Obama's call for net neutrality spells trouble f

Obama's call for net neutrality spells trouble for Time Warner Cable-Comcast deal

U.S. President Barack Obama listens to Australian Prime Minister Tony Abbott speak during a bilateral meeting Monday, Nov. 10, 2014 in Beijing. Obama is in China to attend the Asia-Pacific Economic Cooperation (APEC) Summit. (AP Photo/Pablo Martinez Monsivais)
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U.S. President Barack Obama listens to Australian Prime Minister Tony Abbott speak during a bilateral meeting Monday, Nov. 10, 2014 in Beijing. Obama is in China to attend the Asia-Pacific Economic Cooperation (APEC) Summit. (AP Photo/Pablo Martinez Monsivais)

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The fight for an open Internet just got a lot stronger, as President Obama waded into the fray and issued a call for utility-style regulation to limit the power of phone and cable companies.

The president isn’t likely to get his way entirely, with strong opposition already coming from those industries and Republicans in Congress. But Obama's move also reduces the odds that regulators will approve Comcast's (CMCSA) $45 billion take over bid for Time Warner Cable (TWC).

The Federal Communications Commission, headed by Obama appointee Thomas Wheeler, has been working on new “net neutrality” regulations after courts struck down previous efforts intended to prevent Internet service providers from discriminating against web sites and other online content. Without such protection, regulators fear companies that dominate delivering Internet connections to consumers will be able to thwart new services and stymie innovation. The FCC, which has received almost 4 million comments on its open Internet proceeding, isn't expected to take action until next year.

"I believe the FCC should create a new set of rules protecting net neutrality and ensuring that neither the cable company nor the phone company will be able to act as a gatekeeper, restricting what you can do or see online,” the president said in a surprise statement on Monday. Cable and phone companies should be banned from slowing down or blocking web sites and services, as well as charging more to give some faster access to consumers, Obama said.

Stocks of leading cable and telecom carriers quickly dropped as much as 7% before recovering somewhat. Time Warner Cable, Comcast and Charter Communications (CHTR) were down 4% or more each at midday, while Cablevision Systems (CVC) lost 2%. Shares of Netflix (NFLX), a poster child for net neutrality after it was forced to pay some big Internet providers for better connections to its customers, gained almost 1%.


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