Pai Seeks Compromise, But Won’t Vote to Increase E-rate Budget

Before setting out his preferred plan for an E-rate revamp, Pai noted the partisan rancor that’s touched many items before the commission: The incentive auction, mobile spectrum holdings, media ownership and net neutrality have all come down to a straight party-line vote. “That’s not the way it should be,” Pai said. “It will never be possible for us to reach consensus on each and every issue. But we should always be willing to go the extra mile to forge a bipartisan agreement. It not only lends our decisions more legitimacy and increases public acceptance, it also improves our work product."

Pai noted the discord hasn’t always been Republican versus Democrat: “There have been complaints about process. There’s been anonymous griping to the press. There have been tense, late-night negotiations between parties with seemingly intractable differences on the issues, waiting to see who will blink first. And that’s just among the Democrats!"

Pai’s E-rate revamp would focus on streamlining and transparency, with fairer and more predictable allocation of E-rate funds, targeting next-generation technologies. A one-page initial application form would improve participation in the program, negate the need for outside consultants and reduce filing errors and subsequent appeals, he said. Simplification would also end the “red-tape funding gap” that leads the FCC to collect $400 million more yearly than is spent, as applicants make “bureaucratic missteps or miss deadlines so disbursements are blocked,” he said. Eliminating the $600 million spent annually on voice telephony services would let the agency spend its limited money more usefully, he said.

Pai said he wouldn’t support any reform plan that boosts E-rate’s budget, citing a USF contribution factor that’s increased from 9.5 to 16.6 percent since 2009. “I will not ask Americans to pay even more in their monthly phone bills,” he said. Pai’s position isn’t incongruous with his message of compromise, he told us later. “It’s compromise in the sense that everyone agrees that there should be additional opportunities for kids and for library patrons,” Pai said. “We might have different approaches, left to our own devices, about how to achieve those goals.” By making each dollar stronger and able to go further, “we can avoid the difficult questions about the overall budget, for example,” while directing funding to new technologies, said Pai.

"If the goal is to increase funding for next-generation technologies, the first priority, as the chairman himself said, should be to identify those deficiencies, direct resulting funding to broadband, and then see what the effects are of a new student-centered approach.” Pai and Chairman Tom Wheeler have “the same opinion on that,” Pai said. “That’s a good example of compromise, actually.” Pai also noted during his speech that he doesn’t expect his plan to be adopted “lock, stock and barrel.” Wheeler is expected to seek a vote on new E-rate rules at the July 11 FCC meeting (CD June 12 p1). Pai told us he thinks there’s definitely time to incorporate his suggestions into the new rules before they're circulated.

"Often, we have to set out our desires, our wishes, what we think the best proposal is,” while still keeping in mind the need for ultimate consensus, said former Commissioner Deborah Taylor Tate, who was in the audience. Pai’s principles of transparency and simplification are “required” to “get the money where it needs to be to make a difference,” Tate told us, noting she had pushed similar kinds of ideas when she was on the commission. “These aren’t partisan issues. They are about making sure that all of our children, no matter where they live, have the opportunities of the digital age.”