Ajit Pai on What the FCC Has Done Right
Since assuming the chairmanship of the Federal Communications Commission (FCC) in 2017, Ajit Pai has insisted on taking a market-based approach to regulating the nation’s always-evolving telecommunications industry. He started his tenure by repealing Obama-era net neutrality rules, despite vocal opposition from congressional Democrats and progressive crusaders who worried that allowing internet service providers to offer products tiered by price and speed would lead to a massive gulf between internet haves and have-nots.
In a conversation with Reason‘s Nick Gillespie, Pai stands by that decision. “We saw predictions that this was the end of the internet,” he says. But the internet is faster now than it was when net neutrality rules were repealed, and America’s digital infrastructure was even able to withstand the massive changes in online behavior brought about by the coronavirus pandemic. Thanks to increased regulatory certainty, companies “were able to build a lot stronger networks in the last three years before anyone even heard of COVID,” he says.
Q: You’ve said that your priority since becoming FCC chairman in January 2017 has been closing the digital divide. How is that going?
A: We’re in the midst of the Rural Digital Opportunity Fund, a $20 billion reverse auction program. We’re allocating money to underserved parts of the country through the market mechanism—not just by cutting a check to a fly-by-night operator and saying “vaya con Dios” but by using the auction mechanism that [Nobel-winning economist] Ronald Coase pioneered almost 60 years ago.
Q: How does an auction help people who don’t have access to good broadband?
A: The traditional model was a universal service fund program that essentially cuts a check to a rural telephone company. Those rural telephone companies didn’t have a strong impetus to use that money to build out the networks, especially in these rural o
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