Top ISPs Tell Investors FCC Oversight Won’t Harm Broadband Investment

It appears that many of the nation’s leading Internet service providers aren’t actually worried about the Federal Communications Commission’s “Third Way” approach to broadband oversight and its impact on broadband build-out and investment – despite what they’re telling lawmakers in Washington.

The FCC recently announced its middle-ground approach to broadband oversight to preserve the agency’s authority after it was called into question by Comcast in the Comcast v. FCC case. This approach would reestablish the status quo and the FCC’s ability to protect consumers, promote choice, preserve the open Internet and carry out key elements of the agency’s National Broadband Plan, such as accelerating broadband build-out to rural and low-income Americans.

In the wake of the FCC’s announcement, unsubstantiated and misleading claims about the proposal’s impact on broadband investment have become rampant through the spin work of company representatives.

However, statements by many industry executives show that these companies are spreading misinformation in D.C. about the impact that the FCC’s decision will have on their businesses, while they are telling investors an entirely different story. Free Press President and CEO Josh Silver highlighted Comcast CEO Brian Robert’s hypocrisy in a blog post last week.

Internet service providers are indicating to Wall Street that this move is, in fact, the light regulatory approach that the FCC claims it to be, and that it will not impact investment or broadband build-out. To set the record straight, below are quotes from top industry executives that clearly refute any rumors and worries about the FCC’s move to protect broadband consumers.

From The Mouths of Industry Executives

Time Warner Cable COO Landel Hobbs’ comments regarding the FCC’s proposal during an investor conference on May 19, 2010:

“It is a light regulatory touch that their focus is really to put them in a position where they can execute around their national broadband plan, not to rate regulate or crush investment in our sector. That’s not at all what we believe. So, I want you to take away as, yes, we will continue to invest, yes, we will participate in the Notice of Inquiries and we will have an open, healthy dialogue with the FCC throughout the whole process.”

Sprint Senior Vice President of Government Affairs Vonya B. McCann’s statement issued May 6, 2010 regarding the FCC’s plans to apply new rules to broadband services:

“Sprint appreciates the FCC's statement that any regulation it may assert would be through a light regulatory touch. …Sprint commends the FCC for the cautious approach it is taking toward this complex subject. The FCC can and should foster similar growth in broadband by focusing its energies on protecting consumers by promoting competition and placing checks and balances on providers with market power.”

Comcast Chairman and CEO Brian Roberts discussed the issue at the Cable Show in Los Angeles on May 12, 2010, according to SNL Kagan, a business intelligence news source:

"I honestly don't believe the government is trying to turn the clock back," Roberts explained, adding that "the government is not a big worry."

SNL Kagan wrote, “Given the potential impact of reclassification on broadband pricing, Roberts said he expects the industry to continue to invest, innovate and work through the government issues.”

Windstream Corp. President and CEO Jeffery Gardner’s comments, according to SNL Kagan regarding the FCC’s broadband oversight during an investor conference, May 18, 2010:

Gardner said there has been "a bit of an overreaction" as he believes FCC Chairman Julius Genachowski understands the importance of a light regulatory touch in overseeing broadband networks.

"I don't think that there is tremendous financial risk out there with respect to this … issue. We would prefer less regulation, but as I said I am confident that the chairman understands the issue."

The Wall Street Journal reported that Verizon Wireless Chief Executive Lowell McAdam is saying that that Verizon is continuing to invest in its wireless LTE network and that the company has no plans to slow investment in its wireless broadband network as a result of the FCC’s move.

Tech Company Support for the FCC’s Move on Broadband Oversight

After hearing from the nation’s top ISPs, it’s important to note that leading Internet and tech companies, including Amazon, Netflix, Skype and Google (which according to the company generated $54 billion in economic activity last year have also voiced strong support for the FCC’s proposal to protect consumer choice and innovation online. In fact, thirteen top tech companies sent a joint letter to the FCC in support of the move. They wrote:

"We applaud the middle ground approach that you have proposed. We share your belief that this course will create a legally sound, light touch regulatory framework that benefits consumers, technology companies, and broadband Internet access providers.

"This framework will ensure that consumers have access to an open Internet, one that would preserve a level playing field for all participants. And it does so without regulating the Internet but only applying basic rules of the road to the transmission services that provide access to the Internet."

Broadband investment is key to ensuring the U.S. remains globally competitive, especially after it has slipped in international rankings over the past several years. We’re glad that industry executives have confirmed in their conversations with investors that the FCC’s new approach will not curb investment that is key to broadband build-out, and maintaining and improving infrastructure and speed.

People + Policy

= Positive Change for the Public Good

people + policy = Positive Change for the Public Good