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Sen. Cruz: Chairman Pai’s Leadership Has Freed the Internet From Bureaucratic Regulations and Provided Hope for Successful U.S. 5G Broadband Expansion

Questions FCC Chairman and Commissioners on net neutrality and the United States’ ability to maintain its status as the global leader in telecommunications

August 17, 2018

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202-228-7561

WASHINGTON, D.C. –Yesterday, U.S. Sen. Ted Cruz (R-Texas), member of the U.S. Senate Committee on Commerce, Science, and Transportation participated in a hearing entitled, “Oversight of the Federal Communications Commission.” There, he questioned Federal Communications Commission (FCC) Chairman Ajit Pai, along with FCC Commissioners Michael O’Rielly, Brendan Carr, and Jessica Rosenworcel on net neutrality, how the U.S. can compete with China in the global race to deploy 5G, and why nationalizing 5G would be a mistake.

Sen. Cruz has been a strong leader in the efforts to repeal net neutrality, calling for the unconstitutional bureaucratic regulations to be removed in order to keep a ‘free and open internet.’ He has also publicly fought efforts to reinstate the Obama administration’s failed net neutrality regulations. During yesterday’s hearing, Sen. Cruz expressed his gratitude and support for Chairman Pai’s leadership in repealing net neutrality regulations:

“Let me say, first of all, Chairman Pai, I wanted to thank you for your leadership. In particular, in stepping forward with the Commission and repealing the Obama FCC’s net neutrality rules. […] Indeed, we heard that the world was going to end when the net neutrality rules were repealed, notwithstanding the fact that they had been implemented only in 2015. So, for the entire history of the internet, the FCC had not declared the authority to regulate prices and terms of service on the internet, other than for the two years of that unlawful power grab. Nonetheless, with an abundance of misinformation, many people of good conscience were told that somehow eliminating regulation of the internet by the federal government would imperil their freedom. […] I am a big believer in keeping the internet free - keeping it free from taxation, keeping it free from regulation - allowing it to be an oasis of free speech and entrepreneurial freedom. And, I believe the decision that the FCC made to end that power grab by Washington was the right decision, was consistent with law.”

Watch Sen. Cruz’s full line of questioning here. Excerpts are below:

Sen. Cruz: Thank you, Mr. Chairman. Welcome to each of you. Thank you for being here. 

Let me say, first of all, Chairman Pai, I wanted to thank you for your leadership. In particular, in stepping forward with the Commission and repealing the Obama FCC’s net neutrality rules. That has been a topic of much discussion, including enormous hyperbole. Indeed, we heard that the world was going to end when the net neutrality rules were repealed, notwithstanding the fact that they had been implemented only in 2015. So, for the entire history of the internet, the FCC had not declared the authority to regulate prices and terms of service on the internet, other than for the two years of that unlawful power grab. Nonetheless, with an abundance of misinformation, many people of good conscience were told that somehow eliminating regulation of the internet by the federal government would imperil their freedom. 

Let me ask you, now that those rules have been repealed, has the internet ceased to function?

Chairman Pai: It has not, Senator. 

Sen. Cruz: And, the parade of horribles that people were told - have those parade of horribles, is there any evidence that any of them have come to pass? 

Chairman Pai: They have not. And moreover, even if one, or two, or many were, we now have in place an FCC transparency rule and FTC enforcement to make sure that it would be addressed quickly. 

Sen. Cruz: Well, I want to commend you for having the courage to do that. […] I am a big believer in keeping the internet free - keeping it free from taxation, keeping it free from regulation - allowing it to be an oasis of free speech and entrepreneurial freedom. And, I believe the decision that the FCC made to end that power grab by Washington was the right decision, was consistent with law.

Let’s shift to a different topic, which is 5G. Earlier this month Deloitte released a report entitled, ‘5G: The chance to lead for a decade.’ The report highlights that quote: ‘since 2015, China has outspent the U.S. by approximately $24 billion in wireless communications infrastructure, and has built 350,000 new sites while the U.S. has built fewer than 30,000. Looking forward, China’s five-year economic plan specifies $400 billion in 5G related investment. Consequently, China and other countries may be creating a 5G tsunami, making it near impossible to catch up.’ So that was Deloitte’s conclusion.

Do you share that assessment that it may be near impossible to catch up with China on 5G?

Chairman Pai: Appreciate the question Senator. I believe the U.S. is leading on 5G with respect to spectrum. We’re holding major auctions at the end of this year, and in the second half of next year. With respect to infrastructure, over short-sighted opposition we’ve been modernizing our rules to make sure that any small cell deployment doesn’t have to jump through federal, state, local and in some cases tribal hoops. That is an effort that is absolutely necessary. You will never get 5G infrastructure at scale if you have these multiple levels of regulatory review, which China for obvious reasons doesn’t observe. So, I think it’s critical for us to modernize our rules to assert U.S. leadership in 5G.

Sen. Cruz: So, what are the barriers, regulatory or otherwise, that have been standing in the way of deployment of 5G infrastructure? 

Chairman Pai: Senator, I think that by far the biggest one has been our infrastructure policies. These policies were developed for another age, another kind of infrastructure. They were designed for big cell towers, not multiplicity of small cells. In addition, as I said, we’ve had a history in this country for a variety of reasons for multiple levels of regulatory review. The most powerful thing this Congress could do frankly, with respect to the internet, is to adhere to the five-word phrase that Chairman Thune used in his opening remarks: ‘the borderless nature of internet access.’ The FCC has long found that the internet is inherently an inter-state service. It follows from that then that the FCC should be able to establish a consistent uniform system of regulation. So long as we have multiple bites of the regulatory apple and the regulatory uncertainty that flows from that, we will always be behind those countries that have established a national policy on 5G. 

Sen. Cruz: Last question, as you’re aware a report came out from the National Security Council suggesting the possibility of nationalizing 5G, and indeed, there have been others who have expressed possible support for that. Personally, I think that’s a terrible idea. And, as you know I have introduced legislation, bipartisan legislation, with Sen. Cortez-Masto, to make clear that the federal government cannot nationalize 5G absent explicit congressional authorization.

The question I wanted to ask Chairman Pai, but actually to each of the four of you, do any of you disagree that nationalizing 5G would be a mistake? 

Chairman Pai: I do not, Senator. I have consistently said that I believe the market, not government, is best positioned to drive innovation and investment in this area.

Honorable Michael C. O’Rielly: No, I support your legislation. 

Honorable Brendan Carr: Nationalizing networks is not the path for we won the race to 4G based on the free market, and that’s the path to 5G as well. 

Honorable Jessica Rosenworcel: I agree with my colleagues on this. 

Sen. Cruz: Very good. Thank you very much, Mr. Chairman. 

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