FCC chair defends reversal of Obama online rules — internet works despite 'fear mongering'

Key Points
  • The Trump administration's approach to a fair and open internet seeks a compromise between too much regulation and too little, FCC Chairman Ajit Pai says.
  • He says the agency wants a "transparency rule" on business practices to be backed up by government enforcement.
  • In December, the Republican-led FCC voted to eliminate the Obama-era Open Internet Order, better known as "net neutrality" rules.
FCC Chair Ajit Pai: We want US to lead 5G spectrum

The Trump administration's approach to a fair and open internet seeks a compromise between too much regulation and too little, FCC Chairman Ajit Pai told CNBC on Tuesday.

"Some people said that we should maintain the rules we had, the heavy-handed regulations that were based in the 1930s," Pai said in an interview from the Mobile World Congress gathering in Barcelona, Spain. "Others said we should wipe the slate clean, have no regulations whatsoever. We charted a middle course."

Making good on President Donald Trump's campaign promises to wipe out Obama-era regulations, the Republican-led Federal Communications Commission voted in December to eliminate the Open Internet Order, better known as "net neutrality" rules. The reversal of the 2015 order requiring internet service providers to treat all online traffic equally gives those companies more power to set pricing and prioritize different types of internet traffic.

Pai said on "Squawk Box" that he's looking to counter the "misinformation" that's produced this is the "'end of the internet as we know it'" type headlines.

"I think 2½ months later people are still using the internet. The internet still works," he said. "The online experience is going to continue to get better."

The FCC wants a "transparency rule" requiring internet service providers to disclose business and network management practices "backed up by Federal Trade Commission enforcement," Pai said. "That is the kind of careful approach that gave us the internet economy in the United States that's become the envy of the world."

Pai said he hopes Congress can come together to craft the new rules of the internet that protect consumers and competition while making sure regulations don't stifle innovation.

Critics argue the Trump administration's approach could lead internet service providers to block content, "throttle" down traffic, and charge for "fast lanes" to deliver certain types of content more quickly. Supporters of the FCC's move contend those concerns are unfounded and the marketplace will keep the industry in check.

"I think as time goes on some of the fearmongering is going to be proven to be baseless," Pai said. "Everyone, I think, wants an open internet and more infrastructure investment in the United States and around the world."

FCC's Ajit Pai: Regulators should focus on merits of M&A

In Tuesday's CNBC interview, Pai was also asked about Comcast's offer to pay $31 billion to buy Sky, outbidding a deal to take over the European pay-TV group by Rupert Murdoch's Twenty-First Century Fox.

Pai said it's too soon to comment directly on U.S.-based Comcast's offer for Sky, but added: "Regulators should evaluate every transaction on the merits; focus on the facts presented to you; determine whether or not the transaction is in the public interest. ... If not, are there conditions that can be applied ... [or] take appropriate action?"

Fox, which owns 39 percent of Britain's Sky, already has a deal for full ownership, but it has been delayed by regulatory concerns over Murdoch's influence in the U.K. Adding a complicating factor is Disney's separate $52 billion deal to buy Fox assets, including that Sky stake.

— Disclosure: Comcast, a major cable, internet service provider and media company, is the owner of NBCUniversal, parent of CNBC and