Pai Plans To Ask Congress To Defund FCC Net Neutrality Order

FCC Commissioner Ajit Pai intends to ask Congress to strip the agency of money to execute its net neutrality order, he said in written testimony for a House Appropriations subcommittee scheduled for Tuesday. “Congress should forbid the Commission from using any appropriated funds to implement or enforce the plan the FCC just adopted to regulate the Internet,” Pai plans to testify. “Not only is this plan bad policy; absent outside intervention, the Commission will expend substantial resources implementing and enforcing regulations that are wasteful, unnecessary, and affirmatively detrimental to the American public.” Pai, one of two GOP commissioners, is “unable to support” the FCC’s FY 2016 budget request, he will say.

The FCC requested $388 million for FY 2016, up more than $50 million from what it received in FY 2015. The budget has been frozen for years, and House Communications Subcommittee Chairman Greg Walden, R-Ore., circulated draft FCC reauthorization text that would freeze the budget at $339.8 million for the next four years -- a “squeeze” that subcommittee Democrats slammed last week (see 1503190048). Senate Commerce Committee Chairman John Thune, R-S.D., hasn't unveiled a draft of his own and told us he sees the House version as a starting point. The FCC hasn't been reauthorized since 1990, a process that the Benton Foundation described at length in a recent blog post.

“All of Commissioner Pai's instincts on this important topic have been wrong, on the law, the policy, and the procedure too,” Free Press Policy Director Matt Wood told us, unsure of the precedent in Pai’s call for defunding the net neutrality order. “I guess he may as well go for the grand slam and call for defunding his own agency, even as it goes about finally returning to enforce the law in Title II and to protect the status quo Open Internet access we've always had.”

The FCC declined to comment on Pai's call for defunding the net neutrality order.

Pai plans to testify about the agency budget Tuesday alongside Chairman Tom Wheeler before the House Appropriations Financial Services Subcommittee at 11 a.m. in 2359 Rayburn. In his prepared testimony Pai tells Congress he wasn't asked to participate in the development of the budget request. Testimony for Wheeler wasn't available at our deadline. Wheeler and FCC Managing Director Jon Wilkins have defended the budget request. The FCC has emphasized big-ticket expenses ahead, such as an IT overhaul, enforcement and the need to restack or move FCC headquarters. Wheeler and Pai will testify again Wednesday at a House Judiciary Committee hearing on net neutrality.

Financial Services Subcommittee ranking member Jose Serrano, D-N.Y., told us in January he could see net neutrality becoming wrapped up in the appropriations process and pledged to fight GOP policy riders attacking any agency rules (see 1501090038). Serrano backs Communications Act Title II reclassification of broadband, which the FCC’s order did. Financial Services Chairman Ander Crenshaw, R-Fla., has opposed Title II reclassification.

Pai intends to outline several problems with the FCC budget request. Like Republicans in the Senate and House, Pai zeroed in on the agency’s request to transfer $25 million from the USF to fund FCC universal service activities. “Put simply, this is a stealth tax increase on the American people,” Pai plans to say. “The money that goes into the USF comes out of the pockets of consumers when they pay their telephone bills each month." The money for restacking or moving FCC headquarters should come from a “specific budget authority for this purpose” from Congress rather than be part of the FCC budget request, his prepared remarks also say.

The budget request “is dramatically higher than it has been at watershed moments in the agency’s history,” Pai's testimony says. “At a time when domestic discretionary spending is generally scheduled to remain flat under the current budget caps, I do not believe that this request is fiscally responsible. And at a time when so many Americans in this country are struggling to make ends meet in this stagnant economy, federal agencies should be looking for ways to tighten their belts.”

In his call for Congress to defund the FCC’s net neutrality order, Pai claims the order will eat away at “substantial” resources for the agency. He specifically attacked the FCC order’s Internet conduct standard, the advisory opinion process for the Enforcement Bureau and the ombudsman appointment process. “All of this additional spending to regulate the Internet is not only wasteful, it is counterproductive,” Pai will say. “The Commission’s decision last month to apply Title II to the Internet overturned a 20-year bipartisan consensus in favor of a free and open Internet.”