New FCC Chief Targets Net Neutrality

The U.S.’s new chief telecom regulator, FCC Chairman Ajit Pai, last week moved quickly to close down an ongoing investigation into zero-rating practices among U.S. operators AT&T, Verizon and T-Mobile, indicating that he would indeed pursue the deregulating agenda that observers predicted he would. Pai said that zero-rating of services such as video streaming was popular with consumers, in particular low-income consumers. He also stated that he disagrees with the policy, championed by former FCC chief Tom Wheeler, of deeming broadband a utility—which would provide a strong legal basis for net neutrality. While specific new regulations have not yet been announced, and while any changes to net neutrality will involve significant legal challenges, Pai has made it clear that he will be a strong advocate against the present conception of net neutrality in the U.S.

Ajit Pai, a former attorney for Verizon, seems to be fulfilling expectations (including our own in these pages recently) that he would apply the deregulating agenda espoused by his boss, President Donald Trump, to the U.S. telecom landscape. While consumer advocates are decrying his approach as favoring corporate interests over the interests of the people, Pai’s intentions will likely generate policies that will benefit mobile operators and others internet service providers. Zero-rating and other forms of special treatment that operators can give to content providers are sources of revenue—in terms of fees paid by content providers and in terms of subscriber retention and acquisition—and sources of brand strength for operators. If Pai is able to enact his intentions, the only thing operators will need to be keenly aware of is whether in fact they are in fact giving customers what they want, or whether the preferential treatment given to certain entities ends up alienating customers, current and potential.

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