Obama Pushes For Net Neutrality, Cable Stocks Drop

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.

2 comments about "Obama Pushes For Net Neutrality, Cable Stocks Drop".
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  1. Edmund Singleton from Winstion Communications, November 11, 2014 at 8:51 a.m.

    I had this image of a women wanting to bake some cakes, but found that she could not get her oven hot enough to perform the task because, she later learned, the giant bakery down the street paid the gas company extra fees to increase their allotment of gas to run their one hundred ovens to bake their cakes. She thought if only there was such a thing as ‘gas neutrality’…

  2. Jonathan Latzer from MarketJon, November 11, 2014 at 10:19 a.m.

    Is it possible that one morning I'll get up and turn on my lights and they will be dim because the office building whose owner has paid my electric company a zillion dollars to get better lighting has a bigger vault then mine?

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