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Pai a 'known quantity,' a 'good choice' to lead FCC


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Pai a 'known quantity,' a 'good choice' to lead FCC

Fresh off the inauguration, President Donald Trump named Republican Commissioner Ajit Pai as the next FCC chairman.

The move was widely expected as Pai is the senior sitting Republican on the commission and had already met with Trump in the week leading up to the Jan. 20 inauguration.

Notably, unlike some of Trump's other appointments, Pai is a long-time Washington insider. Before being named a commissioner in 2012, he served as a staff member at the commission for several years. Prior to that, he worked for the U.S. Department of Justice and served as a staffer on the U.S. Senate Judiciary Committee.

"Ajit will take the chairmanship as one of the most experienced FCC chairmen in the agency's history," Cooley LLP partner Robert McDowell, who previously served as a Republican commissioner on the FCC between 2006 and 2013, said in an interview.

"[Pai] has an incredible breadth and depth of knowledge regarding the issues that will face the FCC and he is ready to hit the ground running to implement what is a very clear governing philosophy," McDowell said.

Charles Kennedy, head of the Kennedy Privacy Law Firm in Washington, D.C., agreed, describing Pai as "a good choice."

"By appointing someone like Pai, if I were Trump, this would do two things for me: it would give me someone who is largely ideologically aligned with me and also someone who knows the job and has credibility," Kennedy said in an interview.

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In choosing Pai, Trump has also given the media and communications industry an FCC chairman whose views on a variety of issues are fairly well known.

In recent years, Pai has openly criticized a number of the proceedings spearheaded by former FCC Chairman Tom Wheeler, a Democrat who set an aggressive agenda aimed at boosting competition and protecting consumers.

"He has not made it a secret which new rules the Wheeler FCC implemented that he disagrees with," McDowell said of Pai.

Most recently, Pai criticized the findings of a Wheeler-backed investigation into zero-rating plans. In a statement, Pai described the investigation as being part of Wheeler's "partisan, political agendas that only harm investment and innovation."

Pai also objected to the Open Internet Order's reclassification of fixed and mobile broadband providers as common carriers under Title II of the Communications Act. Rather than protecting a free and open Internet, Pai said the order gave the FCC "unilateral authority to regulate Internet conduct, to direct where Internet service providers put their investments, and to determine what service plans will be available to the American public."

It is unclear how or if Pai might seek to reverse the order in his new role as chairman.

In the broadcast space, SNL Kagan analyst Justin Nielson noted that the new chairman has "given his support for lifting the newspaper/broadcast station ownership ban, loosening the TV station 39% ownership cap or reinstating the UHF discount" — all positions that could lead to greater M&A opportunities for broadcast station owners.

"Pai also was not a big proponent of the spectrum auction, but now that it's done he would push for a smooth repacking process," Nielson said in an interview.

Given all this, it is perhaps not surprising that the National Association of Broadcasters has already thrown its support behind Pai as the new chairman.

"Ajit Pai is a known quantity who brings integrity, good humor and a fierce intellect to the Commission. We look forward to working with him and his colleagues on a pro-growth FCC agenda," NAB President and CEO Gordon Smith said in a statement.

One thing that still remains unclear is what regulatory powers the FCC might keep or give up under a Trump administration.

Broadcasting & Cable recently reported that the Trump team has signed off on a plan put forward by the FCC transition team that would first "restructure FCC bureaus" to eliminate any regulatory differences between new and traditional operators, and then eventually, transfer "duplicative" functions to other agencies. These "duplicative" roles might include promoting competition and protecting consumers — two things Wheeler felt very passionate about but that some have argued are more the province of the Federal Trade Commission.

Kennedy noted that certain members of Trump's FCC transition team have previously advocated for the FCC's powers to be significantly curtailed. One team member — Mark Jamison, director of the University of Florida Public Utility Research Center — famously asked in an October 2016 editorial, "Do we really need the FCC?" He concluded, "No, but yes," explaining, "Most of the original motivations for having an FCC have gone away."

Kennedy noted that Pai does not seem quite as extreme in his views as Jamison.

"There are people on the transition team who would be very happy if there were no FCC or if there were an FCC that just handled radio spectrum and didn't do much else," Kennedy said, adding, "I don't know that Pai is quite as robust as those people in his views but he's certainly very skeptical of regulation."

One thing that will be interesting to watch is whether Pai pursues policies or compromises that lead to less partisanship at the FCC. He has previously said he would like to see the commission move toward more bipartisan cooperation, and one of the key tenets of his stated regulatory philosophy is, "Good communications policy knows no partisan affiliation."

McDowell said he is optimistic on this front.

"I think he will try to find consensus on many issues, such as making more spectrum available for private sector use and consumer use," McDowell said.

Based on the tentative agenda for the FCC's Jan. 31 open meeting, the odds are good Pai will get a unanimous vote at his first meeting as chairman. There is so far only one item: a report and order to eliminate two public inspection file rules for broadcasters and cable operators.

It is as noncontroversial an item as a new chairman could hope for, and all three current FCC commissioners — Republican Commissioner Michael O'Rielly, Democratic Commissioner Mignon Clyburn and Pai himself — have all previously supported it.