The companies argued that reclassifying broadband service would curb network investment by Internet service providers. That slowdown in spending would “flow downstream,” eventually affecting the entire U.S. economy, the tech companies said in a letter to lawmakers and the Federal Communications Commission.
But comments this week by a Verizon executive cast doubt on that theory. Verizon's Chief Financial Office Fran Shammo said this week at a conference that the company will continue to invest in its networks, regardless of whether the FCC reclassifies broadband as a Title II utility service. Many net neutrality advocates believe that the FCC must reclassify broadband as a utility in order to ban online fast lanes.
“To be real clear, this does not influence the way we invest,” Shammo said in response to a UBS analyst's question about whether the possibility of Title II regulation would affect the “attractiveness of investing further in the United States.”
Shammo added: “We're going to continue to invest in our networks and our platforms both in Wireless and Wireline FiOS and where we need to. So nothing will influence that. If you think about it we were born out of a highly regulated company so we know how this operates.”
Verizon, which previously sued to overturn the 2010 net neutrality rules, is among the most strident opponents of new broadband rules, so Shammo's remarks came as something of a surprise.
Yesterday, however, Shammo refined his stance, saying in a blog post that he was referring only to Verizon's short-term investment in its networks. “Discussions about potential regulatory changes related to net neutrality have been going on for a decade, and we don't change our short-term view on investment based on rumors of what might or might not happen,” he wrote. He added that “experience in other countries shows that over-regulation decreases network investment.”
“If the U.S. ends up with permanent regulations inflicting Title II's 1930s-era rules on broadband Internet access, the same thing will happen in the U.S. and investment in broadband networks will go down,” he wrote.
Meanwhile, FCC Chairman Tom Wheeler seems skeptical of arguments that treating broadband like a utility will result in a decrease in investment. Yesterday, he reportedly downplayed that possibility.
“For 20 years, Verizon Wireless, AT&T Wireless, all the wireless carriers have been living under Title II with appropriate forbearance,” he said, according to the Washington Post. Wheeler added that those carriers “have been able to raise and invest hundreds of billions of dollars and build a mobile network that is the envy of the world.”