A federal proposal to regulate the Internet under similar rules as telephone service threatens to stifle needed investment in new broadband services, the head of Tennessee's biggest phone provider said Friday.
Gregg Morton, AT&T Tennessee president, said the April proposal by Federal Communications Commission Chairman Julius Genachowski to bring broadband providers under FCC telecommunication regulation is not needed and could harm the industry and consumers.
"If you put heavy-handed regulation that forces other people to use our network for free or to control how we can price our network, that investment is going to stop," Mr. Morton said.
The FCC estimates the United States will need to spend $350 billion to extend broadband services throughout the country. The federal stimulus program in 2009 allocated $7 billion toward that effort.
FCC Chairman Julius Genachowski insists some federal controls over Internet providers are needed to ensure equal access and to protect consumers. He said he rejects both the option of regulating the Internet with price and content controls or the option of doing away with any controls over broadband providers.
FCC Internet approaches* Extend broadband communications to all Americans by transforming the $9 billion Universal Service Fund from supporting telephone service to supporting high-speed Internet links* Regulate as a telecommunications service the transmission component of broadband access service* Forbear any application of other communication regulations of Internet to limit rules over content or most controls over pricingSource: Federal Communications Chairman Julius Geachowski
"Heavy-handed prescriptive regulation can chill investment and innovation, and a do-nothing approach can leave consumers unprotected and competition unpromoted, which itself would ultimately lead to reduced investment and innovation," Mr. Genachowski said in a recent speech.
With broadband companies eager to manage the data flow on their networks, regulation supporters claim there is potential for abuse in an unregulated environment.
On Monday, AT&T plans to introduce differentiated pricing for new customers of smart phone users based upon their usage. The phone giant will charge more for those who frequently use their iPhones or BlackBerrys for video and data access. But 98 percent of smart phone users should be able to get all the service they need for $25 per month for up to 2 gigabytes of data, Mr. Morton said.
"The industry continues to invest and make improvements, so where is the market failure that requires more regulation?" Mr. Morton asked.
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