'A solution that won't work to a problem that simply doesn't exist': Maverick FCC Commissioner Ajit Pai on why net neutrality and government attempts to regulate the Internet are all wrong.

• Author: Gillespie, Nick
• Position: Interview

Things were tense at the end of February, as the Federal Communications Commission (FCC) prepared to vote on a proposal that would revamp the way Washington regulates the Internet. The 332-page document put forth by Chairman Tom Wheeler aimed to shift the classification of broadband Internet service from a Tide I information service to a more heavily regulated Title II telecommunications service. Wheeler had made general information about the outlines of an earlier version of the proposal public, but, as is common at the FCC, the full text had not been released.

As the deadline neared, outspoken FCC commissioner Ajit Pai took to the airwaves he regulates (and the social media sites he doesn't), requesting that the commission's vote be delayed and the document released to the public: "The future of the entire Internet [is] at stake," Pai declared in conjunction with his fellow Republican commissioner Mike O'Rielly. But it was to no avail: The FCC ruled 3-2 to regulate the Internet.

Pai, educated at Harvard and the University of Chicago, has long been an opponent of net neutrality regulation and other measures to increase the power of the government over the Internet. The 42-year-old son of Indian immigrants spoke with Reason TV's Nick Gillespie just days before the controversial vote. For video of the interview, go to reason.com.

reason: Everyone says they want a free and open Internet. What are the points of agreement and then where does it get fuzzy?

Ajit Pai: I think [former FCC Chairman Michael] Powell put it best when he said in 2004 that there were four basic Internet freedoms that he thought everyone should agree with: the freedom to access lawful content of one's choice, the freedom to access applications that don't harm the network, the freedom to attach devices to the network, and the freedom to get information about your service plan.

Everybody, or virtually everybody, agrees on that. I certainly do. The question is how do we operationalize that? In my view, the federal government is a pretty poor arbiter of what is reasonable and what is not, and it's exceptionally poor when it comes to having a track record of promoting innovation and investment in broadband networks. That's something the private sector has done a remarkable job of on its own. reason: What are the instances that net neutrality proponents can point to where Internet Service Providers (ISPs) or other network operators have actually violated those open network principles?

Pai: There are scattered examples that people often cite: an ISP that nobody's ever heard of called Madison River almost a decade ago. MetroPCS, an upstart competitor of course, basically had no market power to speak of compared to the other carriers. [The company] wanted to make a splash in the marketplace, so it offered its consumers virtually unlimited data plans for $40. You could stream YouTube for example without it counting against your data cap, all for $40.

reason: But basically you could only stream YouTube videos, right? The rest of the Web, you really couldn't get on it?

Pai: Exactly. So critics called it a net neutrality violation, called it a "walled garden," which was bad for consumers. It's telling that they didn't go after one of the major incumbents, which now they complain about vociferously. They went after an upstart competitor.

reason: MetroPCS was saying, "We're going to give you less for less, but if you want it, you can have it."

Pai: [For net neutrality proponents,] you either get to eat all you can eat at a restaurant, or you don't get to eat at all.

reason: So that's the idea of net neutrality?

Pai: Essentially.

reason: So what do you think are the main drivers behind net neutrality? From my perspective, when I look at things from a kind of public choice economics idea, what I tend to see are companies like Netflix, Amazon, to a certain degree Google, eBay, other players who are very big and have done very well with the way that the Internet works now, and they want to freeze everything in place. This, to me, seems a lot like the robber barons when railroads were starting to be regulated who were like, "Great, let's regulate things and fix our market positions." Is that wrong to think of that in those terms?

Pai: I certainly think there are particular companies that might see a strategic advantage in having the FCC inject itself for the first time into the nuts and bolts of the Internet's operation. For example, regulating the rates and terms on which ISPs and edge providers [such as YouTube, Amazon, and iTunes] have to interconnect. That's something that, if you're not getting what you think is a good deal through private commercial agreements, might be helpful to have an FCC backstop.

There are a lot of other people, smaller entrepreneurs and innovators that we hear from, that are worried that ISPs might end up acting as gatekeepers and keeping their content off...