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Broadband CEOs warn FCC against reregulating for net neutrality

Grant Gross | May 14, 2014
The CEOs of 28 U.S. broadband providers and trade groups, including the four largest ISPs, have warned the U.S. Federal Communications Commission against reregulating broadband as a utility in an effort to protect net neutrality, saying reclassification of broadband would scare away investors.

"On Title II, it's true that some forms of discrimination could be reasonable, and that price differentials for your own customers may be OK," said Matt Wood, Free Press' policy director. "ISPs now want the freedom to charge content providers new fees for accessing broadband customers."

The CEO letter suggested that past reclassification discussions have been bad for their businesses. The CEOs pointed to discussions at the FCC in 2009-10 to reclassify broadband as a telecom service. "The potential threat of Title II had an investment-chilling effect by erasing approximately 10 percent of some ISPs' market cap" around the time of an FCC announcement to explore reclassification.

"Under Title II ... consumers would face less choice, and a less adaptive and responsive Internet," the letter said. "An era of differentiation, innovation, and experimentation would be replaced with a series of 'government may I?' requests from American entrepreneurs. That cannot be, and must not become, the U.S. Internet of tomorrow."

The broadband CEO assertions that Title II would hurt investment are "ludicrous," Wood countered. "This is yet another straw man in the army of straw men that the ISPs send out."

Since the FCC in 2005 voted to deregulate broadband, the investment by incumbent telecom-based broadband providers AT&T, Verizon and CenturyLink has stagnated, the group said. Since that time, the three carriers have cut tens of thousands of jobs, while revenues have jumped by tens of billions of dollars a year, said Free Press, citing reports the companies filed with the U.S. Securities and Exchange Commission.

"Under Title II, Bell company investment, jobs and revenues all increased," Free Press said in a study on broadband investment. "After Title II was removed, jobs disappeared and investment declined, despite soaring revenues and record profits."

Among the people signing the broadband CEO letter were executives with Cox Communications, FairPoint, CTIA, USTelecom and the National Cable and Telecommunications Association.

 

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