Apparently net neutrality will have an impact on Verizon's (NYSE: VZ) future investments--much as it will for other telcos--Verizon CFO Fran Shammo has clarified.
Shammo brought on the need for clarification after comments he made at the UBS 42nd Annual Global Media and Communications Conference this week drew widespread attention for their apparent contradiction with industry contentions that net neutrality will severely impact future investment in high-speed broadband.
"We're going to continue to invest in our networks and our platforms, both in wireless and wireline FiOS and where we need to," Shammo said in answer to a question about federal uncertainty over whether the Internet will be subject to Title II regulation. "We were born out of a highly regulated company so we know how this operates."
That declaration contradicted the industry story line that regulation will slow or stop further investment in high-speed broadband networks. So, afterward, Shammo took to a Verizon blog to explain his point.
"Discussions about potential regulatory charges related to net neutrality have been going on for a decade and we don't change our short-term view on investment based on rumors of what might or might not happen," he explained.
That clarification added to Shammo's subsequent comments at the conference where he noted, "the FCC has the right to regulate … they do not need to go to Title II and why would you go to a 1930 piece of literature to try to regulate something that is a 21st Century technology."
In fact, he'd added at the time, international examples show regulation "leads you down to path of total failure because it really, really slows down investment and slows down innovation."
"Why do we need regulations around something that's working?" he asked. "I think if they go all the way to the extreme of Title II, I'll quote what (AT&T CEO) Randall (Stephenson) said about a month ago, which is, I think it's going to be a very litigious environment."
Shammo's message at the conference was nothing new, company spokesman Rich Young told The Washington Post shortly after the comments were made.
"Verizon has been very consistent with what we've been saying in this area. In this case our CFO's message is again clear. At this stage, no change."
Gene Kimmelman, chief executive of Public Knowledge, actually focused on Shammo's contention that investment will be negatively impacted by regulation.
"They want to make an argument about (declining) investment, but the market reality is quite different," he told the Post. "They're already adjusting their behavior to reflect what you expect your political market to be. And the economic market is totally stable in that scenario."
For more:
- Seeking Alpha has this transcript
- The Washington Post has this story
- Re/code has this article
- Ars technica has this story
- Verizon posted this blog post
Related articles:
Verizon's Shammo: If net neutrality passes, it will create a litigious environment
Verizon's Shammo: We'll look at FiOS expansions once it returns the cost of capital
AT&T halts fiber deployments until net neutrality is resolved