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The Legacy of the Pai FCC

As is normal with a change of administration, there are articles in the press discussing the likely legacy of the outgoing administration. Leading the pack in singing his own praises is former FCC Chairman Ajit Pai, who recently published this document listing a huge list of accomplishments of the FCC under his Chairmanship. Maybe it’s just me, but it feels unseemly for a public servant to publish an official self-praise document. The list of accomplishments is so long, I honestly read it twice to make sure Chairman Pai wasn’t taking credit for inventing 5G!

More disturbing to me are industry articles like this one that lists the primary achievements of the Pai FCC to include “the repeal of Title II regulation of the internet, rural broadband development, increased spectrum for 5G, decreasing waste in universal service funding, and better controlling robocalls.” I see some of those as failures and not accomplishments.

I find it unconscionable that the regulatory agency that is in charge of arguably the most important industry in the country would deregulate that industry. The ISP industry is largely controlled by a handful of near-monopolies. It’s easy to understand why the big ISPs don’t want to be regulated—every monopoly in every industry would love to escape regulation. It’s the government’s and the FCC’s role to protect the public against the worst abuses of monopolies. Lack of regulation means that carriers in the industry can no longer ask the FCC to settle disputes. It means that consumers have no place to seek redress from monopoly abuses. We’re within sight of $100 basic broadband, while the FCC has washed its hands of any oversight of the industry. Killing Title II regulation comes pretty close in my mind to fiddling while Rome burns.

We saw the results of broadband deregulation at the start of the pandemic. Had the FCC not deregulated broadband, then chairman Pai could have directed ISPs on how they must treat the public during the pandemic. Instead, the FCC had to beg ISPs to voluntarily sign on to the ‘Keep America Connected Pledge’, which only lasted for a few months and which some of the big ISPs seemingly violated before the ink dried. During this broadband crisis, the FCC stood by powerless due to its own decision to deregulate broadband. This is downright shameful and not praiseworthy.

Everywhere I look, this FCC is getting praise for tackling the digital divide, and admittedly the FCC did some good things. There were some good winners of the CAF II reverse auction that will help rural households—but that was offset by awarding some of that grant to Viasat. The FCC did some good by increasing the Lifeline subsidy for tribal areas. But on the downside, the FCC decided to award a seventh year of CAF II subsidy of $2.4 billion to the big telcos—with zero obligations to use the money to expand broadband. The FCC knows full well that the original CAF II was mostly a sham and yet took no action in the last four years to investigate the failed program. The Pai FCC closed out its term by largely botching the RDOF grants.

The area where the FCC did the most good for rural broadband was making more wireless spectrum available for rural broadband. This FCC missed a few chances early, but in the last few years, the FCC nailed the issue. The FCC might have made the best long-term impact everywhere with the rulings on 6 GHz spectrum. Spectrum decisions might be the biggest lasting legacy of this FCC.

But we’re never really going to know how this FCC did in narrowing the rural broadband gap because this FCC has no idea how many homes don’t have broadband. The lousy FCC mapping was already a big issue when Chairman Pai took over the FCC. There was a lot of gnashing of teeth about the issue under Chairman Pai, but in four years, nothing was done to fix the problem, and if anything, the maps have gotten worse. It might not be so disturbing if the bad mapping was nothing more than lousy data—but the bad data has been used to justify bad policy and, even worse, has been used to determine where federal grants should be awarded.

To add salt to the wound, the FCC issues a mandated report to Congress every year that reports on the state of broadband. The reports from the Pai FCC are so full of imaginary numbers that they are closer to fiction than fact. About the most the FCC under Chairman Pai can say is that the imaginary number of people without broadband grew smaller under his watch. On the last day as Chairman, the FCC released the latest report to Congress that concludes incorrectly that broadband is being deployed to Americans “on a reasonable and timely basis.” This recent report also concludes yet again that 25/3 Mbps is still a reasonable definition of broadband—when homes with that speed were unable to function during the pandemic.

In looking back, it’s clear that this FCC tilted as far as possible in favor of the big ISPs. There is nothing wrong with regulators who work to strengthen the industry they regulate. But regulators also have a mandate to protect the public from monopolies abuses. The FCC seems to have forgotten that half of its mandate. If there is any one event that captures the essence of this FCC, it was when they voted to allow Frontier to bill customers for an extra year for equipment that customers own. I didn’t see that accomplishment on Chairman Pai’s list.

By Doug Dawson, President at CCG Consulting

Dawson has worked in the telecom industry since 1978 and has both a consulting and operational background. He and CCG specialize in helping clients launch new broadband markets, develop new products, and finance new ventures.

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