Trump's FCC Gives Big Telecom "Free Reign" With Vote for Major Handouts

FCC chair Ajit Pai claimed there was enough competition in the BDS marketplace, despite the commission itself finding that in most areas there is only one BDS provider. (Photo: Getty)

Trump's FCC Gives Big Telecom "Free Reign" With Vote for Major Handouts

'This is the price we pay for the outrageous influence of money in politics. The public interest suffers, and we are poorer—economically and civically—for it'

At its April open meeting on Thursday, the Federal Communications Commission (FCC) voted to give yet more handouts to the telecommunications industry, lifting a price cap on broadband services and reinstating a loophole that lets broadcasters monopolize airwaves.

The vote lifting the cap on Business Data Services (BDS) fees means that carriers like AT&T and Comcast will now be allowed to charge exorbitant rates on small businesses and community banks to connect to the internet. The other proceeding, to reinstate the "UHF [ultra high frequency] discount," will open the door to unprecedented levels of media consolidation.

The vote shows the dangers of money in politics and the influence of the FCC's new Republican chair, Ajit Pai, advocacy groups said Thursday.

"Once again, chairman Pai is putting his thumb on the scale to favor monopoly [internet service providers, or ISPs] over the interests of internet users and small businesses," said Jessica J. Gonzalez, deputy director and senior counsel at the open internet group Free Press.

Net neutrality foe Pai and commissioner Michael O'Rielly, also a Republican, argued that there was enough competition in the $45 billion BDS marketplace to justify deregulation, even though the FCC itself found that in most areas there is only one provider of BDS services.

"Instead of modernizing and strengthening regulations, promoting real broadband competition in the business and wholesale markets, and limiting the monopoly power of incumbents, this order lets them off the leash," Gonzalez said. "Pai claims the market is plenty competitive, but this order defines competition as current service by only one provider as long as another one somewhere nearby might hypothetically offer service one day. It should be obvious that potential competition is not the same as actual competition, and the last decade of waiting for it to emerge in sector prove that painful point."

"For small businesses trying to connect to the internet, the price of BDS can be the difference between a firm remaining in business or closing its doors--and Pai just gave BDS providers free reign to squeeze these businesses (and their customers) even tighter," Gonzalez said.

Pai and O'Rielly also voted over commissioner Mignon Clyburn's dissent to reinstate the obsolete UHF discount, removed in 2016, that essentially functions as a loophole allowing broadcast companies to exceed the FCC's limit on how much of a nationwide audience they can reach.

Clyburn said it was "abhorrent that the policy goal is deregulation at all costs."

The vote came amid reports that the conservative broadcast conglomerate Sinclair Broadcast Group was angling to buy several local stations owned by Tribune Media Co., Free Press noted.

"The FCC UHF vote unleashes more media consolidation, undermines viewpoint diversity, and further reduces opportunities for people of color to own broadcast stations," Gonzalez continued. "This decision brazenly favors [President Donald] Trump and Pai's big broadcaster friends at Sinclair, Fox, and other white-owned media conglomerates, to the detriment of broadcast owners of color."

"In the same order, Pai inexplicably suggests that the commission might even loosen further the generous 39 percent limit, despite the fact that this is bad public policy and explicitly outside of the FCC's jurisdiction," she said.

Former FCC commissioner Michael Copps, who now serves as special adviser to the advocacy group Common Cause, said Thursday, "This is the price we pay for the outrageous influence of money in politics. The public interest suffers, and we are poorer--economically and civically--for it."

Protesters briefly disrupted Thursday's meeting by singing Rick Astley's "Never Gonna Give You Up," before being escorted out by security--a reference to the "rickrolled" internet prank where users are sent links to videos that unexpectedly start playing the 1987 pop hit--as a message to Pai that they would fight the new rules.

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