FCC head announces new office focused on economics

FCC head announces new office focused on economics
© Greg Nash

Federal Communications Commission (FCC) Chairman Ajit Pai on Wednesday announced the creation of a new office focused on economics and data, saying he wants to retool the agency to be more economics-driven.

Pai lamented the prior path of the FCC during a speech at the Hudson Institute in Washington, D.C., arguing that economists should be better utilized.

“Economists are not systematically incorporated into policy work at the FCC,” he said. “Instead, their expertise is typically applied in an ad hoc fashion, often late in the process. There is no consistent approach to their use.”

Pai said that the new Office of Economics and Data (OED) would provide economic analysis on many of the functions and policy decisions that the FCC considers.

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The OED will have three primary focuses: giving early input on FCC decisions; improving management of data, reports and analysis; and taking a long-term approach to the FCC’s policy in areas on the horizon, like the internet of things and increasingly dense wireless networks.

The chairman stressed a market-based approach, saying that the FCC should only create rules and intervene in enterprise in situations in which the economics suggest it’s worth it.

“The FCC should have the economic experts it needs to identify market failures and study whether the benefits of Commission action would be warranted given the costs," Pai said.

The chairman's advocacy is in line with his general push to roll back regulations approved by the FCC under former Democratic Chairman Tom Wheeler, opting for policies in favor of less government intervention.

Pai had supported the recent removal of Obama-era consumer broadband privacy protections, arguing that they were an example of excessive government oversight.

He also scrapped agency efforts to curb the cost of internet for lower-income individuals and set lower price caps for inmate phone calls from prisons.

Pai argued in his speech Wednesday that “cost-benefit analysis is largely ignored" at the FCC, to the detriment of the agency’s mission.

The chairman said the office he is creating would bring an economic focus back to the FCC.

“We intend to restore the tradition of staff economists spending time thinking about the future and publishing in the present influential white papers that keep us from being stuck in the past,” Pai said.