CAF II Auctions, Reduced Regulations Are Highlights of FCC Chairman’s Address to ACA Summit
Closing the digital divide and reducing regulations were hallmarks of Federal Communications Commission Chairman Ajit Pai’s March 21st keynote address to the American Cable Association’s 25th Annual Summit. His began his remarks by commenting on how small cable companies have evolved over the past quarter century, expanding their offerings from one-way video to robust broadband, in addition to other services.
However, he noted that 24 million Americans, or 8 percent of the country, still lack access to broadband, and that the gap is more prevalent in rural areas. Despite higher costs, he applauded small service providers for investing in broadband services. “First,” he stated, “closing the digital divide is the FCC’s top policy priority. And small broadband providers are critical to getting that job done.”
USF & Net Neutrality
Pai focused on two areas the Commission is working on to help: reforming the Universal Service Fund (USF), and reducing regulation, particularly rolling back previous rules on network neutrality.
Pai urged attendees to participate in the upcoming Connect America Fund Phase II reverse auctions, previously known as the USF’s High Cost fund. He noted that the auctions are technologically neutral, designed to be efficient, and aims to target funding wisely; i.e., USF funds should not be used to overbuild in areas where customers are already served. As the CAF II filing deadline closes on March 30, Chairman Pai urged rural broadband providers to file soon.
The chairman then discussed how scaling back over-regulation will help with broadband deployment. Pai pointed to the 2015 Title II Order, commonly referred to as the Net Neutrality Order, as the prime example of burdensome regulation. He stated that even though consumers were not complaining about blocked online content, providers, especially small ones, were diverting scarce resources away from infrastructure investment and into compliance. “Money that could have expanded networks,” he said, “was now being siphoned off to pay lawyers and consultants to make sense of the new rules.” He also noted that the Order’s “General Conduct” standard purposefully declined to say what conduct was prohibited, so new offerings, services and business models “would now be subject to second-guessing by an un-elected group of Washington regulators.”
“I’m proud to say,” he continued, “that last year, we reversed the Title II Order. We restored the light-touch approach to network regulation that served us well for almost 20 years, paving the way for over $1.5 trillion in private investment to build out wired and wireless networks.” He was roundly applauded by the audience at this point.
Retransmission Consent and Program Access
After his address, Chairman Pai was joined by ACA President Matt Polka for a one-on-one conversation. They went into a bit more detail on net neutrality, discussing how the Federal Trade Commission is the more appropriate agency to serve consumer protection functions, as they have authority over both online services and the ISPs that provide access, enabling a level playing field.
Unsurprisingly, Matt Polka noted the continued struggles that small video providers have regarding retransmission consent. Polka stated that existing regulations permit broadcasters and programmers to increase fees by staggering amounts, with virtually no market restraints. While Pai acknowledged that the larger reforms long sought by ACA and others were for the most part not implemented, he did point to the fact that the FCC had prohibited joint negotiations by broadcasters within the same market. Absent this prohibition, broadcasters could work together to set prices even higher. Finally, he also recognized that the Commission should consider multiple requests to define the National Cable Television Cooperative, which obtains programming on behalf of many providers, as a “buying group” for program access purposes.
[Steve Pastorkovich is a Washington, D.C.-based consultant specializing in telecommunications, trade association operations, and public policy. LinkedIn https://www.linkedin.com/in/steve-pastorkovich-4a94412/]
