Today by your cable or satellite provider. Going forward, we cannot stick with regulations from the Great Depression that were meant to micromanage ma bell. Instead, we need rules that focus on growth and infrastructure investment, rules that expand highspeed Internet Access everywhere, rules that give americans more online choice, faster speeds and more innovation. In short, digital opportunity. And we are going to deliver. Earlier today i shared with my fellow commissioners a proposal to reverse the mistake of title ii and to return to the light touch Regulatory Framework thats served our nation so well during the clinton administration, the Bush Administration and the first six years of the obama administration. Host and that was fcc chair ajit pai from earlier this week. Our discussion on the communicators is about his Net Neutrality proposal. Joining us, Jeffrey Eisenach of the American Enterprise institute and an adviser to the Trump Transition Team on telecommunications policy, and chris lewis, Vice President of Public Knowledge, the consumer group. Mr. Lewis, whats your take on what the chairman proposed earlier this week . Guest well, we, were concerned. We think that the rules that we got in 2015, the Net Neutrality rules are working. Theyre wildly popular. Overwhelming majority of americans want to have clear rules of the road that protect an open internet. And so were concerned that hes gone down a path to review and potentially even repeal some or all of those rules. Host why did you think those rules were necessary . And i want to read a little bit from tom wheelers oped in the washington post, the former chair. For as long as the internet has existed, it has been grounded on the principle of Net Neutrality. Guest i think thats true. If you look at the history of the internet from the 90s clinton era when we had dialup internet on through the 2000s when the fcc really started to look at the concept of Net Neutrality, theres been broad support for the idea that we need to protect an open internet or the concept of Net Neutrality k. And the real debate in washington away from the folks who seem to overwhelmingly support it is how do we accomplish that. And i believe chairman wheelers rules are rooted in probably the strongest legal grounding in order to have those sorts of protections. And it was validated by the Court Decision last year upholding those rules. Host Jeff Eisenach. Guest well, i think your question is exactly the right question, why did we need the rules. From the internets insense until the rules were inception until the rules were passed, the internet was free and open. There wasnt a problem. As chairman pai said, there was no dystopian controlled internet with isps or anything else interfering with peoples ability to post content or use applications or look at the content of their choice. What you had was this hypothetical threat which was made into a bogeyman which, obviously, motivated a lot of people. But what you didnt have is any credible evidence that there was an actual problem. The marketplace was working. And, you know, when you have regulation, you have a balance. There are benefits and kansass of regulation. The costs of regulation were seeing in reduced levels of investment, were seeing and you also see the cost of regulation in the form that once you give a Government Agency the power to transfer wealth from one group of companies to another group of companies, from one Interest Group to another Interest Group, then you have people engaged in lobbying over those issues, and this is maybe the most heavily lobbied issue ever in telecommunications. And thats not healthy either. That empowers washington, that empowers lawyers, that empowers lobbyists, it doesnt empower people. Host but can we trust the isps to be our gatekeepers and to play fair . Guest well, you know, i think id come back to the fact of of the matter. There simply is no evidence that isps have interpeered with peoples interfered with peoples abilities to use the content ever before. And theres one example that, you know, you pull out of a little Telephone Company in North Carolina 15 years ago that was settled out by the fcc after about six weeks in a, you know, very painless process that does not, you know, did not require declaring the internet a public utility and summiting it subjecting it to price regulation. Which, again, brings all these costs associated with it. Guest just to help out with the history, we have more than one example of isps and Broadband Companies wanting their own content, the create fast lanes and slow lanes or to degrade traffic. Throughout the history of the internet really from when the concept of Net Neutrality was kind of introduced around 20002005 when the republican fcc set principles around Net Neutrality host the powell doctrine. Guest the powell doctrine, that was attempted to be enforced by the republican fcc to the 2015 rules theres always been an effort to enforce these rules. The question is, what is the strongest legal footing to do so, and the courts have upheld the 2015 rules as strong legally, but there have been multiple instant stances instances whether its facetime being held back from some customers by at t, whether its the one 15 years ago jeff was referring to or the recent concerns that have been raised around comcast, at t and others preferring the content they own over other content, this all follows under the umbrella of potential violations. Guest well, so lets walk through those one at a time. Lets talk first about the facetime which i know others have tried to make a lot of. What we had there was at t making a business decision that if people were using facetime on their 3g cell phones this was ten years ago, eight years ago that that would cause congestion for other users on the at t system. They didnt have a video app on the at t phone at that point. They were doing what might be called but we dont know under the current rules because a they create so much regulatory uncertainty, but what most people would see as Reasonable Network Management. The, what were the other examples you gave, facebook . Guest there was comcast bit torn. Guest the theory, so bit torn, lets remember, is a pirate site which steals intellectual property. But thats [inaudible] guest but, again, what comcast was doing was throttling bit torn because they were eating up the bandwidth being used by a shared cable mode dem system of people many or modem system of poem in a neighborhood. Youre in a neighborhood, youre trying to download, just visit web sites and you cant do so because your neighbor is you loading thousands uploading thousands of songs and movies from the internet. The notion that comcast was throttling bit torn because comcast i saw them as a competitive threat to its video business is ludicrous. Nobody believes that. So as you go through these examples, what you have is you have Companies Engaging in Reasonable Network Management in an effort to make a better ecosystem for all of their customers. And with incentives to do so because its a competitive environment. So the, you know, i dont think any of those examples hold up. And when you look at the fccs order from 2015, they didnt assert that irk sps have market power. They carefully stayed away from that. And judge williams in his dissent called them out and said you cant have it both ways. For time immemorial, the declaration of something as public utility and the imposition of price regulation has always come with some kind of demonstration of monopoly power. You havent even tried to make that case because i dont think it can be credibly made. Guest i think the emphasis on monopolies is important. We have seen increasing consolidation in the Broader Media marketplace. We certainly see a lot of mergers and combination of isps and Broadband Companies buying content companies, buying each other, cable Companies Buying each other, Cable Companies are some of the biggesting broadband providers out there. And is what consumers definitely see is a marketplace where they have very few choices for access to the internet. And so to talk about monopolies in what your average consumer sees is actually fairly accurate on the local level. These are acting like local monopolies. And so, you know, chairman pai, you know, certainly has a legal case to make about what has changed in the two years that weve had internet rules, and hes going to have to make that case in order to pass court muster or to roll back these rules. But hes also got a political problem because consumers and average americans have already gotten upset over the fact that they have very few choices when it comes to privacy. Those rules have have been rolld back by congress. Now their choices may be taken away further by a repeal of Net Neutrality rules. Is when it guest how does im sorry to interrupt, but how does, how does Net Neutrality, how do Net Neutrality rules promote choice . Guest Net Neutrality rules promote choice by allowing the market to work in a way where small and big competitors can bring their web sites and their services online. When you allow an irk sp to prefer isp to prefer their own content over a smaller competitors content, youre going to reduce consumers choices. Guest but, well, first of all, theres no ed of that, but lets just talk about what i thought you were talking about the choice among isps. Guest no, im talking about both markets here, and this is why chairman wheeler, when he created the rules, talked about the performance of the investment of services go hand in hand guest so you see a shortage of choice in the market for online content. Guest welling right now, no, because we have Net Neutrality protections. Guest well, but there have been no prosecutions under the Net Neutrality rules, and there was no evidence of Net Neutrality infractions prior. This is no evidence that when tmobile, Music Services in general that that has any impact on the choice of Music Services, you have spotify be, amazon, google play, every Radio Station simulcasting, pandora, on and on and on. Theres no shortage there, and that shortage theres no evidence that zero rating has had any impact. But you all would take away free data, i think. Guest so some of my favorite companies. Im a spotify subscriber, for example. Those companies and especially ones that arent as large, tech startups, new online services, they need an ability to compete. You take away these rules, and remember right now we have these protections. You know, there have been concerns raised that the fcc would be looking into if they hadnt been in court over the rules in the first year and now potentially repealed by the paii fcc. But without those protections, most people predict that will have a harmful effect guest well, most people dont predict that. And, you know, one thing i think is important to just, an important point to make here is you can make a political case for Net Neutrality because were all in favor of a free and open internet. Its impossible to make an economic case for Net Neutrality which is why the chief economist of the federal Communications Commission at the time said the rulemaking was an economicfree zone because the chairman and the two democratic commissioners and the other staffs, well, they were instructed to simply ignore the economic arguments. And, in fact, the order itself ignored all of the economic evidence and was criticized for that by judge williams in his dissent. Guest well, there are two important voices that disagree with that. Number one, the department of justice. In the mergers that weve seen in the last few years, theyve made it very clear that isps have an incentive to prefer their own content over others and that they have an advantage by being the access to the internet. And the other folks that you need to believe are the isps themselves. Verizon, in their lawsuit in oral arguments against the fcc on the 2010 rules made it very clear that but for Net Neutrality protections, they would be entertaining certain business arrangements that would allow them to be preferring their content over others. Host arent people already paying different prices for different speeds . Guest they are paying different prices for different speeds, but when we talk about preferring content over others, its not just about speed. It can with speed it can be speed, it can also just be general quality of service. When certain, when you have a choice for speed for consumers, you also have it, you have the consumers choosing what level of service they want provided to them. When you have Internet Service providers dictating by setting zero rating or using data caps arbitrary hi or other business meds that may come along in the future, then you have the isp selecting which companies can sucking seed or not succeed online, and were really interested in having that consumer choice. Weve never really complained about having speed tiers or data tiers as long as theyre not arbitrary caps. Host jeff ice knack, as the isps move into content providing as well, doesnt this change the paradigm of the argument . Guest well, it doesnt change the paradigm of the argument. The question never in the internet space is whether there might be a potential or never a potential for issues of discrimination. So going all the way back to the microsoft case, microsoft saw netscape as a potential threat. Microsoft asked with the purpose and effect, the court found, of raising netscapes costs and making it difficult for them to compete, and the courts were successful. And others who prosecuted and the Justice Department went after microsoft for that conduct. If that conduct were to happen in the isp space, those remedies are available. That doesnt mean that you should prevent a second tier, a nondominant company like tmobile. Nobody thinks tmobile is tmobile a monopolist . Would you say tmobiles a monopolist . Guest no, i wouldnt guest you wouldnt say that. And, in fact, if you look around the world at zero rating programs, zero rating programs almost always involve the competitive firms as opposed to the incumbent firms. So what zero rating is, is giving away a promotional benefit in order to get people to subscribe to your service. Its a tool that companies, as chairman pai said when he ended that investigation of the fcc on february 3rd, its a tool for competition, not against competition. And thats where its useful to have some Economic Analysis to come into play here, because economists do you have a way of do have a way of looking at competitive effects. Ive never said that you could never have a situation where anybody with market power, cub google, could be netflix, could be spotify, could be amazon, could be verizon or comcast. All of those firms have market power. Any of them could seek to use it to disadvantage their rivals. We have a mechanism for policing that which still i allows entrepreneurship and innovation and competition, rivalry to occur in the marketplace without the government putting the dead hand of the state on top of all that. Host chris lewis, i want to get your response to a little bit more from ajit pai. First, we are proposing a title i information service. That is light touch regulation drawn directly from the clinton administration. As i mentioned earlier, this title i classification was expressly upheld by the Supreme Court in 2005, and it is more consistent with the facts and with the law. Second, we are proposing to eliminate the socalled internet conduct standard. This 015 rule 2015 rule gives the fcc a roving mandate to micromanage the Business Practices of internet companies. Host chris lewis. Guest youd like me to talk about title i, title ii . Host yes. Respond to what chairman pai had to say. Guest okay. Well, he, he cited the 2005 Court Decision upholding the determination by the fcc that broadband should be a title i service. Whats important to note about that is not only did the court in 2005 uphold the fccs authority or to make that decision under a precedent thats commonly referred to as chevron deference deferring to the Expert Agency im oversimplify being it, but well go with that for now but they also upheld that same right for the fcc with the 2015 rules. And so the challenge of the 2015 rules in court was to prove that not only dud they have chevron did they have chevron deference as they did in 2005, but the wheeler fcc had to talk about what had changed in the marketplace. The market place for Broadband Access in 2005 looked very different than it does today. And they made that case, and it was upheld in court. And that was the justification for moving from title i to title ii. You know, all of that was hashed out by lawyers. I think the important thing the note is that, you know, average consumers see that they have ver