The reason why I'm saying this is that it is not directly fear - it is justice which indirectly inspires fear of retribution if the rules are broken. A better term would be respect. Fear without fairness breeds rebellion. Just using the word "fear" without precising what I have said makes Machiavelli prone to misinterpretation. The issue is probably not with his original ideas, but with the lack of precision in language used that can make him easily misunderstood.
Finally, is it better to be feared than to be loved? It is irrelevant: it is better to be respected.