deploy nextgeneration networks.
MCN: What do you do about the FCC delays that are systematic to the politics of the place? For example, opening up a docket as a signal to the industry but with no plans to close it?
AP: I think there are a number of ways to deal with that. One way, as I said, is to establish a deadline for the commission to act. That propels the agency to action, one way or the other, to resolve the proceeding. Another way is analogous to the Supreme Court cert [petition for writ of certiorari] process. If a bureau issues a decision and a party to that decision seeks full commission consideration of an application for review, they can’t go to court until we act.
One of the things I have proposed is that if the commission doesn’t act within 60 days, the decision of the bureau is affirmed using the reasoning adopted by the bureau, unless one commissioner objects, in which case the full commission would review the matter and reach a decision.
That is a small procedural change — which, by the way, is consistent with the Communications Act and the Administrative Procedures Act — that would allow us to dispose of a lot of applications for review that may or may not be controversial. At least it gives some sense of certainty to the parties in the proceeding and to the general public, and it allows people to go forward.
I think there are things the commission could do that are not partisan or especially politically controversial that could help us become more responsive in closing these proceedings.
MCN: How do you work from the minority seat to convince others that is the right path forward?
AP: I think [by] having an open dialogue with the chairman and majority commissioners, as well as with agency staff. One of the hallmarks of this commission is that — not just under the current chairman, but generally — it has a culture of openness and receptivity to new ideas.
The cert process, for example, is an idea that we got from Andy Schwartzman [former senior vice president and policy director of publicinterest law firm Media Access Project] and I have talked to the chairman personally about it, and he seemed intrigued by it. That is a good example of [a change] that doesn’t redound to the benefi t of one political party or even one commissioner. And I think that is one area where we can work together to establish new procedures to make the commission more efficient.
MCN: You have talked about FCC reform, and you strike me as someone who favors less bureaucracy. But you have proposed creating a new innovation bureau, the Office of Entrepreneurial Innovation.
AP: What I have proposed is repurposing a current office, the Office of Strategic Planning and Policy Analysis, and focusing it on entrepreneurship and innovation. So, OEI would focus on getting services and products that have to be approved by the commission into the commercial marketplace more quickly.
It would also focus on making sure that other regulatory proposals that are being considered within the building don’t stand in the way of innovation and investment, so it would have input, ideally, on a broad range of rulemakings, so that whatever the commission was thinking about doing was pro-competitive.
MCN: We’re told there will be an item on spectrum auctions at the September meeting. What does the FCC need to do to get spectrum auctions right?
AP: I think it has to fi rst commence the rulemaking process. But it should also make sure that the rules of the road are reasonable, simple, easy to understand and easy to administer from an agency standpoint. I also think the commission should do outreach to stakeholders early and often, both to hear their views on what they think we should do and to share our views on how we think the statute has to be implemented. I think that open dialogue could make for a much more successful auction. And last, the auction should be conducted by June 30, 2014, which is an ambitious deadline, according to some, but given the needs of the marketplace, I think it is reasonable.
MCN: You tweeted a picture of yourself with Rep. Paul Ryan (now the Republican vice presidential candidate). What was that meeting about?
AP: I met with Congressman Ryan about a month ago to talk about ways that this agency, working collaboratively with Congress, could create a regulatory framework that could maximize incentives for job creation and economic growth, which is something very high on his agenda. I listened to his views on what Congress is hoping to do with respect to broader economic questions.
I found him to be very engaging, very bright and very well-versed in all of these issues, and extremely personable. I think those qualities will serve him well in whatever capacity he fi nds himself in in 2013.
MCN: You also tweeted pictures of yourself at the Google and Netflix offices.
AP: When I was out in Northern California about a month ago, I wanted to visit a broad cross-section of companies to get a sense of what drives innovation and investment in that industry and what the FCC could do to facilitate that. So I visited those and other companies, including Apple and Mozilla.
MCN: You are the first Indian-American commissioner. Is that something that you celebrate?
AP: People are free to talk about I if they want. It didn’t even occur to me until one of the commissioners mentioned it at a public meeting. But, yes, I guess I do draw pride in it. Not so much from the macro perspective but from the micro perspective.
My parents came to the U.S. with very little other than the ambition to work very hard and a medical-school education. Every day when I come to this job, and many of the jobs I have had in my career, I try to think about what can I do to make them proud and to be worthy of the sacrifi ce that they made. It is very gratifying.
MCN: Did your parents’ work ethic and sacrifice inform your political philosophy about getting government out of the way of entrepreneurship and initiative?
AP: Absolutely. Their approach to life is that when an opportunity presents itself, you should work as hard as you can to take advantage of it. They encouraged me from an early age, whether it was playing the violin at age 5, or entering the spelling bee in fourth grade*, or applying to colleges [Pai is a Harvard University graduate] and even beyond. They have already encouraged me every step of the way. I take the same approach as a general regulatory matter that if we remove some of the regulatory barriers to opportunity, risk-takers in the private sector will take advantage of it and deliver cutting-edge technologies and services.
(*Pai noted that he won the fourth-grade bee, though not the school-wide contest, which he went on to win in seventh grade.)
FIRST (SECOND, AND THIRD) PRINCIPLES
FCC commissioner Ajit Pai says the following three principles should guide agency policy:
1. The FCC should be as nimble as the industry it oversees.
2. The FCC should prioritize the removal of regulatory barriers to infrastructure investment.
3. The FCC should accelerate its efforts to allocate additional spectrum for mobile broadband.
— John Eggerton
Slice of Pai
FCC Commissioner Ajit Pai
Education: B.A., Harvard; J.D., University of Chicago
Previous job: Partner, Jenner & Block LLP
Term: May 14, 2012, to June 30, 2016
Twitter handle: @AjitPaiFCC
Favorite cable shows:Mad Men, The Wire, Curb Your Enthusiasm
Favorite broadcast show:Judge Judy
Favorite football team: Kansas City Chiefs
What’s on his iPhone: D.C.-based Thievery Corporation; Classical music (Pai played the violin as a child); 1970s classic Rock; podcasts from ESPN’s Tony Kornheiser and the publicradio series This American Life
Miscellaneous: Commissioner Pai is part of the Twitterati; he tweeted photos of his visits to Netflix and Twitt er while on a California high-tech tour last month. He also tweeted a photo he took with Rep. Paul Ryan (R-Wisc.) following a meeting last month, before Ryan became the GOP’s vice presidential candidate.
SOURCE:Multichannel News research
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.