FCC chair Ajit Pai explains why he wants to scrap net neutrality

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• JUDY WOODRUFF:

  A political fight is brewing about access to the Internet. The new head of the FCC, the Federal Communications Commission, wants to clear away regulations about who controls and polices the flow of content on the Internet.

  William Brangham has that.

• WILLIAM BRANGHAM:

  We're talking here about what's known as net neutrality, not the easiest concept to grasp, so bear with me.

  Almost all of us in America get our Internet access via one main provider. These are the telecom and cable giants like Verizon, Comcast, Charter, Time Warner. They provide the infrastructure that delivers the bounty of the Web to our homes and phones – sites and apps like Google, Netflix, Facebook, Instagram, you name it.

  The telecoms build the highway. The others guys are like the cars traveling that highway.

  The idea of net neutrality is that the telecoms have to treat that highway as an open road. They can't pick and choose which Web sites or services get to you faster or slower. The fear is that, if they do have that power, they will be tempted to favor their content, their sites, their own videos over a competitor's.

  But the telecoms argue that's not fair, they should be able to control that flow, and be able to charge more for faster access.

  In 2014, the Federal Communications Commission under President Obama wanted to lock in these net neutrality rules, but it faced intense pushback by the industry.

  The fight even spilled into pop culture, with this from HBO's John Oliver.

  JOHN OLIVER, Host, "Last Week Tonight With John Oliver": If we let cable companies offer two speeds of service, they won't be Usain Bolt and Usain Bolt on a motorbike. They will be Usain Bolt, and Usain bolted to an anchor.

  (LAUGHTER)

• WILLIAM BRANGHAM:

  But those net neutrality rules did pass and have been in place for the last three years.

  But Ajit Pai, President Trump's new FCC chairman, now wants to get rid of those rules, arguing they're too burdensome. And this week, he began the process of rolling them back.

  And FCC Commissioner Ajit Pai joins me now.

  Welcome to the NewsHour.

• AJIT PAI, Chairman, Federal Communications Commission:

  Thank you for having me.

• WILLIAM BRANGHAM:

  So, you, I understand, are not a fan of these net neutrality rules from a few years ago. What is your principal concern?

• AJIT PAI:

  Well, I favor a free and open Internet, as I think most consumers do.

  My concern is with the particular regulations that the FCC adopted two years ago. They are what is called Title II regulations developed in the 1930s to regulate the Ma Bell telephone monopoly.

  And my concern is that, by imposing those heavy-handed economic regulations on Internet service providers big and small, we could end up disincentivizing companies from wanting to build out Internet access to a lot of parts of the country, in low-income, urban and rural areas, for example.

  And that, I think, is something that nobody would benefit from.

• WILLIAM BRANGHAM:

  Is there evidence, though, that these rules have disincentivized those companies? There are — businesses are doing very, very well. They're spending billions on the spectrum.

• AJIT PAI:

  There is significant evidence that investment in infrastructure has gone down since the adoption of these rules.

  For example, there is a study by a highly respected economist that says that among the top 12 Internet service providers in terms of size, investment is down by 5.6 percent, or several billion dollars, over the last two years.

  And amongst smaller providers as well, just literally this week, 22 Internet service providers with 1,000 customers or less told us that these Title II regulations have kept them from getting the financing that they need to build out their networks. And, as they put it, these net neutrality regulations hang like a black cloud over our businesses.

  And so what we're trying to do going forward is figure out a way that we can preserve that free and open Internet that consumers want and need and preserve that incentive to invest in the network that will ultimately benefit even more consumers going forward.

• WILLIAM BRANGHAM:

  I know there is a whole other group of Internet companies, Facebook, Google, Instagram, those types of companies that have said to you, these rules are not a hindrance to us. We have been able to thrive and survive under these rules. Don't change them.

  What do you say to them when they argue this to you?

• AJIT PAI:

  Well, two different points.

  First, if you look carefully, a lot of those companies don't say that they like Title II specifically, these particular regulations. What they say is that they care about the principles of a free and open Internet.

  And so I actually think there is a decent amount of common ground there. And it's just a matter of finding the appropriate legal framework to reach that common ground.

  But the second point I would make is that these companies are the best evidence of the success of the light-touch regulatory framework that originated in the Clinton administration, and that's something that I favor.

  From the dawn of the commercial Internet in the 1990s until 2015, we had light-touch regulation, where the agency or where the country monitored the market, let it develop organically, and then took targeted action if necessary, if there was an example of anti-competitive conduct.

  And it's under that light-touch framework that the companies like Google, like Facebook, like Netflix were able to become globally known names. And that's the kind of success that we want to promote in the future with light-touch regulation.

• WILLIAM BRANGHAM:

  One of the issues here is whether or not we treat broadband like a utility. And if it's treated like a utility, the requirement is that you as the provider are not allowed to put your finger on the scale and slow one person down or speed somebody else up.

  And I just want to pose a hypothetical to you.

• AJIT PAI:

  Sure.

• WILLIAM BRANGHAM:

  Let's just say Comcast created a new TV series, and it just so happened that that competed with a Netflix series very similarly.

  If these rules go away, how is there not an incredible incentive for Comcast to slow Netflix down coming into my house and make their video, the Comcast video, very robust?

• AJIT PAI:

  So, under that hypothetical, one of the things that's important to remember is that it is a hypothetical.

  And we don't see evidence of that happening in the marketplace on a widespread level.

• WILLIAM BRANGHAM:

  There have been some examples of ISPs blocking certain things. The Google Wallet was blocked. Skype was blocked. One Canadian telecom blocked pro-labor sites.

  I mean, they're — it's not like this doesn't happen.

• AJIT PAI:

  Well, there are isolated cases, but if you look at the FCC's own records, there are only scattered anecdotes to support this.

  And the argument I have made is that, in order to justify preemptive regulation of all 4,462 Internet service providers, you should have pretty concrete evidence of an overwhelming market failure.

  But, secondly, the other argument I would make is that the hypothetical is a classic question of competition and consumer protection law.

• WILLIAM BRANGHAM:

  So, you would feel comfortable telling consumers, you can trust the Comcasts, the agencies, the Verizons, to not do that, to not put their finger on the scale and promote their stuff, at the expense of someone else's?

• AJIT PAI:

  Not at all.

  I would say, as a government regulator, that we don't put faith in any single particular sector of the economy, a particular company. We put our faith in the rule of law. And the rule of law, which includes antitrust law and consumer protection law, is basically administered by the federal government agencies and state agencies that are charged with executing that law.

• WILLIAM BRANGHAM:

  Back when the FCC was first talking about changing these rules a few years ago, there was something like four million comments posted. And the overwhelming majority of those were people saying, we want net neutrality. We want to know that these protections are in place.

  Does that evidence not sway you that maybe these rules shouldn't be dismantled?

• AJIT PAI:

  Well, I certainly understand that there is a wide variety of public interest in this particular issue.

  But when I meet with consumers — and I have met with folks from Kalamazoo, Michigan, down to Carthage, Mississippi, from Barrow, Alaska, to Diller, Nebraska, what they tell me is that the concern is not that their Internet service provider is blocking lawful traffic or doing something like that. It's that they want more competition. They want better, faster and cheaper Internet.

• WILLIAM BRANGHAM:

  All right, FCC Commissioner Ajit Pai, thank you very much for being here.

• AJIT PAI:

  It's great to be with you.