Five Questions: Federal Communications Commission Chairman Ajit Pai

In January, President Donald Trump selected Ajit Pai to serve as chairman of the Federal Communications Commission. Two months later, Trump nominated Pai, 44, to another five-year term in that position. In an effort to better understand the challenges facing rural broadband internet service providers, Pai has been traveling west from Milwaukee, Wis., toward Wyoming for the past week, making stops in rural towns across America. On Friday afternoon, he made a stop at Black Hills State University for a roundtable discussion with area telecommunications stakeholders. U.S.

Sen. John Thune, R-S.D., chairman of the Senate Committee on Commerce, Science, and Transportation, was also in attendance. Following the discussion, the Journal sat down with Pai to discuss the challenges facing broadband internet service providers in rural areas, what a Pai-led FCC will look like and what his views are on the issue of net neutrality.

Many rural areas within South Dakota have slow or little broadband internet access. What plans do you have in place to help extend broadband access to rural areas as its importance increases in our digital world?

I think the key is making sure that we have regulatory framework in place that allows broadband providers to build out in some of these areas that are difficult to serve. One of the things I’ve found during our current trip from Milwaukee all the way to here in Rapid City is that it’s exceptionally difficult in some cases to build a business case for deployment (building more infrastructure). There might be some challenges with terrain or you might see sparsely populated counties where you might not get the return on investment when you lay fiber, or the building season might be short. So from a FCC perspective, I see our role as making sure that, No.

1, we tailor our rules to ensure that these companies are able to build out broadband, and No.

2, with respect to the federal subsidy programs we oversee, making sure that those dollars flow to unserved parts of the country and that they’re administered in a fiscally responsible way. I think if we get those two things right then companies in South Dakota and other rural states will be able to build broadband to benefit consumers.

Only 45 percent of American households with household incomes under $30,000 have home broadband access. Are rural broadband subsidy programs working?

We’re starting the process of improving them and so in the first full month that I became chairman, we got across the finish line in a bipartisan way a $4.5 billion plan over the next decade to make sure that 4G LTE is built out in all parts of unserved America. Similarly, we approved, again on a bipartisan basis, a $2 billion plan over the next decade to get fixed broadband to unserved parts of America. These are very difficult problems to solve, obviously, but I’m hopeful that we’re moving in the right direction. Going forward, we want to also make some regulatory tweaks to ensure that rural consumers have more options. For instance, stand-alone broadband is something that I’m very interested in. A lot of consumers these days, especially younger people, might prefer to have just an internet connection as opposed to buying a bundle package. For a lot of these rural carriers, because of the way our universal service subsidy programs are structured, it’s very difficult if not impossible for them to offer that.

So that’s why a few years ago I proposed a very simple one page plan for allowing them to do that, and I’m hopeful that now in 2017 we can move on that kind of proposal as well.

Clarifying the problem with the universal service subsidy program:

(Rural broadband companies) would get these subsidies if they offered voice service and so they would have to pair voice along with broadband. So some of the companies said ‘Well, we can’t offer stand-alone broadband because if we do, we will lose those subsidies’ and so that’s why, going forward, we wanted to make sure that they were able to take advantage of those subsidies while providing a stand-alone broadband product.

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Can you speak a little bit about the FCC’s efforts to increase broadband service to rural areas as it relates to closing the digital divide between rural and urban areas?

This to me is the No.

1 issue that we need to be focused on. In my very first speech in my first full day in office, I spoke to the FCC staff, and I told them that I think the FCC and government generally needs to be focused on closing the digital divide. I think increasingly as the internet becomes more important in all aspects of daily life, it seems to follow that if you don’t have internet access then you won’t be able to improve your life, get high-quality education and health care and building a new business and the like. Similarly, America will lose out because we won’t be able to leverage some of the human capital that I think does exist in rural America. I’m convinced that somewhere out there in small towns is somebody who, if given the chance, with a broadband connection, could teach himself or herself ways to program in a very innovative fashion. So it is incredibly important for us to essentially embrace the spirit of a field of dreams, ‘If you build it, they will come.’ If you build these broadband connections to rural America, I’m convinced that thousands, if not millions, of younger rural Americans could take advantage of it, come to the table and compete in events like the International Collegiate Programming Contest (held in Rapid City on May 24) on par with anybody around the world.

There’s been a pretty consistent characterization of you as an enemy of net neutrality. What’s your reaction to this label? Is it wrong?

I would hope that people of goodwill would focus on the facts, and the facts are that everyone supports a free and open internet. That’s the internet we’ve had from the commercialization of the online world in the 1990s. It’s the internet we had in 2015 prior to these regulations being adopted, and it’s the internet we will have going forward, regardless of what the regulatory framework is. I think the only question here is what rules can we adopt that preserve those core values of an open internet and maximize the incentive for companies, big and small, rural and urban, to invest in infrastructure. People are looking at the internet today and wondering ‘Well how is it going to ramp up to address some of the high bandwidth applications of the future: streaming video and gaming and high-definition applications for things like health care, remote surgery and the like?’ All of those exciting applications require a lot of bandwidth. So the networks of today are going to have to evolve and provide even more bandwidth in the future. This requires massive amounts of investment and so we need to make sure our rules preserve the incentive that companies will have to build those networks.

This risk capital doesn’t have to be spent on broadband, and it doesn’t have to be spent in the United States, and I think if we want to make the American internet economy the envy of the world going forward, we need to make sure that our rules reflect that. That’s part of the conversation we’re involved in now. No one is talking about destroying the open internet. No one is talking about leaving consumers to the mercy of any competitive monopolist. All we’re talking about is how to best preserve that core value of the open internet and preserve the incentive to invest in the networks going forward.

Do you see the FCC as having a role in trying to prevent misinformation, propaganda or subversive information on the internet?

It has long been a bedrock principle at the FCC that we don’t regulate content through whatever medium it goes over, with some very limited exceptions. For instance, we don’t tell the broadcast companies what kinds of news they should cover or shouldn’t cover. We don’t tell wireless companies what types of information they should be allowed to distribute over their networks or not. This is one of the core principles. It is of course inspired by the basic First Amendment freedoms that we all cherish.

I understand this is an issue that’s of great interest to a lot of Americans, and it’s a political debate in Congress, but from a legal perspective at least, I don’t see any clear cut authority for the FCC to get involved.

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