“This is just another very prime example of the intensity in the competition in this industry,” Shammo said of Google. “This is another reason why this industry does not need to be regulated.”
Google plans to buy wholesale access to Sprint and T-Mobile’s voice and data networks in order to sell mobile service plans directly to customers, according to a report this week in The Information. The search giant may be experimenting with ways to deliver its over-the-top services directly to consumers in anticipation of coming rate impositions from carriers.
With a vote expected Feb. 26, the Federal Communications Commission is considering reclassifying consumer broadband service as a Title II regulated utility, limiting carriers’ ability to charge over-the-top services and content providers for faster speeds. Proponents of net neutrality argue that charging for faster speeds would disadvantage websites and other content providers who cannot afford the fees.
Carriers are strongly opposed to the proposed move, which they say vastly diminishes their incentive to upgrade their network infrastructure.
“Title II is an extreme and risky path that will jeopardize our investment and the development of innovation in broadband Internet and related services,” Shammo said. “This will absolutely affect us and the industry on long term investment in our networks.”
Shammo’s remarks came as Verizon reported fourth-quarter earnings, which were in line with expectations despite net losses on high one-time costs. For the full year of 2014, Verizon reported per share earnings of $2.42, compared with $4.00 in 2013. Adjusted earnings per share were $3.35 for 2014, an 18 percent increase.
Shammo seemed dismissive of Google’s potential to threaten Verizon’s core business, noting the significant infrastructure and manpower investments needed to operate a consumer-facing mobile service plan.
“Their whole purpose is to increase speeds so people can do more search,” Shammo said. “Google’s going to enter the market on a platform basis to do what they want to do, and it’s just another competitor as we look at it.”