With President Obama coming out in favor of strengthening so-called “net neutrality” rules, cable system stocks took a hard tumble on Monday.
In midday trading, those cable companies -- which also have a strong and growing broadband business -- witnessed steep declines. Comcast was down 4.2% to $52.86; Time Warner Cable gave up 4.5% to $137.10; Charter Communications tumbled 5.2% to $148.21; and Cablevision Systems lost 1.5% to land at $18.63.
Obama wants the Federal Communications Commission to install stronger rules around net-neutrality -- almost like a public utility.
Obama is asking that Internet service be reclassified under Title II of the Telecommunications Act: "In plain English, I'm asking them to recognize that for most Americans the Internet has become an essential part of everyday communication and everyday life."
The President says Internet providers “should make it clear that whether you use a computer, phone or tablet, internet providers have a legal obligation not to block your access to a website."
Cable companies want to be able make deals for higher prices with Internet programmers and content providers that would provide so-called “faster” lanes for customers to access. For example, Netflix has made deals with Comcast and Verizon.
Analysts believe smaller cable operators who sell broadband service could be the most affected, should new net-neutrality rules take effect.
Bigger and more diversified communications companies' stocks such as Verizon and AT&T, companies, that
also sell broadband/
wireless services, were relatively unaffected. AT&T stock was up 0.5% to $35.10; Verizon’s stock was virtually flat, down 0.06% to $50.83.