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Pai Offers Up Evidence of Title II Fallout

FCC commissioner Ajit Pai says he has evidence that, as he predicted, the FCC's Title II decision is already having an adverse impact on small broadband operators, evidence he used to call for the FCC to stay the rules, which are scheduled to go into effect June 12, according to chairman Tom Wheeler.

Pai pointed to the sworn testimony of small broadband operators--from requests to the FCC to stay the rules--of deployment delays and other cutbacks in the fact of a "regulatory onslaught." He had said that would happen in strongly dissenting from the decision.

That "onslaught" reference is to the Feb. 26 party-line vote to reclassify ISPs as telecoms under Title II common carrier regulations.

Pai cited a half dozen examples, provided under penalty of perjury, he said, of Title II-prompted cutbacks at small ISPs.

They included KWISP Internet in northern Illinois, which said it would delay network upgrades that would have boosted services from 3 Mbps to 20 Mbps, which is within shouting distance of the FCC's recently established advanced telecommunications benchmark of 25 Mbps.

Another, Wisper Inc., which serves 8,000 customers, had cut investment due to anticipated compliance costs. "[P]rior to the FCC’s decision," the company said, according to Pai, "Wisper was planning to triple the number of new base stations it would deploy each month in order to provide broadband to customers in new areas. But as a result of the Order, Wisper has put those plans on hold."

Rural Virginia ISP SCS Broadband (800 customers) said it had stopped building out to new rural areas and won't resume until it can figure out whether the additional legal fees associated with the new rules warrant that investment. And, again, under penalty of perjury, said that investors had told it that “projects that were viable investments under the regime that existed before the Order will no longer provide the necessary returns to justify the investment.”

"These examples shouldn’t surprise anyone," said Pai in a release detailing those and other sworn statements. "After all, the President’s own Small Business Administration warned the FCC last year that its proposed rules would unduly burden small businesses. And yet the FCC decided to treat each and every small, scrappy broadband provider as if it were an anticompetitive industrial giant.

"The FCC still has a chance to heed these calls and stay the effect of President Obama’s plan to regulate the Internet. But I doubt this will happen," he said. "That’s because moving forward with this plan isn’t about logic, the law, or marketplace facts. It’s about fulfilling a political imperative."

Pai has argued that Administration pressure was at least partly behind Wheeler's decision to reclassify under Title II, while the chairman has said Title II was always on the table, and that he was moving toward that option before the President weighed in asking the FCC to do so.

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.