Broadband Providers Say Government Intervention Is Not The Answer In Net Neutrality

Though the Federal Communications Commission's vote to reclassify the internet as a utility was regarded as a win by the general public, not everyone is cheering the decision.

As expected, big name providers are threatening lawsuits and condemning the new rules saying that the fight isn't over "net neutrality", but government control.

Here Come The Lawsuits

AT&T, Inc. (NYSE: T), Time Warner Cable (NYSE: TWC) and Comcast Corp (NYSE: CMCSA) are just some of the broadband providers who have vowed to take legal action regarding the decision.

Once the rules become official later in the year, the U.S. can expect to settle in for a drawn-out lawsuit as providers challenge the FCC ruling.

Reduced Investment

Comcast took its threats one step further, with the company's Executive Vice President David Cohen remarking that the company may reduce planned investment in its network in the coming years because of the increased government scrutiny.

However, most believe that Cohen's statement was an empty threat as one stipulation of the proposed merger between Comcast and Time Warner is increased investment in the company's network.

Related Link: Internet Regulation Vote Unlikely To End Net Neutrality Fight

Verizon Says Net Neutrality Not The Issue

Verizon (NYSE: VZ) drew attention to the fact that the new rules could stifle innovation moving forward as government regulation makes it more difficult for companies to update their networks.

The company issued a press release written completely in Morse code to underscore Verizon's view of the "badly antiquated regulations."

Verizon, along with several other big name providers, claims the FCC has the power to protect net neutrality without fully reclassifying the internet and subjecting networks to intense government regulations.

Internet Service Loses Its Luster

Following the decision markets were relatively calm, but if the ruling stands broadband providers are likely to begin losing value.

The new rules could make providing internet services much less lucrative and the uncertainty surrounding how future lawmakers will use their power over pricing models and network development could become a concern.