33 equipment manufacturers oppose public-utility broadband

The U.S. Federal Communications Commission should resist calls to reclassify broadband as a regulated public utility as a way to enact strong net neutrality rules, more than 30 broadband equipment manufacturers, including Cisco Systems, IBM and Intel, have said.

Reclassifying broadband as a regulated common-carrier service under Title II of the Telecommunications Act would “threaten to remove incentives to invest in broadband growth and improvement,” the equipment makers said in a letter Tuesday to the U.S. Department of Commerce. “Because Title II allows for so little flexibility and innovation, it would undercut substantially the broadband providers’ incentives to make the investments necessary to fund network deployments and upgrades.”

The 33 equipment makers, also including Ericsson, Panasonic of North America and Alcatel-Lucent, are members of either the Telecommunications Industry Association or the National Cable and Telecommunications Association (NCTA). Some of the companies have previously spoken out against broadband reclassification.

The letter went first to the Department of Commerce instead of the FCC because Secretary of Commerce Penny Pritzker is the leading business voice in President Barack Obama’s administration, an NCTA spokesman said. “It’s important to communicate about how damaging Title II regulation of the Internet will be to jobs and the economy,” he added by email.

The trade groups also plan to send the letter to the FCC, he said.

Reclassifying broadband as a regulated common carrier would hurt the U.S. economy and would “create unnecessary obstacles” to broadband deployment and adoption, the letter said.

“A sudden shift from the existing light-touch approach—which has been an unqualified success and the basis for billions of dollars in investments—to the prescriptive regime of Title II would be extremely disruptive to the broadband marketplace,” the letter continued. “Resources that would normally be spent on building and improving infrastructure would instead be spent complying with burdensome regulatory obligations, and uncertainty regarding future profitability would deter additional private investments.”

If the FCC feels it “must” pass new broadband regulations, it should use as its regulatory authority Section 706 of the Telecommunications Act, which gives the agency responsibility for timely broadband deployment, the equipment makers wrote. FCC Chairman Tom Wheeler has advocated the Section 706 approach.

Several advocacy groups, including Free Press and Public Knowledge, along with companies like Netflix and thousands of people who’ve filed comments with the FCC, have called on the agency to reclassify broadband as a public utility. Those groups have criticized Wheeler’s proposal to pass new net neutrality rules that would allow broadband providers to use “commercially reasonable” methods to manage network traffic.

Wheeler’s proposal would allow broadband providers to selectively degrade some Internet traffic, particularly video traffic that competes with cable TV services that most broadband providers sell, critics have said.

On Monday, Representative Nancy Pelosi, a California Democrat and House minority leader, urged the FCC to reclassify broadband under Title II. “I oppose special Internet fast lanes, only open to those firms large enough to pay big money or fraught enough to give up big stakes in their company,” Pelosi wrote in a letter to the FCC.

The equipment makers’ letter comes a day before a group of companies and advocacy groups will engage in a symbolic Internet slow-down in an attempt to show visitors the Internet slow lanes they say will appear if the FCC doesn’t pass strong net neutrality regulations.

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