Column: FCC chairman jokes about being a Verizon shill, days before forcing an FCC vote that would be a boon for Verizon

Federal Communications Commission Chairman Ajit Pai probably thought he was adhering to the stand-up comedian’s precept to “know the room” when he launched himself on a jokey, self-deprecating speech last week, complete with a videotaped comedy skit.

After all, he was appearing as the featured speaker at the annual dinner of the Federal Communications Bar Assn. That’s a group of which he was once a member, as an in-house Washington attorney for the big telecommunications firm Verizon.

Therefore, he could count on his audience appreciating his inside jokes about prominent members of the telecom bar and the issues they’ve brought to the FCC on behalf of their corporate clients.

Leaving aside that many of his quips fell flat, especially a giocoso reference to President Trump’s designation of Jerusalem as the capital of Israel that elicited groans and at least one exclamation of profane disgust audible on the tape, Pai may not have counted on his speech getting beamed to a much larger audience. But one of his listeners recorded his entire act on a smartphone, and leaked it to Gizmodo.

That has allowed the general public to ponder whether it’s appropriate for a sitting FCC chairman to make light of controversial regulatory issues in front of a crowd of people clearly favoring one side on those issues. The telecom attorneys in the audience generally work for companies that will benefit from Pai’s intention to roll back regulations on network neutrality, for example.

They include companies such as Verizon, Pai’s former employer. (He joined the FCC in 2007, became a commissioner in 2012 and was named chairman by President Trump this year.)

As it happens, Pai has scheduled a vote for Thursday on his proposal to roll back net neutrality protections imposed by the FCC in 2015—a rollback that would give Verizon and other such telecom firms enormous power over content aimed at internet subscribers in their homes.

Net neutrality is the principle that an internet service provider—the firm that carries internet data the last mile into your home or business—can’t favor some content providers’ data over others’. All video streams, for instance, are supposed to be brought at the same speed and quality into your home, whether the source is Netflix, Joe’s video, or the ISP’s own service. Pai aims to scrap the rule, and let ISPs make their own deals with content providers, regardless of their effect on consumers.

Not only the policy but the haste with which Pai is pushing it through has come under attack. “Where’s the fire?” asked Tom Wheeler, Pai’s predecessor and the architect of the 2015 policy, this week. Wheeler observed that the FCC’s authority to cede regulation of network neutrality rules to the Federal Trade Commission, as Pai plans, is uncertain.

“I remember the days when Chairman Pai was a commissioner who claimed to be a champion of prudence and process,” Wheeler wrote. “Back then, of course, he was in the minority.” With Republicans in control of the FCC and Congress, “process and prudence...have given away to ideology.”

It’s especially worthwhile to ponder that videotaped sketch at the dinner, which featured Pai and an executive Gizmodo identifies as Verizon lawyer Kathleen Grillo in a (supposedly) fictional meeting at Verizon in 2003, when Pai was still on the Verizon staff.

“As you know,” Grillo says, “the FCC is captured by industry, but we think it is not captured enough…. We want to brainwash and groom a Verizon puppet to install as FCC chairman. Think ‘Manchurian Candidate.’”

“Awesome,” says Pai.

“So you’ll do it?”

“Absolutely.”

It’s not unusual for top federal officials to poke fun at themselves at public events— the annual White House Correspondents Assn. dinner, at which the president and other politicians absorb good-humored barbs and are expected to give as good as they get, is a perfect example.

But it’s a bit different to hear a top regulator cozying up to the very people he’s supposed to be regulating—especially since Pai’s policies already have been judged to unduly benefit big incumbent internet service providers like Verizon.

In his talk, Pai made light of the net neutrality debate, but the issue is important to the free flow of ideas and entertainment and information content over the internet. The issue also involves billions of dollars in potential profits for Verizon and other firms positioned to act as gatekeepers of internet content, possibly favoring their own content at the expense of outsiders’.

Pai has made no secret of the fact that his plan would facilitate more of that, though he asserts it would leave plenty of room for regulators to lower the boom on abusers. But what especially concerns advocates of net neutrality regulation is his plan for the FCC to turn such regulation over to the FTC.

A draft memorandum of understanding between the two agencies announced Monday by Pai and the GOP-controlled FTC failed to quell those concerns. The memo says the FTC will have the responsibility to “investigate and take enforcement action as appropriate against Internet service providers for unfair, deceptive, or otherwise unlawful acts or practices.”

But as Wheeler noted, the FTC’s jurisdiction is still under consideration in federal court, in a case involving AT&T wireless. If the court rules that the FTC has no jurisdiction, Pai’s proposal could “exempt AT&T, Comcast, Verizon and others from both FCC oversight and FTC oversight.”

FCC Commissioner Mignon Clyburn, a Democrat, detected the same flaw, calling the memo “a confusing, lackluster, reactionary afterthought: an attempt to paper over weaknesses in the chairman’s draft proposal repealing the FCC’s 2015 net neutrality rules.” The FCC already has a stronger arrangement with the FTC in place, she pointed out—Pai’s efforts would simply weaken it.

A similar point was raised by 41 consumer advocacy organizations and agencies in a Dec. 4 letter to Pai. They argued that his haste in placing the rollback of network neutrality before the commission even before the court ruled in the AT&T case “raises the question as to whether the proposal takes even its own fig leaf of consumer protection seriously.”

Pai dismissed the letter as a “desperate” attempt “to defeat Chairman Pai’s plan to restore internet freedom.” (That’s his description of a plan that would cede immense commercial powers to a handful of big corporations.)

What often gets lost in the debate over network neutrality is the genesis of the policy that Pai is proposing to overturn. The FCC “reclassified” the internet as a telecommunications rather than an informational service in 2015 because two federal courts had ruled that would be the only way to have the jurisdiction it needed to ensure that ISPs didn’t favor some traffic, including their own, over others’.

Who brought the lawsuits, on which the judges ruled? Big ISPs, one of which was, yes, Verizon.

Laugh now if you think Pai’s connections to that company are a big joke.

Keep up to date with Michael Hiltzik. Follow @hiltzikm on Twitter, see his Facebook page, or email [email protected].

Return to Michael Hiltzik’s blog.