Cisco's Chambers slams Obama's net neutrality stance

Cisco CEO John Chambers used his quarterly results call with analysts to blast President Barack Obama's net neutrality stance, promising to be "very aggressive (in opposition to Title II regulation of the Internet) and try to educate people on all sides about why this is not right," according to a story in Computer Weekly.

Cisco reported dramatically slower demand for telecom network equipment in the recently completed quarter and Chambers said net neutrality uncertainty was to blame.

"That's an implication, I think, of what you're seeing in terms of net neutrality and Title II discussions going on where, in my opinion, it would be a very disappoint result if we moved back to regulation of the Internet--like we did with voice many decades ago," Chambers said in the analyst's call. "It's very important we send a message because you are going to see these service providers slow, if not pause completely, on broadband buildout because, if they can't make money on broadband buildout, they aren't going to build it out."

AT&T (NYSE: T) CEO Randall Stephenson backed that by telling the Wells Fargo Technology Media & Telecom conference that AT&T would "pause" its ultra-high-speed broadband buildout until there is some certainty on which way the federal government is going on net neutrality.

"Let's pause, let's make sure that we have … understanding as to what this process looks like, where these rules can conceivably land, what those rules would look like and then let's re-evaluate," Stephenson said. "We are in a pause moment right now on those kinds of investments."

Verizon (NYSE: VZ) CFO Fran Shammo, speaking at the same conference, agreed with Stephenson and Chambers that Title II regulation won't fit today's broadband environment. "Title II was created in 1934 so to think that Title II regulation fits in what the environment is today for the consumer is just ridiculous," Shammo said.

Cisco did report better than expected first-quarter revenue and profit thanks to demand for high-end switches and routers, a Reuters story said, noting that total revenue was up to $12.25 billion compared to $12.09 billion in the year-ago quarter.

That business, though, won't offset continued slowdown in the telecom space, Chambers conceded.

"Service provider is the big challenge … that's due to two to three U.S. service providers who have dramatically slowed the order rates with us," Chambers said in the earnings call.

Cisco was among five telecom equipment makers whose business is in jeopardy thanks to net neutrality uncertainty, a Goldman Sachs report said, adding Ciena, Finisa, Infinera and Juniper to the list in a report covered by The Street.

For more:
- Computer Weekly has this story
- Cisco has this press release
- Seeking Alpha has this transcript transcript (reg. req.)
- Seeking Alpha has this transcript transcript (reg. req.)
- The Street has this story
- and Reuters has this story

Related articles:
FCC delays net neutrality decision until next year following Obama's statement
Comcast says it agrees with the President on net neutrality … to a point
Verizon's Shammo: If net neutrality passes, it will create a litigious environment
AT&T halts fiber deployments until net neutrality is resolved

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