FCC Chairman Ajit Pai on Why He's Rejecting Net Neutrality Rules
"We were not living in a digital dystopia in the years leading up to 2015."
Federal Communications Commission (FCC) Chairman Ajit Pai announced plans today to roll back net neutrality rules put in place by the Obama administration in 2015.
The FCC currently regulates Internet service providers (ISPs) under Title II regulations that essentially treat the internet as a public utility similar to the old phone monopoly. Proponents of net neutrality and the invocation of Title II regulations say that such oversight is necessary to ensure that the Internet remains "open" and ISPs don't block sites or degrade offerings by rivals. Long a critic of Title II regulations, which were invoked after the FCC lost two court battles to regulate the Internet, Pai describes them as "a panoply of heavy-handed economic regulations that were developed in the Great Depression to handle Ma Bell."
Scrapping these rules, Pai told Reason's Nick Gillespie, won't harm consumers or the public interest because there was no reason for them in the first place. The rationales were mere "phantoms that were conjured up by people who wanted the FCC for political reasons to overregulate the internet," Pai told Gillespie. "We were not living in a digital dystopia in the years leading up to 2015."
If left in place, however, the Title II rules could harm the commercial internet, which Pai described as "one of the most incredible free market innovations in history."
"Companies like Google and Facebook and Netflix became household names precisely because we didn't have the government micromanaging how the internet would operate," said Pai, who noted that the Clinton-era decision not to regulate the Internet like a phone utility or a broadcast network was one of the most important factors in the rise of our new economy.
Pai also pushed back against claims that he's a right-wing radical who's "fucking things up."
"[I ascribe to] the very radical, right-wing position that the Clinton administration basically got it right when it came to digital infrastructure."
During the interview, Pai also shared his views on topics including privacy, Donald Trump, obscenity, universal service, and more.
Edited by Mark McDaniel. Cameras by McDaniel and Meredith Bragg. Music by Revolution Void.
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This is a rush transcript—check all quotes against the audio for accuracy.
Nick Gillespie: Hi I'm Nick Gillespie with Reason and today we are talking with Ajit Pai. He's the chairman of the Federal Communications Commission, the FCC, which oversees the licensing of radio and television stations, creates ownership roles for certain types of media companies, polices broadcast radio and television for indecency, and over the past few years has tried to enforce controversial rules that will maintain a free and open internet, sometimes called net neutrality. Ajit, thanks for talking to us.
Ajit Pai: Nick, great to be with you again.
Nick Gillespie: You are repealing Title II rules, explain what that will do and what you hope to accomplish with that.
Ajit Pai: Well, as you pointed out, Title II involves the panoply of heavy-handed economic regulations that were developed in the Great Depression to handle Ma Bell, the telephone monopoly of the 1930s. My previous colleagues imposed those rules on the internet, one of the most dynamic systems we've ever known. Earlier I proposed to my fellow commissioners at the FCC to repeal those Title II regulations. Going forward, my hope is that in a more free market, light touch environment, we can figure out what the right regulatory framework is to preserve those core protections of a free and open internet that have existed prior to 2015 when on a party-line vote, the FCC adopted these net neutrality regulations.
Nick Gillespie: To get into it a little bit, there was a free and open internet in 2015, there's kind of one now too or nothing much has changed. What was the pressing cause that people said, you know, "The internet is being shut down, it's being taken over. It's being warped in ways for particular business or political interest." What was the proximate cause for pushing for this new type of regulation, which was much bigger and much broader than anything before?
Ajit Pai: There was none. We were not living in a digital dystopia in the years leading up to 2015. By contrast, actually, the commercialization of the internet in the 1990s up to 2015 represented I think the … one of the most incredible free market innovations in history. With light touch regulation, broadband providers spent 1.5 trillion dollars on infrastructure. Companies like Google and Facebook and Netflix became household names precisely because we didn't have the government micromanaging how the internet would operate. That Clinton era framework is something I think served us well and going forward I hope it continues to serve us well.
Nick Gillespie: So, what is something … Pulling back Title II, what is something that an ISP or an internet company can do that they wouldn't be able to do as easily under Title II.
Ajit Pai: Well, nothing in my view because if you look at the record that the FCC had on the books in 2015, internet service providers were not willy nilly blocking traffic and throttling traffic. To the contrary, these were all phantoms that were conjured up by people who wanted the FCC for political reasons to over-regulate the internet. Going forward, if we go back to the rules as they were previously, we are not going to see this parade of horribles that we are sure to hear about in the next coming weeks.
Nick Gillespie: With Title II or under the Open Internet Order, it was also partly, it was going to be done on a case by case basis, right? As opposed to saying here is exactly what you have to comply with as an ISP or as an internet entity. Which throws in … For me when I was reading this I was kind of worried about that because isn't the idea of a rule of law is that you set standard playing rules for everybody and then let people innovate? As opposed to saying, I mean it seems to me that it was almost setting something up with Uber it's like, oh well Uber, I'm a city I don't like what you're doing to my taxi cab company so I'm going to go hammer you, even though they're technically breaking any laws.
Ajit Pai: This is one of those pernicious features from an administrative perspective of the Title II order. One was the preemptive declaration that every single internet service provider from the big ones down to Main Street Broadband, which is an ISP in Cannon Falls, Minnesota with four customers. All of you or any competitive monopoles per se we're going to regulate you as such. The other piece of it was, as you put it, that general conduct standard where the agency said, "Well in case we didn't overregulate you enough, on a case by case basis, we're going to think about any particular business practice that you might seen inauspicious to us and we're going to declare it, whether or not it's going to be permitted." I think what you saw was the agency then sticking its toes into the water with respect to free data, in which we prohibit cell phone companies from offering consumers data for free, exempt from data caps.
Nick Gillespie: Well and let's talk about that because this was always the example. When people talk about net neutrality or an open internet, you conjure up the idea of I have Time Warner, which is now Spectrum I guess, and I want to go to reason.com on Spectrum but it's blocked or I can't get there or it won't load and it's because the people there don't like Reason, they don't like our politics or maybe our competitors have bought some kind of thing to kind of block us. That's, that's what people worry about. That kind of stuff is not happening.
Ajit Pai: It does not happen now.
Nick Gillespie: Yeah. Then what is the, what are the other fears of a blocked internet.
Ajit Pai: Well I think some of what the advocates of these Title II regulations are interested in is prohibiting any company, any internet service provider from offering consumers data in a way that they think is somehow anti competitive.
Nick Gillespie: This comes down to things like T-Mobile, Verizon-
Ajit Pai: Exactly.
Nick Gillespie: has a version,k these zero rated plans where if you're listening on your phone through your service, say it's T-Mobile and you can listen to whatever you want on Spotify it doesn't count against your monthly data cap.
Ajit Pai: Right.
Nick Gillespie: And that that's a bad thing.
Ajit Pai: Exactly. If you look at the hysteria surrounding T-Mobile's binge-on and music freedom offerings, I mean this is simply allowing consumers to consume all kinds of video from a variety of providers or music from a variety of providers exempt from those data limits. Anyone who meets T-Mobile's technical specifications can be a part of the program. And yet even that pro-competitive, pro-consumer offering was seen as a great violation of net neutrality and I think it just betrays the fact that these are people who want regulation for the sake of regulation not to benefit consumers.
Nick Gillespie: Can you dilate a little bit on that? Net neutrality is only, as a concept is only what? About 10 to 15 years old. It appeared in an article in I think 2005.
Ajit Pai: Right.
Nick Gillespie: A law review article. But what do people say when you … You're saying look, T-Mobile is going to let you listen to as much music as you want from any service that signs up for that and if your preferred service isn't on that then the data you save by listening to Spotify or Pandora or something you can use that data for your own service that you want. Where do they advance arguments that that is somehow harming the public interest?
Ajit Pai: They claim that it is harming the public interest by disadvantaging music providers or video providers who can't be a part of that system.
Nick Gillespie: Yeah.
Ajit Pai: But that simply hasn't proven to be the case. I think it drives more from an impulse to want to regulate the internet at all costs and deem every single internet service provider per se evil and anti-competitive and that's just not the way they are.l
Nick Gillespie: And it's almost as if with pushing Title II on people, you're trying to get back to the idea that, of course everybody hated the phone company, Lilly Tomlin the comedian built her career by being a nasty telephone operator, a customer service rep, who was completely unresponsive and her tagline was, "We're from the phone company and we don't have to anything." She would give people raspberries over the phone but you're-
Ajit Pai: The funny thing about that is because it's precisely because the phone company was a slow moving monopolist. That's exactly the point we're trying to make. These rules, Title II rules were designed to regulate Ma Bell, and the promise with Ma Bell, the deal with the government was, we'll give you a monopoly as long as you give universal service to the country. As a result, for decades, we didn't see innovation in the network we didn't see innovation in phones and it's when you have a competitive marketplace and you let go of that impulse to regulate everything preemptively, that you finally get to see more of a competitive environment.
Nick Gillespie: Yeah, this is also something that I suspect a lot of people kind of don't understand or take for granted of, you know, the phone that you were using in 1950 and 1980 was basically the same.
Ajit Pai: Right.
Nick Gillespie: We're not even using the same phones we were using 10 years ago. I mean, it's fully different technology, wide range of services and what not.
Ajit Pai: Oh, and it's incredible when you think about it. I mean, 20 years ago we were talking about AOL sending CD-ROMs in the mail, 56K modems. I mean to go from that to a discussion about how do we incentivize the deployment of gigabit fiber in inner city Detroit I mean, this is a … We've come leaps and bounds and it hasn't been because of preemptive regulation from the 1930s, it was because of that entrepreneurial spirit.
Nick Gillespie: Well, you're appointment and certainly the Title II announcement makes it only more controversial. You've already been very controversial in an administration that has had a lot of controversy. Gizmodo recently ran an article titled, "Everything Ajit Pai Has Fucked Up in the Last Three Months." That was kind of on the soft side of the headlines. Critics seem to be especially worried that you're overly friendly or you will be to business interests. What is your general philosophy? Because you're not an anarchist, you're not going in to blow up the FCC. What's your general philosophy about the role the FCC should be playing in the 21st century?
Ajit Pai: Well I think the very radical, right wing position that the Clinton administration basically got it right when it came to digital infrastructure, that you want to take a light touch approach and look regulators can take one of two basic philosophies. You can preemptively regulate and say, "We anticipate there are going to be major market failures everywhere so why even bother taking a look at what the marketplace facts are, let's just regulate it as if it's all going to be anti competitive monopoly. The other perspective is let things develop organically and if you see any competitive conduct from a company or companies then you take targeted action to address that problem. I am firmly in the second camp because there are serious and unintended consequences, some consequences are intended I guess, to preemptive regulation. We're seeing some of that now with investment decreasing, with innovation in terms of business plans that are decreasing. Mother may I is not the right way you want to incentivize digital companies in this economy.
Nick Gillespie: You have made recent actions that would allow ISPs or there have been recent actions to allow ISPs to collect dues and sell data from users the same way that companies such as Google and Facebook already do and have been doing for a while. You support that move, a lot of privacy advocates don't. What are they missing in your analysis?
Ajit Pai: My position is pretty simple. Whenever consumers go online, they have a uniform expectation of privacy. That means that they expect whatever company is handling their sensitive information whether it's a so called Edge provider or a content provider or their internet service provider to handle that information with care. Prior to 2015, the federal trade commission applied a uniform system of regulations to anyone in the internet economy to handle that information. With Title II the FCC stripped the FTC of jurisdiction over privacy and all I'm simply saying is we need to return to that consistent and comprehensive framework. Consumers deserve to be protected regardless of the company that holds their information.
Nick Gillespie: And the idea is also that one assumes that if the ISP is selling the data the benefits will come back to the users right, on some level.
Ajit Pai: That's one of the ways the internet has developed is that for non sensitive information, consumers generally have understood that there is more of an opt out approach in exchange for the sharing of that information, they get lower prices or better services and the like and that's simply how the internet was worked in the last couple of years.
Nick Gillespie: With the abandonment of Tittle II then the FCC has jurisdiction to regulate these types of practices?
Ajit Pai: That's correct if we repeal Title II then we would take away what's called the common courier classification for internet service providers then the federal trade commission ultimately we anticipate would be able to regulate-
Nick Gillespie: You have talked about using the FTC rather than the FCC to adjudicate various other claims in terms of concentration of ISP ownership and things like that. Why are you looking … It's an odd thing for a newly minted chairman of an agency to say, "You know what, I want some other agency to do this work for me." What's going on there?
Ajit Pai: What's going on is simply that we have a competition authority on the beat, we have a consumer protection authority with expertise and that is a federal trade commission and they have long jurisdiction over both the antitrust side of the equation and the consumer protection in terms of the privacy side of the equation. By stripping them of that authority two years ago the FCC didn't automatically grant itself that expertise or that long standing set of precedence, we simply started making it up on our own. I think you saw the results for themselves that the privacy regulations of the FCC conjured up. Number on completely asymmetric and number two ignore the way the internet works in terms of encrypted traffic and the like. I would rather return that to the agency with expertise in these issue and that's I think better for consumers too.
Nick Gillespie: Do you worry, I mentioned I was part of Time Warner, it's now Spectrum. There have been a number of major mergers among ISPs. At what point, how do you adjudicate that to say, "You know what, there's too much market concentration here." Or is it that it's not the amount of … It's not the concentration of a particular ISP but rather … What are the other factors that would go into to say this is a competitive marketplace even if there are only two or three companies there?
Ajit Pai: Well there are two different approaches that I take so first with respect with any transaction that's presented to us, we apply the FCC, the public interest standard and so we have to determine would the consummation of this transaction be good for consumers and for competition. If it is then we approve it, if it's not then we see, okay there are conditions that are narrowly tailored that could help us make it in the public interest. If there aren't then we simply disapprove it. The second major piece in the puzzle and something I've been very active on and something which notably the press has ignored has been getting more competition into the market place. Revising and removing regulatory barriers to infrastructure investment. Ultimately, the best way to solve the problem surrounding net neutrality or any of these other consumer protection issues is to get more companies using a variety of technologies to deploy infrastructure everywhere in The United States.
From my perspective I could care less whether it's a cable company, a telephone company, a wireless company, a satellite or an upstart, Google and Facebook and what not who are experimenting. I want them all to compete.
Nick Gillespie: Talk about some … When you talk about it's regulatory barriers but it's also physical ones. Because you're talking about the ability to actually string wires or cable or transmission towers. Get into the weeds a little bit. I think one of the things that is difficult about a lot of digital policies that we just take it for granted and it's magic, it just we flip the switch it turns on but it's built on real stuff.
Ajit Pai: Building a broadband network is really hard and I've seen it for myself when you're trenching fiber and you have to dig up a road or when you're trying to attach equipment to utility poles or when you're trying to sight a gateway earth station for a satellite broadband company. It's really hard work. It's expensive, it's difficult to find people to do it and in some cases there are significant regulatory barriers. For example one of the biggest cost elements to building a broadband network is top get access to utility poles in a timely way and in a cheap way. I was visiting with Rocket Fiber for instance. A start up ISP in Detroit which had issues with The City of Detroit getting cost effective access and timely access to the utility poles. In some cases the city was asking for rates that were simply prohibitive and if you can't afford those pole attachments as they're called, you're never going to build the network and so that's one of the things we've identified actively.
It's set up a broadband deployment advisory committee which we met just last week for the first time to identify things like that. Pole attachment problems, problems getting access to a conduit that lays in they ground and the like. Those are the nitty gritty things that they FCC has the power to do and would ultimately benefit consumers in terms of competitive choice. Unfortunately more sexy, high profile issues like Title II seem to occupy all the oxygen.
Nick Gillespie: Well, let's talk about sexy issues in decency fines and what not. The FCC is in charge of … I say this as somebody, everything I watch either comes over a computer screen or it's cable and then pops up on a TV. I don't know the last time I actually watched an over the air broadcast. But the FCC levies fines on indecency, when are we going to stop doing that? Isn't that just insane at this point to even have a category of law which is kind of getting where they say, "This is indecent because it was broadcast over the air on a TV that maybe nobody is watching anymore but we're going to make sure that some station pays hundreds of thousands of dollars potentially for airing a fleeting obsanity.
Ajit Pai: That's ultimately a decision that congress has to make with the guidance of the supreme court. So long as section 14-64 which is the law on the books that requires us to prohibit obscene, indecent and profane content over the airwaves so long as that remains-
Nick Gillespie: In other words HBO will never be able to be broadcast.
Ajit Pai: Yeah.
Nick Gillespie: It will always be cable only?
Ajit Pai: Game Of Thrones I suspect will not be seen in reruns on a broadcast network anytime soon. We were duty bound at the FCC to administer at best what we can within the confines of the constitutional decisions of The Supreme Court. Obviously I'm just a couple months on the job so we're trying to figure out the right way forward but this is one of the consumer offer-
Nick Gillespie: Is that something that you can minimize or can you make it … Can you de-prioritize it or say now we're going after all the smut peddlers on ABC.
Ajit Pai: The practical matter, the agency has limited resources so we can't go after every single case and every single area under our jurisdiction but if there's a targeted case that-
Nick Gillespie: Would you have kept pushing on the Janet Jackson nipple gate case?
Ajit Pai: That's a good question. It's been a long time. That case happened before I got there and so I think in some cases that litigation has gone for many many years and-
Nick Gillespie: Yeah and the Bono and what the these are like … The government isn't in enough debt so we could always wait for these guys to keep. In congressional testimony in March, you were asked whether you agreed with Donald Trump that the press is the enemy of the people. You replied in part, "I believe that every American enjoys the first amendment protections guaranteed by the constitution." That response angered activists. Why do you think it angered them?
Ajit Pai: Well I think one reason it angered them is because they are going to oppose anything I say or do. If I say that the sky is blue they will complain that Ajit Pai rejects the diversity if colors in the sky and denies the existence of clouds. Another piece of it is I think is that there is a very strong political debate in this country about the role of the news media. I understand that. There's a debate about fake news in particular. I don't want to get into that political debate because that's frankly above my pay grade as an agency head. What I do believe in however is that under the first amendment journalists do an important job in informing your local communities about news and other issuse of the day and I've spoken consistently about the importance of First Amendment freedoms and the freedom of the press.
Nick Gillespie: I'm getting the sense that you don't believe in the First Amendment whatsoever. That's just what I'm hearing.
Ajit Pai: The other curious thing about it is that the same people who are criticizing me for that have nary a word to say about the lack of free speech on college campuses, the censoring of freedom of the speech over the internet in foreign countries. I think you have to be consistent when it comes to-
Nick Gillespie: Actually what I particularly liked about your answer and I say this a journalist, that you said every American enjoys First Amendment protections because the minute that we only start giving them to so called journalists then we're … The press is being licensed by the government so-
Ajit Pai: Absolutely and then it becomes animal farming. All journalists are equal but some are more equal than others and then the government shouldn't be in the business of figuring out who that is.
Nick Gillespie: Do you worry though at all about the president's statements? Back when he was running he talked about loosening up libel law so he could sue the New York Times, he's made a lot of statements along that line to Jeff Bezos who's both the owner of Amazon but the owner of The Washington Post as well, does that talk frighten you at all?
Ajit Pai: Well I think that the president has made a number of statements that reflect what he considers to be his view of the news media and how they have covered him. Obviously the news media has been critical of him, he's been critical of them, that's the classic First Amendment debate. You can introduce an idea and if people don't like it they can say they don't and a number of people have.
Nick Gillespie: Do you interact much with president Trump and what's the nature of that kind of communication?
Ajit Pai: I've met him on several times, I interviewed with him when he was president elect in January-
Nick Gillespie: Did you go up to Trump Tower?
Ajit Pai: I did yes.
Nick Gillespie: Did you get the taco bowl?
Ajit Pai: I did not get the taco bowl but do you remember walking into … On the way into his office you walk in this hallway, all of a sudden had a feeling, I thought wow I've been here before I've seen it. I realized that is the hallway where the apprentice contestants go after they've been fired.
Nick Gillespie: Oh really?
Ajit Pai: Unfortunately it ended up a little better for me-
Nick Gillespie: given a three minute summation of why they got fired.
Ajit Pai: Exactly but the second time I met him was in the White House.
Nick Gillespie: Has he articulated any kind of broad vision for what he wants you to be doing at the FCC?
Ajit Pai: Generally speaking he said keep doing what you're doing in terms of prioritizing infrastructure investment and making sure that we get this part of the economy moving again, it's one sixth of the national economy and we think that … I'm glad that he agrees that rules of the road that are light touched that incentivize investment and innovation are ultimately better for everybody in this country.
Nick Gillespie: Obviously one of the things from … He's a man of many moods and of many contradictions but he's generally pro deregulation and like you're saying light touch, yeah so is a touch of cronyism in him or playing with local and say governments to get certain types of inducements which is something that the cable industry certainly historically has done. Do you feel like there is a way forward that will minimize the historical baggage of cable operators being so indebted to local governments for monopoly contracts? Can we get out of that finally into a world of internet connectivity and I guess all media connectivity that is finally a true … More of an open plain field?
Ajit Pai: Absolutely and this is one of the things I prioritize during my time at the commission just making sure that we have objective upfront rules of the road that prevent anybody from gaming the system. Arbitrage I think is just poison to those of us who believe firmly in the power of a free market. Several years ago for instance I led the charge against one Fortune 5OO company gaming our small business program to get 3.3 billion dollars and taxpayer credits-
Nick Gillespie: What company was that?
Ajit Pai: It was Dish corporation that was participating in the spectrum auction using small business as essentially Shell's bid in the auction because Shell has got bidding credits. Similarly I've consistently said that I want there to be state-wide franchising for internet service providers and video operators and the likes that companies don't have to go jurisdiction by jurisdiction and essentially do a lot of goodies as the price of getting a monopoly license to serve that particular area. That's the worst of all worlds for consumers because then you don't get competitive choice and you are paying out in terms of greater taxes
Nick Gillespie: What about one of the things that you've been criticized for is saying that the FCC doesn't have the right to cap the rates that prisons charge prisoners. Talk about that a little bit. Because from the outside on some level you're in prison and you're getting ripped off by the phone company. Where were you? Where is your thinking on all of that?
Ajit Pai: This is one of the most misunderstood issues. There are two possibilities when it comes to a phone call made from a prisoner, one is that it is a phone call that is entirely within one state and one is the phone call that crosses state boundaries interstate. With respect to intrastate phone calls, the law of the communication act is crystal clear the FCC doesn't have the jurisdiction. In any of the areas we regulate we simply don't have intrastate jurisdiction over rates pretty clear so there it's just a legal dispute. With respect to interstate rates, I put a plan on the table several years ago that would have lowered rates dramatically in prisons and jails across this country and was based on the evidence that was in the record.
Unfortunately my colleagues disagreed with me and what's notable is the DC circuit, the court of appeals here in Washington stayed my colleague's decision four separate times. That tells you something. When the court of appeals here is saying, "We don't think the evidence in the record is sufficient to justify the rates that the FCC ultimately picked that seems to be a signal that we should have done something different and that's something different I believe was my proposal. If we'd adopted it four years ago, these rates would have been lowered for prisoners everywhere in the country right now.
Nick Gillespie: Do you think prisoners should pay rates based on the severity of their crimes?
Ajit Pai: Absolutely not.
Nick Gillespie: I'm joking.
Ajit Pai: Consumer is consumer and people who are incarcerated deserve to have as much of a functioning marketplace as anybody else. I've consistently said this is not a normal market, they don't have choice and that's why … It's unusual for someone who believes in free market as I do to put on the table a prescriptive regulation system, that's exactly what I did because I recognized the prisoners don't have it the way we do.
Nick Gillespie: What about universal service? It came up previous in our conversation, all of the early utility models and certainly for phone service and telecommunications it's all … And for the post office for that matter based on this idea of universal service. There are certain elements or ideas that you've talked about where you seem to be pulling away from that or it doesn't seem to have the same purchase that it once did. Is universal service … Should it be something that needs to be rethought?
Ajit Pai: Well I firmly believe in the promise of universal service. I grew up in a part of rural Kansas that is all too often on the wrong side of the digital divide and so I've made it a priority of the FCC to make sure that anybody in this country who wants internet access in particular should be able to get it. Every one of my actions that I've taken is been oriented around that, creating this broadband deployment advisory committee, streamlining the rules for wireless and wire line infrastructure which we just did last week, making sure that we promote 4G LTE in all parts of this county so you don't have massive dead spots. These are all geared toward making sure that whether you live in Ottawa, Kansas or in Washington DC you have connectivity if you want to take advantage of it.
Nick Gillespie: Well and let's talk a bit about last fall you released a digital empowerment agenda that outlined four main areas of the action gigabit opportunity zones, mobile broadband for world America removing regulatory boundary or boundaries to broadband roll out and promote entrepreneurship and innovation. Is that the framework for your chairmanship?
Ajit Pai: Absolutely, I outlined it in September of last year precisely because I did not want the fate of it to be decide based on what partly happened to control the FCC in January.
Nick Gillespie: Lets run through these real quick and get a sense of the gigabit opportunities Anjit, I think you mentioned something about Detroit is that one of … Is that what you are talking about?
Ajit Pai: Well, so the idea here was we could take a geographic area. It could be a small as an inner city block or as large as a rural county and so long as the income of the people in that area was 75% or less of the national median, then we would extend tax incentives to internet service providers to build up broadband in those areas. We would additionally relieve the payroll side taxes for employers who want to build business in those areas and that … The thought there was this is a way to build on Secretary Jack Kemp's idea for empowerment zones in 1980s and 1990s. They create the digital opportunities in these areas so that we don't leave talent simply withering on the vine
Nick Gillespie: Are they in place anywhere and do you have good evidence of that because I know Kemp's empowerment zones it turned out a lot of the economics analysis show that they really didn't do very much?
Ajit Pai: It's not in place now because congress has to authorize it. We're working with members of congress and the administration to incorporate and to a part of an infrastructure build.
Nick Gillespie: Do you think is super high speed bandwidth or a broadband, is that a type of thing where if you build it they will come?
Ajit Pai: I think it is and it doesn't necessarily have to be gigabit it's a design scale up to a gigabit but I do believe that there is entrepreneurship out there. Just a few weeks ago I was in Youngstown Detroit and Cleveland and Pittsburgh. I got to see these entrepreneurs who are building digital companies in areas that would have never thought of as being havens for entrepreneurship.
Nick Gillespie: Yeah one of your points is also to provide entrepreneurship and innovation so what kinds of stuff are they doing there? What is capable … What is possible when you have really good broadband deployment?
Ajit Pai: Just to give you one example when I was in Cincinnati outlining this idea about a digital empowering agenda, I visited a company called ChoreMaster and what they essentially do is create an online application that allows parents to interact with their kids and get their kids to do chores in a really fun way. It's something that I personally take interest in since I have young kids but that company explicitly told me that they set up shop Over The Orion neighborhood of Cincinnati because they had Cincinnati bills gigabit service to their facility and that was critical for them because they need to do very high bandwidth intensive analytics and the like and that's one of the things we see all-
Nick Gillespie: Over the Orion always considered one of the worst neighborhoods in the country not just Cincinnati's.
Ajit Pai: Exactly and its coming back for this reason.
Nick Gillespie: What about mobile broadband for rural America, how does that play out? You said you grow up in a isolated town in the middle of Kansas so, how do you promote that?
Ajit Pai: Few different ways number one is more wisely spending the federal subsidies that the FCC oversees and we did that past February. Right now we spend billions of dollars every year to try to promote mobile broadband but it doesn't necessarily go to the rural areas that need it the most. An anonymous vote which is something that's pretty remarkable in Washington, we got across the finish line and a revision to our 4.5 billion dollar plan to make sure that that money is spent to build out 4G LTE in parts of the country that don't currently have it. Another piece of it involved requiring wireless carriers to build out more fully to the areas that are covered by their licenses. Right now for example, for certain wireless licenses you only have to build out to 66% of that geographic territory. You are given an exclusive use of those public airwaves and so it seemed to me we should increase that percentage just say 90 or 95% to make sure that the public benefits from that.
Nick Gillespie: Then also removing regulatory burdens to broadband role outs. Part of that is the stuff like the utility poles and the conduits under-
Ajit Pai: Yes streamlining access to utility poles making dig once the national policy of the land. If you have a federally funded transportation project and you are digging up the road, why outlay the conduit, the pipe in the ground that allows any company big or small incumbent or competitor to have access to that pipe. Different ideas like that that would be simply preserving the public interest and advancing broadband deployment at the same time.
Nick Gillespie: I think we agree that all of the bad things that the pro net neutrality forces have said will happen. They haven't come to pass yet but after the repeal of title two, if they do come to pass will you revisit the decision?
Ajit Pai: I've consistently said that if we see bad behavior in the market place, we will take the action within our authority and I will work with my partners at the federal trade commission, Department of Justice in elsewhere so that they can take action but to make sure that that conduct is addressed.
Nick Gillespie: With bad conduct would clearly mean something like blocking particular sites. What about allowing fast lengths for certain types of … Where somebody can pay more to have a quicker deployment of their content is that good behavior or bad as far as you are concerned?
Ajit Pai: It depends of the nature of the arrangement. You can envision some pro competitive arrangements like that. For example if you are a healthcare provider and you are trying to synthesize data quickly with respect to some of patients who are monitoring remotely, that traffic might be important to you, you would think then simply sending an email. Conversely you can imagine some anti-competitive arrangement as well. It's a highly fact intensive inquiry that any regulator would have to examine.
Nick Gillespie: Final question for you chairman Pai how would you know if your tenure is a success? What are the bench marks for that?
Ajit Pai: I think the benchmarks are going to be whether a broadband is more fully deployed throughout the country or whether more Americans are taking advantage of it, whether our digital economy is healthier in a few years than it is today, those are some of the milestones so to speak that I'll be looking for. Ultimately the proofs is going to be in the pudding. I have confidence that the market based light touch regulatory approach is going to be beneficial for the American people and I am committed to delivering on that agenda in the time to come.
Nick Gillespie: All right well we will leave it there thanks so much for talking to us.
Ajit Pai: Nick it's great to be back with you.
Nick Gillespie: We've been talking with the chairman of the FCC Ajit Pai for Reason TV I'm Nick Gillespie.
