Pai: FCC Should Scrap Extraneous 'Voluntary' Merger Conditions

Says the commission needs to do its job more nimbly, and do more cost-benefit analysis

By John Eggerton -- Broadcasting & Cable, 7/9/2012 12:50:29 PM

New FCC commissioner Ajit Pai suggests he does know jack about the FCC, and suggests that means being more nimble and more quick.

Pai says the FCC must get its work done faster, and suggests one way might be to stop applying extraneous "voluntary" conditions to mergers and start applying cost-benefit analysis before deciding to impose new regulations.

Those suggestions come after more than 80 meetings with stakeholders, members of Congress and others, says the commissioner according to a copy his prepared testimony for Tuesday's (July 10) House Communications subcommittee FCC oversight hearing.

Pai said the common refrain he has heard was how "unreasonably delayed" FCC actions have been, from months to years to most of a decade.

"We must act with the same alacrity as the industry we regulate," he says, pointing to the real-world consequences of regulatory uncertainty: new technology on shelves, capital "lying fallow"; job cuts. He will be preaching to the choir, particularly when it comes to Republican leadership on the committee, which has been pushing FCC reg reforms to speed decisions.

Pai said Congress has offered some good ideas on reform, but says the FCC does not have to wait for Congress to act. For example, he says, "the adoption of new regulations always should be predicated upon the Commission's determination that their benefits outweigh their costs....Also, in the context of reviewing transactions, the agency, starting today, could and should stop imposing conditions and insisting upon so-called ‘voluntary commitments' by parties that are extraneous to the transaction and not designed to remedy a transaction-specific harm."

Pai says the commission needs more shot clocks and sunset clauses -- it currently has an informal shot clock on mergers, but in the past has exceeded that deadline by months or more in some cases.

Pai also puts in a plug for getting more wireless spectrum into the marketplace. Verizon, for example is currently trying to buy cable spectrum to use in delivering advanced services, and the FCC is working on auctions to reclaim broadcast spectrum for wireless.

Pai also said that "not later than" the end of September, the FCC should come out with new rules to allow for more flexible, terrestrial use, of satellite spectrum, something it has proposed to do.

Pai shows himself a big fan of the incentive auctions Congress authorized this year to pay broadcasters for exiting spectrum. He says those auctions hold the "greatest promise" for increasing wireless broadband spectrum in the intermediate term. He said the commission needs to get going with that rulemaking process this fall as well, though he acknowledged the "daunting" task of repacking in markets like Detroit--border issues with Canada make that market a particularly tough one.

Pai registers his unease with applying special access regulations to IP delivery, and with the still open Title II docket -- FCC Chairman Julius Genachowski has declined to close the docket on applying some Title II regs to Internet access service. "I am worried that recent hints about the direction of special access regulation -- not to mention the still-open Title II proceeding -- are only going to further chill investment," he says.