Sprint goes off script, says Title II won’t hurt wireless investment

Sprint is disputing its fellow wireless providers’ claims that treating broadband as a common carrier service will harm network investments.

In a letter to the Federal Communications Commission yesterday, Sprint Chief Technology Officer Stephen Bye wrote that “light touch” application of common carrier rules won’t change how Sprint invests in its networks.

The FCC may vote on February 26 to reclassify fixed and mobile broadband as common carrier services that can be regulated under Title II of the Communications Act, which has long been applied to the wireline telephone market. In making his case for Title II, FCC Chairman Tom Wheeler argued that the commission can forbear from the statute’s onerous provisions while enforcing net neutrality restrictions against blocking, throttling, or prioritizing services in exchange for payment.

Sprint agrees, up to a point. The company wants mobile broadband to be granted “flexibility,” but it isn’t opposed to the use of Title II. The FCC’s earlier net neutrality proposals gave wireless carrier far more leeway than home Internet service providers, and President Obama urged the FCC to “recogniz[e] the special challenges that come with managing wireless networks.”

“Regardless of the legal grounds proposed, Sprint has emphasized repeatedly that net neutrality rules must give mobile carriers the flexibility to manage our networks and to differentiate our services in the market,” Sprint wrote. “With that said, Sprint does not believe that a light touch application of Title II, including appropriate forbearance, would harm the continued investment in, and deployment of, mobile broadband services.”

We asked Sprint to clarify what it means by managing its networks and differentiating its services, but the company declined to comment. Wheeler has pressured carriers over throttling policies that focus on unlimited data users, which the carriers have defended in the name of network management.

So while Sprint’s letter wouldn’t be confused for one written by a consumer advocacy group, it admits Title II won’t be a disaster for the industry. Title II already applies to cellular voice, but not data.

“When first launched, the mobile market was a licensed duopoly,” Sprint wrote. “This system was a failure, resulting in slow deployment, high prices and little innovation.” Congressional action in 1993 opened the market to new carriers including Sprint, the letter said. “This competition resulted in tremendous investment in the wireless industry, broader deployment, greater innovation, and falling prices. It is absolutely true that this explosion of growth occurred under a light touch regulatory regime. Some net neutrality debaters appear to have forgotten, however, that this light touch regulatory regime emanated from Title II common carriage regulation, including Sections 201, 202, and 208 of the Communications Act.”

What effect will reclassifying mobile data as Title II have on investment? “So long as the FCC continues to allow wireless carriers to manage our networks and differentiate our products, Sprint will continue to invest in data networks regardless of whether they are regulated by Title II, Section 706, or some other light touch regulatory regime,” Sprint wrote.

Sprint’s opinion is out of step with those of the other three major nationwide wireless carriers. AT&T and Verizon have argued that Title II will harm investment, and so has T-Mobile CEO John Legere. Some Verizon investors say the company is harming its reputation by opposing the FCC on net neutrality—though Verizon CFO Francis Shammo struck a blow to the credibility of his own company’s position by admitting that Title II won’t affect how the company invests in its wireline and wireless networks.