FCC Commissioner: 'Government doesn't have a place in the newsroom'

This is a rush transcript from "On the Record," February 20, 2014. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Does President Obama really think no one at FOX will see a government spy in our newsroom? Tonight, an FCC commissioner goes ON THE RECORD and blows the whistle on a plan to install spies in newsroom. They call it something else, like a monitor. But no one is that stupid. We know what they are trying to do.

The FCC commissioner who blew the whistle is here to go ON THE RECORD. Commissioner Ajit Pai joins us.

Nice to see you, sir.

AJIT PAI, FCC COMMISSIONER: Thanks for having me.

VAN SUSTEREN: So your op-ed blew the whistle on this. What is it the FCC wants to do and why you wrote your op-ed?

PAI: The FCC is proposing to do what it is calling a Critical Information Needs, or CIN, study. They will send researchers into newsrooms across the country, television and broadcast and newspapers, to try to figure out why they cover the stories they do. They have identified eight categories of news they think news people should be covering. Some of the questions they ask were highly technical. They are asking reporters, for example, have you ever wanted to cover a story and were told you can't do so. As I looked into the study design, I got concerned about what it implicated for our First Amendment values. That's why I wrote it in the "Wall Street Journal."

VAN SUSTEREN: What's been the response by the other members of the FCC?

PAI: I haven't talked to all my colleagues, but I am pleased to report, tonight, the chairman of the FCC, Tom Wheeler, instructed the contractor, who will be doing the study, to remove questions from the study relating to news philosophy and editorial judgment. That's a positive step but the devil is in the details when it comes to the actual study as implemented.

VAN SUSTEREN: It may be a positive step, but you would have to be out of your mind to have proposed this in the first place. So, you know, I suppose it's great the commissioner now, after everyone is raining on its parade. But who, in the first place, suggested this and thought it was OK to send monitors into newsrooms?

PAI: The study was designed and adopted under previous leadership. The reaction you have is similar to others in America. Government doesn't have a place in the newsroom. One thing that's made the country great is the fact that news outlets decide for themselves what stories to cover and how to cover them, especially in a marketplace as competitive as this one. They don't need the government over their shoulders tell them they're doing something wrong.

VAN SUSTEREN: Has any money been spent so far to do this?

PAI: Has far as I know, no. The study hasn't yet started. That's why it's critical for us to make sure we stop the study or, if it's going forward, we make sure it doesn't infringe on constitutional freedom.

VAN SUSTEREN: What is the authority for the FCC to think they can do that? What is the statute they think they must comply with?

PAI: Technically, the FCC is relying on a statute that requires the FCC to report to Congress every three years on barriers entrepreneurs and small businesses face when trying to get into the communications industry.

VAN SUSTEREN: All right, stop there. What does asking a question about whether or not you have been prevented a story have anything to do with being a barrier?

PAI: That's the concern I had, that there isn't any connection. Moreover, even if there were some connection, the FCC doesn't have regulatory authority when it comes to the print media. We don't tell newspapers what to cover, and newspapers, nonetheless, are covered under the CIN study.

VAN SUSTEREN: This is included. Newspapers are included. Yet, you have no authority to do that?

PAI: Exactly right.

VAN SUSTEREN: The other thing said, barriers to entering the field, is that right?

PAI: Right.

VAN SUSTEREN: With the Internet, what barrier is there to get information out there if you want to get information out there?

PAI: This is one of the great ironies of the story. What characterizes the media marketplace in 2014 is consumers have an unparalleled amount of choices. They can go online. They can find a broadcast network they like. They can go on cable news or newspapers. Given they have so many choices and given there are so many people competing to provide them the news they want, there's no reason for the FCC to inject itself into the editorial judgments of all these people.

VAN SUSTEREN: Do you see this as the government attempting to pressure news organizations?

PAI: I'm not sure what the intent behind it is. What I can tell you is a lot of folks I have heard from in the industry are telling me that they are worried about the inadvertent coercion that might happen if the FCC says, look we are just asking questions. Well, if you are holding a broadcast license the FCC issues, you are not going to feel like it's voluntary if you have to answer the questions in this 70-something-page study.

VAN SUSTEREN: It's not even the FCC doing it. The FCC hires outside people to do this. We have to spend money, if it's going to happen. Frankly, I can't imagine any newsroom letting a government agent come in and do that. But is that the FCC hire as a contractor, so the American taxpayers are paying for the spies, as I call them, to come into the newsroom.

PAI: That's right. The FCC is hiring contractors to do the study.

VAN SUSTEREN: And is the commissioner, in your conversation with him, does he now think, what was I thinking when I thought it was OK? He's now trying to amend the questions. But does he have a back off and think it's a bad idea?

PAI: In fairness to the chairman, he wasn't leading the agency when it was designed but --

VAN SUSTEREN: Does he have the power to say no?

PAI: He does have the power to say no. I'm hopeful that he and my colleagues will come to embrace the basic principle that the government has no place in the newsroom.

VAN SUSTEREN: Commissioner, thank you. I can tell you one thing, your op-ed has been very helpful, you know, to the First Amendment. Thank you, sir.

PAI: Thank you for having me.