The Trump administration has appointed Commissioner Ajit Pai as chairman of the Federal Communications Commission, it announced Monday. Pai’s predecessor, Chairman Tom Wheeler, stepped down Jan. 20 — as is customary once a new administration takes power.
Pai has been at the FCC since 2012 and is known to be, as Republican commissioners trend, in favor of fewer regulations rather than more. Specifically, he’s provided dissenting comments on various "pro-privacy" matters, including the Open Internet Order and the agency’s privacy rules for broadband service providers, among others.
With Pai as chair, there will be two seats to appoint to fulfill the bipartisan commission. Currently seated, after Pai's move to the chairmanship, are Commissioner Mignon Clyburn, a Democrat, and Commissioner Michael O’Rielly, a Republican. By mandate, Trump will appoint one more Republican and one more Democrat. Wheeler’s head of enforcement, Travis LeBlanc, has not yet resigned but is expected to any day now.
So what should be expected from Pai and a Republican-led commission? Former FCC leadership largely agree: The classification of broadband providers as common carriers is going to be rolled back, and the FCC is going to hand privacy regulation back to the Federal Trade Commission.
Russell Hanser is an attorney at Wilkinson Barker Knauer, but he spent 2003 to 2005 at the FCC in the Wireline Competition Bureau and the Office of the General Counsel. He served under Commissioner Kathleen Abernathy. He remembers 2005, when the FCC leadership shifted from former Chairman Michael Powell to former Chairman Kevin Martin.
“My sense is that there can be stress and uncertainty during a transition, and it’s not only the transition from one party to another, but even from one chair to another,” he said. Recalling the Powell-Martin transition, he said, “Both were Republican appointees under [former President George W. Bush] but with very different leadership styles and priorities and personalities that a created a change in how the agency ran and what personnel were in what slots. It doesn’t have to be a change in parties."
"The Commission isn't even the expert agency when it comes to privacy issues; the Federal Trade Commission is." — Newly appointed FCC Chairman Ajit Pai in a 2016 speech
Christopher Olsen, now a partner at Wilson Sonsini, has a unique perspective on privacy regulation, with enforcement roles at both the FCC and FTC on his resume. He spent seven years at the FCC is various leadership positions, including as special counsel to the Telecommunications Consumers Division and as deputy chief of the enforcement bureau. He predicts a “180 degree change,” citing a recent transition report, in how the agency approaches privacy. The report suggests privacy work will be handed back to the FTC, as historically was the case before the FCC’s reclassification of broadband service providers as “common carriers” and so subject to FCC privacy rules under Section 222 of the Communications Act.
“I do think the change in leadership will likely have an immediate effect on enforcement priorities, and I suspect you will see less of an emphasis on privacy and data security enforcement,” Olsen said. He was quick to add, however, that while the FCC may focus less on privacy and data security moving forward, the FTC will pick up that slack:
“The FCC has only been active on privacy and data security for a short time, they don’t have a long history, so rolling it back doesn’t affect years or precedent at the FCC, and the FTC has been very active in that space.”
Indeed, in a February 2016 speech Pai made at the Heritage Foundation, he said, quoting Commissioner O'Reilly, "the Commission isn't even the expert agency when it comes to privacy issues; the Federal Trade Commission is."
At the time The Privacy Advisor spoke to Hanser, it had not yet been announced that Pai would be the next chairman of the agency, but Hanser suspected that to happen at the time. He said he wouldn’t expect the new chairman to be making massive, wholesale changes at the agency “right off the bat.”
Regardless of when change happens, Olsen said Pai was “not a big supporter of the work that Travis LeBlanc undertook in the privacy space at the FCC, and I suspect that there will be much less of a focus on privacy work at the FCC and much more focus on things like enforcement of universal service fraud, e-rate fraud, things that involve misuse of government funds.”
Christin McMeley is an attorney at Davis Wright Tremaine and had a long working relationship with the FCC as she’s filed comments on behalf of her clients and previously worked as VP, CPO, and deputy general counsel at Charter Communications. She agreed that changes in administration create changes at the higher level, but she said Pai is moderate in his approach.
“His temperament to date has been very even-keeled compared to a lot of the former commissioners,” she said. During the debates over the broadband re-classification rulemaking, Pai really worked to reach across the aisle and get to consensus, she said, anticipating his leadership style as chairman.
But Pai has not been shy about his disdain for the FCC’s attempt at regulating the Internet.
In the same 2016 speech cited earlier, he called the FCC’s Title II decision a “313-page solution that wouldn’t work to a problem that didn’t exist,” adding it was not a sheep that came in wolf’s clothing. “No, this wolf came as a wolf,” he said. His concern is with, as one might expect, the free market digital economy. He worries about Internet regulation slowing down investment and broadband deployment. He said the decision to reclassify broadband suppliers as common carriers, and thus regulate the Internet, was an example of “raw, political power” at the hands of the Obama administration.
There's momentum to reverse the broadband rules, also: A Jan. 17 petition was filed by various industry groups asking the FCC to reconsider.
Despite this, McMeley doesn’t expect privacy to take a hit, in the long run. “Privacy is a bipartisan issue,” she said.
Hanser agrees with McMeley that privacy is a bipartisan issue, but, he says, there are different approaches to it, with “Republicans favoring somewhat more market-oriented approaches and the Democrats traditionally favoring somewhat more proscriptive approaches. With respect to the broadband privacy rules in particular, I think we’ve seen some of that."
Peter Karanjia, also at Davis Wright Tremaine, was deputy general counsel at the FCC from 2010 to 2013. He said most people expect Pai to push to overturn the reclassification of broadband providers as common carriers, but it’s unclear how long that would take.
“With any kind of regulatory change like that, part of the answer is, it depends. That sort of change certainly should not take years — realistically it would take months,” he said. But that depends on whether the commission decides the change would require it to take public comments, as is required for proposed rulemakings under the Administrative Procedure Act.
Karanjia said the challenge for industry and advocacy moving forward will be the sheer number of competing priorities. While there are, especially on industry’s side, high hopes for what might happen in the first few months of the new administration, “leadership only has a certain amount of bandwidth," he said. “One challenge will be what realistically can get done.”
Now it's up to Pai to figure that out.
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