Edward C. Baig

USA TODAY

BARCELONA—President Trump’s new Federal Communications Commission chairman is adamant on jettisoning Obama administration net neutrality regulations, especially as the industry moves toward next generation 5G networks.

“The torch of the FCC has been passed to a new generation,” Ajit Pai declared in remarks he made during the Mobile World Congress trade show in Barcelona.

Calling for a “light-touch approach to regulation,“ Pai pledged to pursue a broadband policy that is “practical, not ideological,” adding that the government will “embrace what works” and “dispense with what doesn’t.”

What he clearly thinks doesn’t work are the net neutrality regulations that aim to level the playing field for Internet traffic. Under the regulations, for example, Internet content providers cannot pay the companies that supply broadband so that their content gets preferential treatment through higher speed Internet lanes.

Content companies such as Netflix and Google were in favor of the FCC using its power to protect an open Internet. Companies such as AT&T and Comcast that offered the bandwidth balked at the regulation.

Last month, Democratic Sen. Al Franken of Minnesota, also pressed Pai to protect net neutrality, passed in 2015 by the FCC, then chaired by Tom Wheeler, a Democrat.

That appears unlikely, based on the comments made at MWC by Pai, named FCC chairman last month by President Trump. He likened the Obama policies to regulations crafted for a 1930s telecom monopoly, while praising what he says was a moderate bipartisan approach pursued by the Clinton Administration, notably that the Internet should be free from heavy-handed regulation.

“The policies of the Clinton administration, Bush administration and the first term of the Obama administration have produced a free and open Internet and strong incentives for private investment and broadband infrastructure," Pai said. "Two years later it is evident that the FCC made a mistake (which) injected tremendous uncertainty into the broadband market, and uncertainty is the enemy of growth.”

Pai's claims: lower broadband investment

Pai says that “after the FCC embraced utility-style regulation, the United States experienced the first-ever decline in broadband investment outside of a recession.”

That statement echoes what the carriers have said, though net neutrality proponents have countered it's been overblown.

Broadband providers' capital expenditures declined $1 billion to $76 billion in 2015, according to USTelecom's annual broadband investment research report, released in December 2016. USTelecom is a trade association that counts among its members AT&T and Verizon.

In a similar finding, AT&T has decreased its broadband capital expenditures by 18% and 16% in 2015 and 2016 — spending $17.3 billion and $17.8 billion in those years, respectively — compared to 2014 ($21.2 billion), the last full year without the FCC's net neutrality, or Open Internet rules, according to Hal Singer, an economist and senior fellow at the Progressive Policy Institute. Those figures factor out expenditures for DirecTV and operations in Mexico.

But Internet service providers have constantly used the threat of decreased investment "to undermine the public's clear and overwhelming support for basic net neutrality rules that protect online free speech," said Evan Greer, campaign director for Fight For The Future, a non-profit organization that supports free expression on the Internet. "The reality is that the sky is not falling, and companies shouldn't be able to hold consumers' rights hostage based on their own financial decisions."

5G is coming

To fully realize the potential of 5G, Pai says there must be rules in place that maximize investment, since the 5G rollout will require massive capital expenditures on infrastructure.

“Remember networks don’t have to be built, risks don’t have to be taken, capital doesn’t have to be spent in the communications sector. And so the more difficult that government makes it to rebuild a business…the less likely it is that broadband providers, big and small will take the risk (and) invest the billions of dollars that are needed to connect consumers to digital (opportunities).”

His goal is to build “smart infrastructure, not dumb pipes.”

Pai claims the change in the control of the FCC is already benefiting consumers. For example, earlier this month, the FCC ended its investigation into the free data offerings known as “Zero Rating,” saying that such free data plans have proven to be popular among consumers, particularly those with lower incomes.

“The truth is that consumers like getting something for free and they want the providers to compete by introducing new data service offerings. Our recent decision simply respected those preferences.”

Pai said “the best evidence of the wisdom of our new approach is what happened afterward,” when all four major U.S. wireless providers announced new or refreshed unlimited data plans.

Not everyone agrees with the chairman, Greer says. Without rules preventing paid prioritization, ISPs can become "gatekeepers who can essentially pick and choose winners and losers. ... Without bright line rules to prevent it, there's nothing to stop companies from stifling competition and driving consumers toward their own products."

Pai separately made news Monday, when he told The Wall Street Journal that he didn’t anticipate the agency to have a role in reviewing the pending AT&T-Time Warner merger.

Contributing: Mike Snider from McLean, Va.

Email: ebaig@usatoday.com; Follow USA TODAY Personal Tech Columnist @edbaig on Twitter