New FCC chair has done some good, but transition's not as easy as Pai
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New FCC Chairman Ajit Pai has taken it on the chin recently, which should be expected considering that many of his views run contrary to the previous chairman's.

But much of the criticism is overwrought.

Some aspects of his first few weeks were positive. Increasing transparency in the agency's rule-making processes is long overdue. New ideas on closing the digital divide should be considered, hopefully with an eye toward cost-effectiveness.

On the more negative side of the ledger, however, the process by which the chairman took certain actions as well as retracting certain reports were not in keeping with promises to be more inclusive than his predecessor.

Pai's actions to increase transparency are unambiguously good. Taking Commissioner Michael O'Rielly's advice and releasing draft proposals and orders to the public prior to a FCC vote while tightening "editorial privileges" granted to bureaus after the vote is a win for good governance. It ends a decades-old process that made public scrutiny of rulemaking difficult.

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Granting editorial privileges is a bizarre practice dating to the 1970s that includes voting on notices and orders before publicly releasing the text, and allowing changes — sometimes substantive — after the vote. Hopefully this more open approach will become standard practice.

 

Pai has received intense criticism for his actions on Lifeline, including in The New York Times and The Washington Post. The crux of the criticism focuses on his decision to change the application status of nine companies that wanted to offer Lifeline broadband service back to "pending" after having been approved in December 2016 and January 2017.

But that decision is a red herring. As many have pointed out, those nine companies are in addition the hundreds of companies that already provide Lifeline service, and the added delay in their approval has little, if any, effect on access to subsidies.

More importantly, the issue of the nine companies distracts from the real question: Do existing programs address the digital divide? The evidence to date suggests that they do not, at least not in any cost-effective way.

In 2012, the FCC ran an excellent pilot program testing how subsidies and digital learning programs might encourage non-adopters to sign up. They result was surprising: They did not attract low-income nonadopters. Subscribership was, on average, about 10 percent of what participating companies had expected.

The experiment demonstrated how little we know about getting the last group of low-income people online. Instead of pausing to understand why the subsidized plans attracted so little interest, the FCC ignored the results and plowed ahead with its Lifeline subsidy program.

In short, the problem with Lifeline is not that it needs to give subsidies to more companies. It needs additional experiments, real evaluation and more thought about how we might actually close the adoption gap.

Pai recently outlined his plans for addressing the digital divide. The next Open Commission meeting agenda includes plans to move ahead on the Mobility Fund Phase 2, which focuses on adding 4G coverage where it does not currently exist, and more money for rural broadband buildout.

Hopefully those plans will include experimenting with how to spend the money in the most cost-effective manner, evaluating whether the programs work and analyses — especially when considering an additional $2 billion on rural subsidies — that takes to heart his comment that "every dollar that is spent on subsidizing somebody who doesn't need the help by definition does not go to someone who does."

All that said, however, the process by which he made some decisions could have been better. Pai frequently criticized Wheeler for not consulting the minority and acting unilaterally. So it was regrettable, then, that on Feb. 3, he unilaterally revoked a number of orders, causing Commissioner Mignon Clyburn to make the same critique about Pai that he previously made about Wheeler.

Pai should strive to live up to the standards of collegiality and engagement he expressed in his initial confirmation hearing. Few expect Pai, O'Rielly and Clyburn to agree on all, or even most, issues. But they are all well-meaning people with deep knowledge of the issues and a shared desire to achieve certain goals like ensuring continued investment in world-class networks and closing the digital divide.

Another concerning action was his retraction of two documents: a paper titled "Improving the Nation’s Broadband Infrastructure" by the former chief of the Office of Strategic Planning and Polices Bureau and an "E-Rate Modernization Progress Report" by the Wireless Bureau.

Heads of government agencies should not retract papers and reports with which they disagree. Instead, they should explain why the reports are deficient.

For example, in the E-Rate report, Pai might have asked for a justification for the "short-term goal" of 100 kilobits per second/student connectivity. What research demonstrates that this is a meaningful goal? Are the benefits of that increased speed above what the schools had already worth the multiple billions of dollars spent? Why is recipients' confidence in their ability to receive future subsidies an indicator of success? (Seriously. Check out page 5.) Addressing the substance of a paper is a better strategy than trying to remove it from the discussion.

Overall, Pai is off to a good start. He has moved to increase transparency of the FCC's decision-making process and has suggested new ideas for addressing the digital divide. His unilateral actions, on the other hand, may generate better policy outcomes, but were not good policy process.

Hopefully, in the future, Chairman Pai will better engage other commissioners. Doing so would help promote good telecom policy and ensure the success of his long-term agenda.

Scott Wallsten is president and senior fellow at the Technology Policy Institutea think tank that focuses on the economics of innovation, technological change and related regulation in the U.S. and around the world. 


The views of contributors are their own and not the views of The Hill.