Cable Shares Sink After Release of President's Net Neutrality Video
"Cable companies can't decide which online stores you could shop at, or which streaming companies you can use," President Barack Obama says
Shares of the companies that provide Internet access mostly took it on the chin Monday as investors reacted to President Barack Obama's support for net neutrality and his request that the FCC regulate Internet service providers as if they were public utilities.
The president weighed in on the issue via a video posted at WhiteHouse.gov. "I am urging the Federal Communications Commission to do everything they can to protect net neutrality for everyone," he says in the video. "They should make it clear that whether you use a computer, phone or tablet, Internet providers have a legal obligation not to block or limit your access to a website. Cable companies can't decide which online stores you could shop at, or which streaming companies you can use."
There have been several unsuccessful attempts to pass laws that ensure some sort of net neutrality by prohibiting ISPs from using variable pricing models depending on the quality of service desired.
The concept of net neutrality is very important to companies that need robust broadband technology to deliver high-quality video over the Internet, such as Netflix, YouTube, Disney and others, and the FCC is set to tackle the issue in some form next year.
Under the assumption that the sort of regulations Obama vaguely proposed Monday would hurt profitability at ISPs, shares of Charter Communications dropped 6 percent, while Time Warner Cable was off 5 percent, Cablevision Systems was down 2 percent and Comcast, which is trying to purchase TWC, was off 4 percent.
Some companies have issued statements against Obama's video.
"The extraordinary growth of broadband service in the United States, which now reaches more than 70 million households, has largely been the result of the current regulatory environment," Charter said Monday. "We strongly oppose the reclassification of broadband as a Title II service under the Telecommunications Act. Efforts to reclassify broadband ignore the fact that the current rules have encouraged billions of dollars of investment in our broadband infrastructure and Americans' access to open, fast, and reliable service has never been greater."