What’s Common Between India and US

I know what I like as a consumer. But as a regulator, I don’t believe that it is my place to impose my preferences upon others. Everyone has different tastes, particularly in countries as diverse as the United States and India, said Federal Communications Commission (FCC) COMMISSIONER Ajit Pai, in his keynote address at FICCI Frames 2014 Excerpts of his speech

I have given many speeches during my time as a Commissioner at the U.S. Federal Communications Commission, or FCC. But this one is truly special to me. I was born and brought up in the United States, but my family’s roots are here in India. My mother grew up in Bangalore, and my father was raised in Hyderabad. In 1971, they came to the United States with just a radio and ten dollars in their pockets.

Now, forty-three years later, here I am, in the country of my forefathers, speaking to you as the first Indian-American to serve on the FCC. The credit for this goes to my parents, who, like many immigrants, sacrificed to give me opportunities not available to them as children. It goes to my grandparents, who instilled in my parents the value of hard work and the vision to dream big. And it represents one small aspect of an enduring link between India and the United States.

The theme of this year’s FICCI Frames is “Media and Entertainment: Transforming Lives.”

When it comes to content, I know what I like as a consumer. But as a regulator, Idon’t believe that it is my place to impose my preferences upon others. Everyone has different tastes, particularly in countries as diverse as the United States and India. So I firmly believe that the marketplace, not government, should sort out success from failure. The proper role of regulators, in my view, is to create a framework that fosters innovation and allows content to be broadly disseminated. And that means encouraging investment in the networks that connect those who create content to those who consume it.

The ubiquity of broadband has opened up huge opportunities in Internet video. These range from original, awardwinning programs featuring Hollywood movie stars to the less acclaimed, but still loved, uploaded home videos featuring our children and pets. Americans also now enjoy watching old episodes of broadcast and cable programs at their convenience over the Internet. Rather than owning companies or directing capital spending, the United States Government has sought to create a regulatory framework that gives companies the right incentives to make these investments. And this morning, I’d like to briefly highlight three successful strategies we have employed in this regard.

First, we have removed regulatory barriers to infrastructure investment. Second, we have created a free market for spectrum. And third, we have embraced free trade and foreign direct investment as a way to promote capital formation. Each has played an important role in fostering the innovation we see in America today. And I believe each serves as a valuable lesson for regulators going forward.

For the last twenty years, it has been the policy of the United States that the Internet be unfettered by government regulation. In other words, instead of micromanaging networks or the content that rides over those networks, we have focused on removing obstacles to infrastructure investment wherever we find them. That ultimately gives consumers easy access to the content they want, when and how they want it.

This was a conscious decision by regulators. At the beginning of this century, the United States faced a fundamental choice. Would we apply to the Internet the heavyhanded economic regulations designed for telephone monopolies? Or instead, would we adopt a modern approach that would give the private sector more flexibility to innovate? Thankfully, we chose the latter path.

The federal government isn’t the only one looking to make it easier for the private sector to build and improve networks. Back home, we have an expression: “Not in my backyard.” Its abbreviation is NIMBY, and it refers to a common attitude throughout the world. Everyone wants the benefits that come with progress, but few want to have something built right next to their house.

We are looking for ways to promote the physical infrastructure needed for broadband while still preserving environmental and cultural interests. One idea is to tailor government oversight to the size of the deployment.

Under this approach, what are called small cells—equipment for wireless networks that in some cases is the size of a Parle-G biscuit—wouldn’t need the same level of regulatory review as the construction of thousand-foot towers. Another idea is for government to streamline requirements for permits and provide cheaper and easier access to the rights-of-way, poles, and underground ducts necessary to build and upgrade wired networks.

So that’s our first strategy: infrastructure. Our second strategy is a free market for spectrum. Here, the United States made some key decisions that set the stage for explosive growth in mobile broadband. For one thing, we adopted what we call a flexible use policy.

Instead of prescribing how wireless carriers must use spectrum, we left those choices to the private sector, which is much more attuned to consumer demand. That has enabled networks to evolve with technology without the need for government sign-off at each step.

Second, the United States pioneered the use of competitive auctions to distribute spectrum licenses. This market mechanism has allowed us to put spectrum to its highest value use.

We continue to make more spectrum available for mobile broadband. Last month, we raised over $1.5 billion in our first spectrum auction since 2008, and we intend to hold another auction later this year. Then, in 2015, we aim to hold the world’s first broadcast incentive auction. This will be a two-sided auction where broadcast television stations will have the option of selling their spectrum and wireless carriers will have the opportunity to buy it.

I believe that our experience with auctions, which now spans about two decades, offers valuable insights to the rest of the world. For example, auctions are more successful when they are kept simple, transparent, and market-driven. That means setting clear rules in advance and sticking with them. That means avoiding onerous conditions on particular spectrum. That means giving everyone a fair opportunity to bid. These are the best ways to promote network construction, to raise money for the treasury, and to give consumers the benefits of innovative new services. In short, the government should establish a level playing field when it comes to auction rules rather than trying to micromanage who wins and who loses. Our last strategy has been to send a loud and clear message that we welcome investment in our telecommunications sector from around the globe. The FCC has found that “foreign investment has been . . . an important source of financing for U.S. telecommunications companies, fostering technical innovation, economic growth and job creation.” If foreign companies want to spend capital building and upgrading networks in the United States, we think that’s a good thing for American consumers. That’s why last year we approved a Japanese company’s purchase of over 70 percent of Sprint, our nation’s third-largest wireless carrier. And now, two of our four national wireless carriers are run by foreign corporations.

Historically, however, the United States has been more cautious when it comes to foreign investment in broadcast stations. In fact, it had been virtually impossible for foreign companies to own more than 25 percent of a U.S. broadcaster. That policy was outdated and harmful to our country’s television and radio broadcast industry. As a result, the FCC last November voted to change that approach.

I hope that other nations too will liberalize their own foreign investment policies. Restrictions on investment in communications ultimately limit cultural interaction. After all, one of the great things about the digital era is that there is “ek technology, ek duniya.” Technology means connection across countries and cultures. It transforms lives everywhere. So just as my kids’ YouTube videos link my family near and far, an open communications sector can maintain and deepen the relationship between two of the world’s largest and most diverse democracies, two allies, two friends.

In conclusion, I am deeply grateful for the invitation to speak this morning. And my commitment to a strong relationship between the United States and India isn’t just professional.

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15 Feb 2018 Issue

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