Clarifying his earlier remarks, Verizon CFO Fran Shammo ripped into proposals to reclassify ISPs under Title II of the Communications Act, arguing that such a move would jeopardize US private investment in broadband networks.

Alan Breznick, Cable/Video Practice Leader, Light Reading

January 22, 2015

2 Min Read
Verizon CFO Slams Title II Regs for ISPs

Verizon CFO Fran Shammo wants everyone to know that he thinks any proposal to impose utility-style regulations on ISPs is a really bad idea.

Speaking on Verizon Communications Inc. (NYSE: VZ)'s fourth-quarter earnings call Thursday morning, Shammo ripped into the idea of reclassifying ISPs under the much stricter Title II of the Communications Act. Calling it "an extremely risky path that will jeopardize" the future of broadband in the US, he said the adoption of Title II regulations would "completely change the way we view our investments in our networks," as well as the way other broadband providers view theirs.

"This will absolutely affect us and the rest of the industry," he said, in response to an analyst question near the end of the earnings call. Without naming nations, he contended that similar tighter regulation of ISPs in other parts of the world has stymied private investment in broadband networks, placing them well behind the US.

Seeking to clarify earlier remarks in which he seemed to downplay the impact of Title II, Shammo said he only meant then that any reclassification would not affect Verizon's network investment plans for 2015, which are already set. But, he said, the impact would definitely be felt after hat.

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Taking on President Obama's publicly stated support of Title II directly, Shammo slammed the idea of including such regulatory treatment of broadband in the president's new "middle-class economics" agenda for the nation. The Verizon CFO argued that the imposition of Title II rules would eventually hurt the middle-class by leading to job layoffs and small-business failures. "This will definitely trickle down to middle-class jobs," he said. (See Obama Skips New Broadband Mandates.)

In addition, Shammo warned that any attempt to impose Title II rules would "tie up the industry" in prolonged regulatory battles and lead to more lawsuits against the federal government. In the last regulatory fight over net neutrality rules for the Internet, Verizon led the legal charge against the Federal Communications Commission (FCC) , eventually overturning those rules in the federal courts. The company also threatened to sue again last year if the federal government went ahead with the proposed Title II reclassification. (See Sprint CTO Blesses a Light Touch of Title II.)

— Alan Breznick, Cable/Video Practice Leader, Light Reading

About the Author(s)

Alan Breznick

Cable/Video Practice Leader, Light Reading

Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.

As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.

Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.

He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.

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