Internet Providers Not Happy with New regulations passed by FCC – Verizon Communications Inc. (NYSE:VZ) in Focus


Under the Telecommunication Act, Title II, internet will now be regulated by the Federal Communications Commission. Where previously, the service providers of wireless internet were exempted from regulation under the open internet rules, they will now come under the new regulations as well.

Although the advocates of net neutrality as well as the consumers were really happy with these new regulations, however, the internet service providers which were affected adversely did not take the news very well and rather mocked the new regulations by FCC.

Verizon Communications Inc. (NYSE:VZ), which is the biggest name in wireless carriers wasn’t happy with these new regulations either. As a result, Verizon Communications Inc. (NYSE:VZ) answered with mockery by claiming that with these new regulations, the FCC has taken the internet industry back in time to 1934 when the Telecommunications Act was first passed. Verizon Communications Inc. (NYSE:VZ) further claimed that not only are there regulation misguided, but are also wholly unnecessary.

The senior Vice President, Public Policy and Government Affairs, of  Verizon Communications Inc. (NYSE:VZ), Michael E. Glover also stated that with these regulations, the FCC has targeted open internet and they bound to have adverse effects in the future on the operation of internet.

Furthermore, the company stated that these regulations mean that there will be a decrease in investment and less innovation which will not only harm investors but consumers as well. Previous policies had encouraged investment, which resulted in innovative services which allowed the consumers to enjoy their internet experience.

Verizon Communications Inc. (NYSE:VZ) is of the view that internet has been a success industry, and if there is to be a policy change, it should be brought so by the legislature, a body which is rightfully charged with this duty by constitution. And this too should be done after very careful analysis.

Another big name in the industry, AT&T Inc. (NYSE:T) is also not happy with the new regulations, and has also threatened to sue FCC. Jim Cicconi, who is  the senior VP of AT&T Inc. (NYSE:T) in the External Affairs and legislative Affairs, has stated that instead of moving forward, these regulations has set the whole industry back, and will also entail unnecessary litigation costs.

On the flip side, many wireless providers, including T-Mobile US Inc. (NYSE:TMUS), Sprint Corp (NYSE:S) as well as Google Inc. (NASDAQ:GOOGL) has commended the FCC on these new regulations. Sprint Corp (NYSE:S), which is the 3rd largest wireless carrier has stated that these new regulations by FCC reflect its thoughtful as well as measured approach. The company is of the view that balanced net neutrality rules backed by light regulations are going to benefit the consumers a lot. These regulations will also encourage competition, innovation as well investment in this segment.

Although, the FCC has approved these new regulations, it is still expecting Verizon Communication Inc. (NYSE:VZ) and AT&T Inc. (NYSE:T) to sue the body in near future. Previously, FCC has lost twice in lawsuits by wireless companies, and it is still contentious whether it will prevail this time.

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