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Verizon: Reclassifying Broadband Under Title II Invites Litigation

11 Dec, 2014 By: Erik Gruenwedel

Protestors disrupt Dec. 11 FCC meeting in Washington, D.C.

Net neutrality protestors interrupt FCC meeting in Washington, D.C.

Possible efforts by Congress and the Federal Communications Commission to reclassify high-speed Internet service under Title II of the Telecommunications Act of 1934 would be shortsighted and likely lead to lawsuits, a senior executive with Verizon told an investor group.

Speaking Dec. 9 at the UBS 42nd Annual Global Media and Communications confab in New York, Verizon CFO Francis Shammo said such a move by the FCC would summon unnecessary regulation and stymie private investment.

At issue is how to incorporate net neutrality, the concept whereby all Internet traffic is afforded equal access in a defined broadband distribution channel. In January, the U.S. Court of Appeals for the District of Columbia Circuit invalidated existing federal net neutrality guidelines following a lawsuit filed by Verizon.

Web services such as Netflix, Amazon Prime and Google Play want unfettered access. Internet service providers (ISPs) such as Comcast, AT&T, Time Warner Cable and Verizon, among others, which have spent billions rolling out broadband, want the right to charge commercially viable (tiered pricing) streaming rights.

Classifying broadband as a utility under Title II would limit the lengths to which ISPs could monetize high-speed Internet service. Shammo said such a move would hinder continued investment as investors question their return on investment.

“Why would you go to a 1930’s piece of legislation to try to regulate something that is a 21st-century technology?,” Shammo said.

Shammo advocates the FCC follow Section 706 of The Telecommunications Act of 1996 that mandates the government address whether high-speed Internet service is “being deployed to all Americans in a reasonable and timely fashion.”

Gene Kimmelman, CEO of Public Knowledge, a civil liberties group in favor of net neutrality, isn’t buying Verizon’s stance.

“They want to make an argument about [declining] investment, but the market reality is quite different,” Kimmelman told TalkOfDC.com. ”They’re already adjusting their behavior to reflect what you expect your political market to be. And the economic market is totally stable in that scenario.”

Indeed, during a Dec. 11 FCC meeting addressing net neutrality, protestors disrupted the proceeding by unfurling a “Reclassify Now!” banner asking why the agency hasn’t yet adopted Title II. The protestors were escorted out of the building.

“If the FCC was a truly democratic agency, we would have a Title II rule today. [FCC] chairman [Tom] Wheeler needs to stop stalling and listen to the public,” activist Vanessa Beck of PopularResistance.org, said in a statement.

Regardless, Shammo Dec. 9 said countries that have applied strict government regulation have allegedly seen their broadband fall into “total failure” as investment and innovation slows to a crawl.

“Why do we need regulations around something that's working? If [the FCC goes] all the way to the extreme of Title II … I think it's going to be a very litigious environment,” Shammo said.


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