FCC Discussions on Net Neutrality Hampering Investment in Wireline Broadband, Steering Investment to Wireless

14 Jan 2015

​Regulations on net neutrality have been at the center of attention recently throughout the world.Balancing the interests of businesses, governments, and consumers has been a challenge for all involved. In the United States, the Federal Communications Commission (FCC), with Chairman Tom Wheeler, is especially struggling to resolve a moderate proposal with President Obama’s public pro-neutrality stance. The uncertain possibilities of neutrality regulation have impacted operators such as AT&T and Verizon, and vendors such as Cisco in the wireline broadband space, forcing a shift in priorities until regulations are finalized.

While the United States has the independent FCC at the head of neutrality decisions, groups in Europe and Canada are also facing difficult neutrality changes, with the European Council and the European Union (EU) parliament, as well as the Canadian Radio-Television and Telecommunications Commission (CRTC) leading decisions for the these regions. “Historically, Europe has had a consumer-oriented focus for Internet usage, with regulated prices and required shared infrastructure. Now there are concerns surrounding the EU Single Market, and how new regulations could impact service providers, as well as a large portion of the population,” says Eric Abbruzzese, Research Analyst, ABI Research.

Legal and business frameworks which may be rolled into net neutrality, such as local loop unbundling, significantly alter the investment models for carriers. Realizing this, many companies have been allocating resources away from wireline technologies into other areas. “Carefully planning investments, and balancing wireline and wireless portfolios, will prove necessary for companies to continue to see success during this wireline-focused regulatory restructuring period,” adds Sam Rosen, Practice Director, ABI Research. “Operators or carriers that have a heavy focus on wireline, such as CenturyLink or Cisco, may find it difficult to see growth with some regulatory outcomes, while companies with a more balanced portfolio, including Verizon, AT&T, and Ericsson will simply steer resources to the highest return markets.”

A recent report on Network Neutrality and Network Services includes data on how components of Internet infrastructure and usage (pricing, competition, network management, etc.) are affected by neutrality regulations, as well as possible changes to those regulations and related legislation in the United States, European Union, and Canada. Effects on service providers, CDNs, and others involved, as well as prospective market shifts, are also covered.

These findings are part of ABI Research’s OTT and Multiscreen Services Market Research.

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