Advertisement

SKIP ADVERTISEMENT

Ajit Pai, F.C.C. Chairman, Moves to Roll Back Telecom Rules

Ajit Pai, chairman of the F.C.C. Since being appointed in January, he has abolished a plan to open the cable box market, suspended several participants from a program for low-income broadband subsidies, and chipped away at net neutrality.Credit...Eric Gaillard/Reuters

WASHINGTON — Ajit Pai, the chairman of the Federal Communications Commission, is taking the next steps to unwind Obama-era rules and other regulatory efforts that had restricted the abilities of telecommunication companies and broadcasters.

With two items up for vote on Thursday that are expected to pass, Mr. Pai is carrying forward a swift Republican attack on telecom rules. The rollback will empower big telecom and media firms that have lobbied aggressively for deregulation, but consumer groups say it may also eventually put consumers at risk of higher prices and fewer options for services and media.

Since being appointed by President Trump in January to lead the commission, Mr. Pai has abolished a plan to open the cable box market, suspended several participants from a program for low-income broadband subsidies, and chipped away at net neutrality, which guarantees consumers equal access to all internet content. A proposal to roll back net neutrality rules is expected as soon as this month.

“In just three months, he’s taken many steps to reduce choices for consumers, make services more expensive or roll back the rights people thought they had online,” Phillip Berenbroick, the senior policy counsel at Public Knowledge, a left-leaning consumer group, said of Mr. Pai.

The two specific items to be voted on Thursday include a plan to make it easier for broadband providers to charge other businesses higher prices to connect to the main arteries of their networks. The action would clear the way for internet service providers like AT&T and CenturyLink to raise connection fees charged to hospitals, small businesses and wireless carriers in many markets where there is little or no competition for so-called backhaul broadband service.

The other item up for vote is a move to ease the limit on how many stations a broadcast television company can own. The action is expected to invite more consolidation in that sector.

The efforts by Mr. Pai are an affirmative response to intense lobbying by telecom firms like AT&T and broadcast television companies such as Sinclair and CBS. Corporate lobbyists have recently flooded the F.C.C. and the offices of lawmakers urging a rollback of Obama-era rules that they view as having become too burdensome on their businesses.

Mr. Pai’s effort to deregulate price caps on business-to-business internet service, known as business data services, is a stark example of his drastic change of direction from the previous administration. The estimated $45 billion market for business data services is crucial for wireless carriers and is behind credit card swipes, charges at gas pumps and the transfer of medical records from hospitals.

Efforts to regulate prices began in 2005, before President Barack Obama took office. Under Mr. Obama, the F.C.C. pushed for stronger limits on telecom firms that provide business data services by imposing stricter standards on connection rates in less competitive markets.

The F.C.C. chairman in the Obama administration, Tom Wheeler, had said there was a lack of competition among telecom firms, making small businesses, such as gas stations and retailers, and major wireless carriers like Sprint vulnerable to price increases.

Those increases are passed on to consumers as the businesses raise prices for goods and services to recoup the cost of higher internet connection fees, Mr. Berenbroick said.

Mr. Wheeler was unable to get his proposal approved before the presidential election in November, and once Mr. Pai was named to run the agency, the proposal was killed.

Late last month, after intense lobbying by AT&T and telecom trade groups, Mr. Pai introduced a plan to loosen the standards for rate regulations in business data services.

Mr. Pai declined to comment on the proposal.

In more than 10 meetings with F.C.C. officials since the November election and in dozens of other meetings last year, AT&T’s top lobbyists argued that the market was competitive, with cable companies also serving business customers.

“The data show that there are competitive facilities blanketing the country, fighting for business customers nearly everywhere customers buy these services,” AT&T’s vice president for federal regulatory affairs, Caroline Van Wie, wrote in a blog post this week.

Small businesses criticized Mr. Pai’s deregulatory efforts, saying they were introduced without a period of public comment. The businesses also said cable operators did not serve all business customers and often did not provide the same robust connectivity that telecom companies do for wholesale connections to the internet.

This month, the Small Business Administration’s independent office of advocacy met with officials at the F.C.C. to ask for a delay in the vote.

The proposed competitive market test “may result in reduced choices for small businesses,” S.B.A. officials said in a public filing about the meeting.

The other vote on Thursday involves lifting a limit on the amount of certain airwaves any one television broadcasting company can own throughout the country. Mr. Pai has argued that media ownership rules are outdated and ignore the increased competition that media firms face from Facebook, Netflix and other internet companies.

But without the limits, which were introduced in 2013 by Mignon L. Clyburn, then the acting F.C.C. commissioner and now the sole Democrat on the commission, the agency may be paving the way for industry consolidation, giving too much power to media corporations that can influence public opinion, some Democrats and consumer groups warn.

Representative Nancy Pelosi of California, the House Democratic leader, wrote a letter to Mr. Pai this week criticizing the proposal. She singled out the possibility that Sinclair would buy Tribune Broadcasting after the F.C.C.’s vote.

“That would be bad news for consumers in Tribune’s markets in two ways,” she said. “First, consumers would lose an independent voice in their media market, and second, consumers could see their cable bills go up because Sinclair charges cable operators more than Tribune for retransmission consent.”

Follow Cecilia Kang on Twitter @ceciliakang.

A version of this article appears in print on  , Section B, Page 9 of the New York edition with the headline: F.C.C. Chairman Moves to Roll Back Regulations Restricting the Telecom Industry. Order Reprints | Today’s Paper | Subscribe

Advertisement

SKIP ADVERTISEMENT