FCC’s Pai Makes Waves
No Federal Communications Commission chair in living memory has changed so much, so fast, as Republican Ajit Pai. Despite being a critic of activist government, he has taken an activist role in reshaping the commission that oversees the nation’s telecom law, sweeping away regulatory regimens that took decades for commissioners of both parties to create, craft, and maintain. In recent news, he’s made his influence felt in net neutrality and TV broadcasting.
Why are you hearing so much about net neutrality? Imagine getting a letter from your local electric utility saying you’re allowed to run a heater under your current plan, but if you want to run an air conditioner, you’ll have to upgrade to a higher tier of service. Or imagine how you’d feel about your local water utility if you got a healthy spray from the showerhead but the bathtub faucet ran so slowly that it took an hour to fill the tub. Oh, and your home theater system just informed you that it refuses to play Led Zeppelin— would you like some Justin Bieber instead?
That’s a metaphorical equivalent of the nightmare scenario Pai’s FCC has just decreed by refusing to use its longstanding Title II authority to regulate internet service providers as public utilities. The ironically named Restoring Internet Freedom order eliminates rules against blocking internet-provided services, throttling them with reduced bandwidth, or prioritizing services that have paid the ISP for access.
Pai is passing the buck from the FCC to the Federal Trade Commission, which has a different but arguably not as effective regulatory toolbox. Unlike the FCC, it is not a telecom regulator—in fact, it is prohibited from regulating “common carriers” such as phone companies, and a recent federal court decision extended that prohibition to non-phone services such as broadband. So Pai is pinning our hopes for an open internet on a toothless tiger.
For a harbinger of the future, look no further than Portugal, where ISPs already offer rigorously tiered service. Many of the internet services you take for granted carry additional charges, including e-mail, social networking, messaging, music, and video. Want to use Gmail, Facebook, and Spotify? That’s five euros extra per month—each. Ka-ching, ka-ching, ka-ching. In the future, your internet service may look more like your cable TV service, with incessant rate hikes, tiers offering limited options, and pricey premium services. Twitter may become the new HBO.
ISPs claim they won’t use their newfound freedom—but they’re already doing it. Mobile broadband providers already exempt favored video services from data caps. The consumer is now like the proverbial frog in a saucepan. Turn up the heat slowly, and she’s not as quick to notice she’s being cooked.
In other FCC news, Pai’s Republican FCC majority has moved to increase concentration of ownership in TV broadcasting. Formerly, media cross-ownership rules prevented a single company from owning TV or radio stations and newspapers in the same metro area. The immediate effect is to green-light a $3.9 billion merger between the Sinclair Broadcast Group and Tribune Media. Critics note that Sinclair is already notorious for forcing its stations to air ideologically charged pro-
paganda. Now it will become a broadcasting colossus reaching 70 percent of U.S. TV households.
State attorneys general from Illinois, Maryland, Massachusetts, and Rhode Island are asking the FCC to ax the deal, decrying “increased consolidation that will decrease consumer choices and voices in the marketplace.” Thirteen Democratic senators have urged the FCC’s inspector general to investigate ties between Pai and Sinclair, noting that they met shortly before the cross-ownership rules were gutted. This, they say, “suggests a disturbing pattern of a three-way quid pro quo involving Sinclair, the Trump administration, and Pai.”
The FCC has also followed through on Pai’s vow to kill the “main studio rule,” which requires TV stations to maintain newscasting studios in communities where they are licensed to operate. This will save broadcasters (including Sinclair) a bundle. Pai’s FCC says the 77-year-old rule
“has outlived its usefulness in an era of mobile news gathering and multiple content delivery platforms.” But cutting newsgathering infrastructure may undercut local reporting in times of emergency when boots on the ground make a real difference.
In less discouraging news, Pai’s FCC has approved ATSC 3.0, the next-generation broadcast TV standard. It joins, but does not replace, the existing ATSC 1.0, which initiated the transition from analog to digital broadcasting and the dawn of the HDTV era. Among the attractions of ATSC 3.0 are Ultra HD resolution, objectoriented surround, mobile broadcasting, advanced emergency alerts, and cloud DVR recording from live broadcasts. Implementation will be voluntary; so will backward-compatibility with existing ATSC 1.0. And it will require some fancy footwork among TV stations including updating and sharing of broadcast facilities.
Some are uneasy about Pai’s approach to ATSC 3.0. The National Cable & Telecommunications Association, headed by former Republican FCC chair Michael Powell, has called for mandating backward-compatibility with ATSC 1.0 so viewers won’t suddenly find themselves cut off from antenna-delivered HDTV. Democratic commissioner Jessica Rosenworcel echoed the concern about backward-compatibility, noting that Pai’s plan offers no subsidy to consumers for new equipment to convert ATSC 3.0 to 1.0 for sets with existing HD tuners.
Some critics also see ATSC 3.0 as a boon to Sinclair, a big ATSC 3.0 booster. They include cable operators, who are wary of it becoming an issue in always-charged retransmission negotiations. However, the Consumer Technology Association’s Gary Shapiro asserts that the technology “delivers overwhelming consumer benefit and does not hurt any existing products,” asserting that “this should not be embroiled in politics and media ownership issues.”
Finally, Pai has apparently decided that the internet is something low-income people can live without. The FCC has voted to gut the Lifeline program, which enables people below 135 percent of the federal poverty line to use a $9.25 subsidy to buy internet or phone service.—MF