As Winter Storm Toby bore down on the East Coast Wednesday, FCC Chairman Ajit Pai took aim at the Title II regulatory burden faced by cable operators — and the tech giants involved in the net neutrality debate — at the American Cable Association’s 25th annual summit in Washington, D.C.
Pai also applauded smaller cable operators for their role in creating competition and closing the digital divide through innovation and broadband deployments, according to a transcript of his keynote speech supplied by the chairman’s office.
The chairman particularly slammed edge providers who had a hand in forcing Title II regulations on ISPs, who, under the 2015 order, were classified and regulated as common carriers.
“Silicon Valley tech giants with market caps in the hundreds of billions of dollars demanded that the FCC regulate small companies like yours more heavily than they were,” Pai said. “That’s right … [T]hey claimed that small broadband providers like Spencer Municipal Utilities and Laurens Municipal Utilities were anticompetitive monopolists who posed a greater threat to a free and open internet than companies like Google, Facebook and Twitter. Some of us understood back in 2015 that this was absurd. In 2018, with each passing day, many more people are waking up to reality.”
Pai said that outside the Beltway, Americans’ top internet complaint is not about concern over ISPs blocking content, but adequate access and competition.
He cited overregulation related to the Title II order, which the FCC voted to reverse last December, as a “major threat” to investment.
What resulted from the order’s “regulatory onslaught,” Pai said, was “1930s utility-style regulation being imposed” on smaller cable operators, with funds siphoned off to pay lawyers and advisors to make sense of the new rules — money that smaller ISPs could not easily afford or could have been used to for network expansion.
“On top of that, you faced the possibility of after-the-fact rate regulation that could reduce returns on investments and prevent you from raising further capital,” Pai said.
As Pai reflected on ACA’s 25-year history, he praised members for embracing broadband changes early on and pushing ahead with innovation.
He pointed to ACA member Hotwire Networks, which committed to an all-fiber network nearly 20 years ago, and Wave Broadband, which recently debuted a new cybersecurity service to mitigate DDoS attacks.
While Pai encouraged members to apply for federal broadband subsidies through the FCC’s upcoming Connect America Fund Phase II auction, he noted that ACA members are already helping close the digital divide, with almost half of their combined 18 million households served located in small cities or rural areas.
“Indeed, without any subsidies, you’ve already built out networks that reach 840,000 homes in areas that the FCC has identified as the most expensive to serve,” the chairman said.
Pai also said smaller businesses, like many ACA members, help drive competition, which “creates incentives for better service and lower prices for consumers.”.
“Currently, over 700 small providers deliver internet service to more than 7 million subscribers. These businesses — many of them ACA members — have invested $2 billion per year to upgrade networks and expand service areas,” Pai said. “This investment, in turn, helps create many well-paying jobs in communities that often are struggling. And much of this expansion comes in areas with an incumbent.”
