Sprint says US telecoms will invest despite stronger net neutrality

Malathi Nayak SAN FRANCISCO (Reuters) – Sprint Corp., in its surprise endorsement of a tougher U.S. regulatory regime for internet service providers, sought to show that tougher rules won’t stop rival telecoms from investing, Chief Technology Officer Stephen Bye said in an interview. “This is one of those topics that’s very fraught, very politicized, and we took a step back and said this is in the best interest of our customers, consumers and the industry, and quite frankly, we found some of (our competitors’) arguments unconvincing,” Bye told Reuters this week. “Our competitors are going to continue to invest, so they represent a situation that’s not going to happen,” he added. Sprint’s position contrasts sharply with other U.S. wireless and cable companies such as Comcast Corp, Time Warner Cable Inc, Verizon Communications Inc and AT&T Inc. The companies say they support net neutrality, the idea that all network traffic should be treated equally, but they have staunchly opposed a Federal Communications Commission proposal to more tightly regulate internet service providers under a section of communications law known as Title II, which would treat them more like traditional phone companies. They are expected to challenge the rules in court after the FCC votes on them Feb. 26. On a call with investors last week, Verizon Chief Executive Lowell McAdam said a stronger regulatory regime is “the absolute wrong way to go” and would stifle job creation and innovation. But Bye said the government’s recent record-setting $44.9 billion spectrum auction is “a great testament to the level of investment that companies in the industry are willing to make.” AT&T and Verizon were among the largest buyers in the auction, with bids of $18.2 billion and $10.4 billion, respectively. Sprint did not participate in the auction, planning another one in 2016. “The idea that some of our competitors are suggesting that they will stop investing if Title II goes into effect … That is something we have not agreed to,” Bye said. Sprint’s public support for stricter net neutrality rules, disclosed in a Jan. 15 filing in the run-up to FCC Chairman Tom Wheeler’s latest proposal last week, caught the industry and competitors by surprise. The proposed rules would prohibit internet providers from blocking or slowing down websites or charging companies to deliver their content faster. But Wheeler also sought to address concerns from some internet providers by saying he would not seek to regulate prices, rates or requirements to allow competitors access to their networks. “We have been very lenient in the Title II environment and said that we really do not see this as a negative for the industry at all,” Bye said. Sprint is the third-largest U.S. wireless carrier by subscribers. Larger rivals AT&T and Verizon have market capitalizations about 10 times larger than Sprint’s $19.47 billion. Given the scale of AT&T and Verizon’s operations, some analysts say they have more to lose when it comes to net neutrality rules. (Reporting by Malathi Nayak; Additional reporting by Alina Selyukh in Washington; Editing by Lisa Shumaker)