FCC Chairman: We Don't Need to Preemptively Micromanage Every Business

Ajit Pai, Chairman of the Federal Communications Commission (FCC), joined Glenn on radio to discuss the future of the internet and net neutrality. If a government regulator exists that Glenn likes, it's Ajit Pai, who stood alone in a hostile world at the FCC during the Obama administration. Pai favors light regulation to ensure consumers have a competitive choice and companies have a greater incentive to invest in the internet.

Enjoy the complimentary clip or read the transcript for details.

GLENN: The head of the FCC. The FCC chairman, Ajit Pai, now joins us.

Ajit, I don't know if you are aware of this at all, but we've been watching you for a while. I have -- I have no idea how you got by Obama. But we're glad you did.

AJIT: Thanks so much, Glenn. I really appreciate the kind words. And grateful to you for making time for me today.

GLENN: Oh, you bet. We have a lot of questions for you. And I want to talk to you about net neutrality. I want to talk to you about the cable industry and this cry of fake news and where you think we're going.

Let's start with probably net neutrality.

Net neutrality is -- is in some ways, a -- a nightmare and will limit people. In other ways, people will look at this and say, "Wait. I don't want my cable operator being able to pick and choose winners and slow down, you know, the speeds of YouTube, if they're trying to promote their own YouTube." Can you make the argument?

AJIT: Absolutely. I think the key point here is nothing about the internet was broken. From the dawn of the internet age in the 1990s until 2015, the internet economy in the United States was the envy of the world precisely because President Clinton and a Republican Congress agreed that instead of regulating the heck out of this new technology, we would let it develop and take targeted action as necessary.

And that's, I think, part of the reason why we saw the tremendous explosion and activity online. But in 2015, on the party-line vote, the FCC imposed these heavy-handed rules that were developed for Mondale, the telephone monopoly back in the 1930s.

And as a result, we've seen less investment in networks. We're seeing less competition than ever. And I think that's one of the things we want to address going further, is, you know, light-touch regulation I think is the best calibrated to make sure the consumers have more competitive choice, and the companies have a greater incentive to invest. And that's where we're heading.

GLENN: So how would you address -- I said this to Ray Kurzweil who is part of the Singularity University. Works for Google. And I said, "So, Ray, why wouldn't Google develop an algorithm that would find people who are using the search engine to create a bigger and better Google? Why wouldn't they just -- I mean, that's human nature to protect yourself. If somebody is coming -- you can piece together in advance, "Wait a minute. These people are looking to build a better Google." Why wouldn't you just shut them down? He said, "Oh, that would never happen because we're all good people." I don't necessarily subscribe to that theory.

But, you know, we are now in the internet age, playing devil's advocate, of these gigantic corporations that you're just not going to -- the little guy is not going to compete against Google. They're not going to compete against Apple. They're not -- you can't compete around Comcast.

AJIT: And the point I consistently made is we don't put our faith in people or in companies. What's that saying? If men were angels, no laws would be necessary.

GLENN: Right.

AJIT: Well, we have a system of laws, and interest in competition laws on one hand and consumer protection laws on the other. And those are administered by a -- say the Federal Trade Commission or Justice Department here in Washington, by state agencies across the country. So there's a whole framework of laws to protect against that kind of conduct.

What we don't need is the FCC preemptively micromanaging every single business in the United States, not just the big ones that you mentioned, but even the smaller companies that have told us we're holding back on investment now because of these heavy-handed investments.

GLENN: So we're talking to Ajit Pai, he's the chairman of the FCC. You know, as I look at the most hated services in America -- or service providers, it's your electric company, it's your insurance companies, it's your cable companies. Those are all the ones that are the most heavily regulated.

However, as somebody who has tried, without $200 million behind me, to break in and have a -- a groundswell -- a verified groundswell of -- of support behind me, these -- to break into cable is absolutely impossible if you are a voice that the companies want to block. You just can't do it. How do we balance that and make sure that, you know, the app system -- because that's why we -- that's why we're online. Okay. Well, good. We'll do it online. But how do we make sure that the app system isn't blocked now by a Comcast or an Apple, where you're just not going to get in and break through?

AJIT: That's a terrific question. And two different answers: Number one, the way you do it is by promoting more competition. You make sure that the barriers to entry, so to speak, are low. That people like you can express yourselves over a variety of different platforms. And number two, to the extent that that's a concern, remember that the people who are promoting this Title II regulation through the US government are not the friends of free speech and free expression. These groups are consistently saying that they want government control of the internet, not just for its own sake, but in order to regulate how speech and expression happens online.

GLENN: Right.

AJIT: And they've been very open about this throughout the years.

GLENN: But you can't -- as a person, I can't start my own cable company. It's all regulated. I can't start one.

AJIT: And that's why we've had a very aggressive agenda in the three months that I've been in the chairman's office to make sure that we enable more companies to make that decision, to enter the marketplace, removing some of the barriers that they found, in terms of the rules, and making it easier for them to raise capital and to enter these marketplaces. And we want the smaller companies that are getting squeezed by these regulations to finally enter the market and provide a competitive option.

GLENN: Good for you.

So help me out on this. Ted Koppel, who I have a lot of respect for, has done a lot of great journalism over his lifetime -- I was talking to him, and he was concerned about all this fake news. And I said, at the end of the day, go back to the revolutionary war, there was tons of fake news back then. We're just in a new situation. And we haven't found our way to balance it yet. But you got to trust the people.

And he immediately said, "I think that we need to start, you know, having a license for people to be on the internet and to present news. We have to verify those people who are online."

That's insane.

AJIT: I couldn't agree more. And I have a lot of respect for Ted Koppel's career. But, frankly, his comments are repugnant to the spirit and the letter of the First Amendment. In fact, that's the very reason why John Milton in 1644 wrote his great treaties on free expression, Areopagitica, where he said that, you know, look, the king has no business licensing people to allow them to speak. We -- the entire premise of western civilization is that you don't have a gatekeeper allowing you to speak only at the whim of the king. And that's the same here in the United States. The last thing I think we want is government -- sort of regulators like me deciding who speaks and who doesn't. That's the fantastic thing about the internet age, I think.

STU: Don't you think though, Glenn -- and Ajit Pai -- we're talking to the FCC chairman. You have this situation where it's not about what happened in 1644 or anything. It's about what's coming up on May 30th, which is season five of House of Cards.

JEFFY: Thank you. Thank you.

STU: People want their Netflix. They want it streamed. They don't want their evil cable company slowing it down. Is that something that needs to be regulated, or does the market actually work that stuff out?

AJIT: To me, the market works it out. The best evidence of that is the digital economy that we had, prior to 2015 when we imposed these rules.

Companies were not engaging in the blocking of lawful content. And to the extent that we have concerns about competition, the best way to get there is not by imposing these heavy-handed regulations that slow down infrastructure investment, especially by some of the smaller companies that would give you a competitive option. It's by making sure we have clear-cut rules of the road, that are market-friendly, that incentivize more companies to enter this space.

And so, you know, look, I'm all in favor of the government looking at any competitive problems as they pop up. Preemptively regulating, from the Fortune 500 companies, down to the tiny companies in Little Rock, Arkansas, is not the way to get there.

GLENN: I will tell you, Ajit, I look at this time period -- and I'd love to hear your point of view of this. I look at this time period of American history as a combination of the industrial revolution and heavy emphasis on Tesla and Edison, all in about a 20-year period. I mean, what's coming in -- in technology and communication has already been profound. But it's going to become even more profound.

And, you know, as a student of history -- and you obviously are one as well. When you look back at those days of Tesla and Edison, in many ways, Tesla was right. Edison was just good at playing the game with the government.

And he was a -- excuse my language, but a son of a bitch. And that's not French. That's English.

STU: Can we say that on the air, Mr. FCC Chairman?

GLENN: Oh, yes, I shouldn't have said that with the FCC chairman.

AJIT: I'll give you a pass, don't worry.

GLENN: Okay. Thank you.

PAT: You didn't think that one through. Did you?

GLENN: Yeah, I didn't think that one through. I forgot who we were talking to. Anyway, we never say things like that, by the way. Golly, gee, darn it. I'm sorry.

But we were pushed back because of the collusion with very powerful people like Edison and very powerful politicians. Do you see us -- how do you see what's coming our way?

AJIT: Boy, that's a great question.

I think the first thing is the empowerment of the citizen that the internet allows. It used to be that to do virtually anything, you had to work through some sort of gatekeeper. If you were buying a car, you had to go through a dealer. If you were wanting to stay in a place, you have to go book a room with a hotel.

And now, because of technology, you can do anything, basically by yourself. And that's an incredible amount of empowerment. But, on the other hand, we always have to guard against this instinct of essentially crony capitalism, the phenomenon that you talked about. And to that extent, I think what people need to understand is that heavy-handed regulation is actually the friend of bigger businesses and for those who believe in big government. Because -- the big companies are always going to have the armies of lawyers and accountants to comply with these regulations, to persuade government to do favors on this or that issue. It's the smaller companies that are disproportionately affected. And the second thing is that it's very seductive for a lot of people to think, "Well, the market just leaves consumers at the mercy of these wild and unpredictable forces." When in reality, the market has delivered more value for consumers than preemptive government regulation ever could.

I mean, the fact that we have billions of people who are emerging from poverty now is the result of free market policies. It's not because the governments of these various countries have suddenly decided to bestow largesse upon them. And so it's a case that we consistently have to make that crony capitalism and big government regulation, those are not the friends of the average consumer.

GLENN: So we have -- we have a situation now of fake news. And it's been around forever. But it's at epidemic proportions because the average person has access to everybody. And the average person, you know, unfortunately doesn't think things through and really read everything. They see a headline, they click on it, and they share it.

We have some really nefarious people, some of them in Russia, that are using our own technology against us, using our own freedoms against us. We have the press -- I told you about Ted Koppel. But we also have the president coming out and saying, you know, you're fake news. And maybe we should be able to sue you more.

Does the FCC have a role in the First Amendment in saying to all sides, "Knock it off. The freedom of the press is the freedom of the press, no matter if it's a printing press or the internet. Knock it off?"

AJIT: Well, I've consistently said -- and this goes back to my time as a commissioner up to five years ago, that one of the distinctive features of America is the fact that we have a First Amendment. It's unique in human history for the government to establish in its very founding papers the notion that anybody in this country has the ability to speak, anybody has the ability to write, anybody has the ability to worship as he or she sees fit.

And that's something that requires not just the cold parchment of the Constitution, but it requires a culture that admires that -- those freedoms. And so I've consistently spoken about -- about the need to preserve that culture of freedom for speech and free press. Because it's a slippery slope. Once you lose it, it's very hard to reclaim it.

GLENN: You have a 50 -- what is it? A 50 or 60 percent of so-called conservatives saying that there's a limit to freedom of the press. Is there?

AJIT: Well, the Constitution speaks for itself. And so long as I have the privilege of occupying this office, I'll keep defending that core constitutional freedom. It's one of the things that I think makes America a very unique place across time and across the world.

GLENN: So I think with that answer, I just have to end where I started: How the hell did you get past Barack Obama?

AJIT: That's a good question. I'm not sure how I slipped through the cracks.

GLENN: I don't know either.

AJIT: But maybe it's the -- sort of like the Forrest Gump of the Washington scene. Just kept gamboling on, and here I am.


GLENN: Yeah. Okay. Ajit Pai, thank you so much for talking to us.

PAT: Great.

GLENN: And keep up the good work.

AJIT: Thank you, sir. Thanks for having me on.

GLENN: You bet. Buh-bye.

PAT: And thanks for the shout-out to Areopagitica. That's -- I think that's a first.

JEFFY: Right.

GLENN: Oh, how many times have we talked about -- off the air --

PAT: All the time. All the time.

STU: Talked about all the time.

GLENN: Okay. You know what I love --

PAT: Talked about all the time. Milton's Areopagitica.

JEFFY: Right!


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