FCC Commish: Hey, don't look at me – Congress should sort out net neutrality mess

Pai: You've got it all wrong about ISP privacy

However, Pai's economic thinking is notably missing in another piece of important communication covering the recent controversial decision by the FCC, Congress and President Trump to kill off FCC rules over digital privacy. Now internet service providers have the right to sell users' personal data without their consent.

Writing in an op-ed for the Washington Post along with US trade watchdog the FTC's chair Maureen Ohlhausen, Pai ditches most of the popular but wildly misleading arguments for getting rid of the rules and focuses on the more reasonable argument that the FTC is far better equipped than the FCC to handle privacy issues.

However, alongside a smattering of abuse about "Chicken Little" reactions and a vague promise to create new privacy policies that will resolve all the problems, Pai fails entirely to recognize the important economic realities that he claims will be a key part of his FCC chairmanship.

In a counter-argument to those criticizing the decision to scrap privacy rules, he wrote: "Some argue that Internet service providers should be treated differently because they have access to more of your personal information than companies such as Google and Facebook."

And later Pai argues: "Others argue that ISPs should be treated differently because consumers face a unique lack of choice and competition in the broadband marketplace. But that claim doesn't hold up to scrutiny either. For example, according to one industry analysis, Google dominates desktop search with an estimated 81 percent market share (and 96 percent of the mobile search market), whereas Verizon, the largest mobile broadband provider, holds only an estimated 35 percent of its market."

What this wholly fails to note, however, is that ISPs charge for their service – internet access. They charge a lot and as a result they make billions of dollars in profits. Companies like Google and Facebook ride on top of internet access and make their services available for free to the end user.

Any economist is going to be able to point to hundreds of examples of where a market is clearly differentiated by price. And that differentiation is never easier than between one market that charges and one that does not.

Here's betting that is not the sort of economic analysis that will be encouraged at Pai's new Office of Economics & Data, however. ®