Net neutrality was the hot topic among internet service providers like Comcast Corporation (NASDAQ:CMCSA) and content owners like Netflix, Inc. (NASDAQ:NFLX). The biggest question ahead of the FCC’s voting on new Net neutrality regulations on Thursday was, who will it favor, the ISP’s or the content owners. CNBC’s Morgan Brennan looked at impact on stocks like Comcast Corporation (NASDAQ:CMCSA) and Netflix, Inc. (NASDAQ:NFLX) due to the new FCC regulations.
Brennan said that the effect of net neutrality on ISP’s and content owners can be understood by looking at two stocks, Comcast Corporation (NASDAQ:CMCSA) and Netflix, Inc. (NASDAQ:NFLX). She added that Comcast Corporation (NASDAQ:CMCSA) is the biggest ISP in United States. The new FCC regulation says that the internet will be reclassified as telecommunication, which means that there is no way the ISP’s can favor one content over the other for money. This will come as a big blow for ISP’s like Comcast Corporation (NASDAQ:CMCSA), which was indicated by 0.97% drop on Thursday.
On the other hand, video streaming service like Netflix, Inc. (NASDAQ:NFLX) will benefit from this as they will get equal bite at the internet service without any addition payment to favor its contents. This was also indicated in the stock, as Netflix, Inc. (NASDAQ:NFLX) stock went up by 0.94% on Thursday.
“[..] since these rules meaning, internet will be reclassified as a telecommunication service, in other words going to be regulated as a public utility, that means internet service providers like Comcast are going to be more regulated as well. That’s why you are seeing Comcast shares falling, not taking a look at Netflix, you are seeing that stock up about 1% today. It has been one of the biggest proponents of net neutrality rules, and basically these rules mean that streaming services won’t be charged any more in that last mile of delivery to consumers. It won’t be charged more than other companies. That why we are seeing this stock rise,” Brennan reported.
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