Net neutrality will slow investments: Sununu

Great net neutrality debate
Battle over broadband
Net neutrality: Writing on the wall?

While an anticipated regulation of Internet service providers will not bring investment in communications infrastracture to a halt, it will most certainly affect how much money is spent and where it is invested, former Sen. John Sununu told CNBC on Wednesday.

"It's a question of will it change the return potential on that investment and as a result will it alter the rate of investment, or even the areas where the money is invested, and there's no question the answer will be yes." the former George H.W. Bush chief of staff said in a "Squawk Box" interview.

Sununu is now the honorary co-chair of telecommunications industry trade group Broadband for America and is a Time Warner Cable board member.

The FCC is expected to enforce net neutrality on Thursday after Democrats rallied behind President Barack Obama to back the policy, The New York Times reported on Tuesday. That vote will force Internet service providers to treat all Internet traffic the same, barring them from charging higher rates for faster delivery of data such as streaming video.

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Congressional Republicans indicated they would not pursue legislation in response to an FCC vote in support of net neutrality, citing inadequate support from Democrats on Capitol Hill.

Sununu said it was "crazy" to suggest regulation of this magnitude would not lead to uncertainty in investment spending.

The regulations proposed by the FCC amount to a "light touch," said Michael Beckerman, president and CEO of the pro-net neutrality Internet Association. Those regulations are based on Title II of the 1934 Communications Act, which would give the agency authority to regulate Internet service providers in the same way it oversees telephone utilities.

"We're not talking about the full power of Title II, utility-style regulation. They're talking about a few small sections of Title II," he told "Squawk Box."

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The debate around net neutrality should address the end result for Internet users and start-up tech companies, he added. Net neutrality supporters fear that charging companies for access to so-called fast lanes would prevent young companies from competing with the likes of Netflix and

While the FCC has stated it would not enforce sections of Title II that regulate price and distribution of content, those sections could still technically be applied, Sununu said.

"Anyone who thinks the government bureaucrats are going to take this big new regulatory power and not ultimately use it is really fooling themselves," he said.

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He insisted that the debate is not necessarily about net neutrality, but regulatory power. The industry supports principles of net neutrality such as banning providers from blocking Internet traffic and charging for prioritization, he said, but they can be accomplished in smarter ways, such as through legislation and regulation tailor made for the Internet.

Beckerman noted a recent FCC study found that 75 percent of Americans have no choice of Internet service providers due to lack of competition in the industry. Some fear that could mean consumers would remain locked into their service even if changes to the way providers manage traffic lead to poor access.

Disclosure: NBCUniversal parent Comcast is currently in agreement to buy Time Warner Cable.