Proposals to reclassify Internet access as a Title II service threaten to remove incentives to invest in broadband growth and improvement, companies say

WASHINGTON, D.C. (September 9, 2014) – In a letter sent today, a diverse group of technology manufacturers and suppliers of high-tech equipment warn U.S. Commerce Secretary Penny Pritzker that classifying the Internet as a public utility would have harmful implications for the Internet and the broader national economy. 

The companies say that investment in broadband networks and equipment has flourished under the current light regulatory approach.  Infrastructure equipment spending by businesses is expected to grow from $38.6 billion in 2013 to $42.9 billion in 2017.  The companies make the case that this investment in the American economy will be jeopardized if Internet access is classified as a public utility under Title II, a move they write would “threaten demand for Internet infrastructure, reduce incentives for investment, hinder innovation and jeopardize this success.”

The 33 companies go on to state, “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.  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 investment in broadband services declines, it will set off a domino effect of decreased investment and innovation…”

The letter also says that if the FCC goes forward with new regulations, it should exercise legal authority under Section 706 rather than Title II.

The FCC “has previously declined past invitations to regulate broadband Internet service as a Title II service, wisely recognizing the essential role that flexibility and innovation would play in the success of the Internet economy,” the companies say. 

Tom Stanton, chairman and CEO of ADTRAN – one of the companies that signed the letter – added: "The Internet has been an American success story, profoundly increasing domestic job growth, productivity, and economic prosperity. We supported the FCC's original proposal, because it recognized the difficulties in applying rules that were created decades ago before the Internet even existed.  Our company signed this letter, along with 30 other like-minded companies, urging the Administration to adopt policies that will incentivize investment in broadband infrastructure."

Robert J. Stanzione, chairman and CEO of ARRIS said: "ARRIS agrees with the more than 30 equipment manufacturers and suppliers that urged the United States Department of Commerce to oppose proposals to regulate broadband Internet services under Title II of the Communications Act of 1934. Such regulation is overly prescriptive and threatens continued innovation and investment in the broadband sector. It also would jeopardize jobs in the high-tech manufacturing industry (which created more than 600,000 jobs in the past four years) and ultimately harm the economy."

Signatories of the letter, which are all members of either the Telecommunications Industry Association (TIA), the National Cable and Telecommunications Association (NCTA), or both, include:

  • ACS Solutions
  • ActiveVideo Networks
  • Alcatel-Lucent
  • Alticast
  • BlackArrow
  • Blonder Tongue
  • Broadcom
  • Cisco
  • Commscope
  • Concurrent Computer
  • Drake
  • dLink
  • Ericsson
  • Gainspeed, Inc.
  • Harmonic
  • IBM
  • ILS Technologies
  • Intel
  • NetCracker Technology
  • NSN
  • Pace
  • Panasonic Corporation of North America
  • Penthera Partners
  • RGB
  • Rovi
  • Sandvine
  • Sumitomo Electric Lightwave
  • Synacor
  • This Technology
  • Universal Remote Control
  • Walker & Associates