Cisco CEO Chambers: Obama Internet Plan a Bad Idea

By Jeffrey Burt  |  Posted 2014-11-12 Print this article Print
John Chambers

John Chambers says that the president's call for greater regulation of the Internet would slow innovation and hurt business.

Cisco System CEO John Chambers is not a fan of President Obama's net neutrality views.

During a conference call with analysts and journalists Nov.12 to talk about his company's quarterly financial earnings, Chambers said the president's views that the Federal Communications Commission (FCC) should more closely regulate high-speed Internet providers to ensure they treat all traffic equally would hinder innovation and slow the development of the Internet.

"It would be a very disappointing end result if we moved back to regulation of the Internet like we did voice many decades ago," the CEO said. "If [Internet service providers] can't make money on broadband, they won't build it out."

Obama made his views known Nov. 10, saying he wants the FCC to include ISPs under Title II of the Communications Act, which would enable the agency to regulate the Internet as a public utility, similar to how telephone companies are regulated. The issue of net neutrality centers around the idea that carriers like AT&T and Verizon could charge more to content producers willing to pay for faster Internet speeds.

 "We cannot allow Internet service providers to restrict the best access or to pick winners and losers in the online marketplace for services and ideas," Obama said in a statement released by the White House. "That is why today, I am asking the Federal Communications Commission to answer the call of almost 4 million public comments, and implement the strongest possible rules to protect net neutrality."

However, FCC Chairman Tom Wheeler—who was appointed by Obama to the position last year—reportedly disagrees with the president, preferring a less extreme approach. So does Chambers, adding that it's important for both service providers and the rest of the world to see the United States get it right on the issue of net neutrality.

The country to this point has ensured "the right amount of competition that allowed companies to make profits, and the right amount of government regulation that allowed them to build out broadband," he said. "They look at us like we’ve got our act together, and here we are thinking about changing it."

The CEO said Cisco will be aggressive in lobbying against any push for net neutrality and urged others in the tech industry to do the same. Otherwise ISPs will start pulling back on spending to grow their networks, and that will have a ripple effect onto the entire tech space.

Chambers' comments came after releasing the company's fiscal first-quarter earnings numbers, noting that while Cisco saw gains in many of its business units, it continued to see weakness in its service provider efforts and in emerging markets. Sales to telecommunications providers fell 10 percent, due in large part to three unnamed large providers that have pulled back on some spending in recent months, Chambers said. He said he suspects some of that has to do with the uncertainty around net neutrality in Washington, D.C.

"We started seeing service providers spending slow a lot less quarter among the three big guys that might be most affected," he said. "I think [politicians and regulators] getting their act together there is key. We do plan to be very aggressive on this and trying to educate people on all sides about why [Obama's plan] is not right for our country."


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