Calm Under Pressure: Comcast Shareholders Brush off Net Neutrality Probe
But investors could find those issues harder to brush off in the future if regulators end up siding with Comcast's opponents and making significant rulings against the company.
To begin with, the Consumers Union, which publishes Consumers Reports, launched a new campaign Tuesday to oppose Comcast's deal to buy NBC Universal. The campaign includes mobile billboard sporting an image of a television cable squeezing the life out of a television. "A combined Comcast-NBC could lead to higher prices for consumers and further consolidation of media choices," Parul P. Desai, policy counsel for the Consumers Union, said in the Consumer Reports Electronics Blog.
Also on Tuesday, The Wall Street Journal reported that Federal Communications Commission chairman Julius Genachowski has asked for more information on the dispute between Level 3 and Comcast. Level 3, which distributes both Internet traffic and content like Netflix's streaming movies, filed an FCC complaint over a fee to allow Level 3 to deliver content to Comcast users.
Net Neutrality at Stake
On Monday, Level 3 Communications released a statement alleging that Comcast was unfairly charging it an additional fee to transmit its content over the Comcast cable network. Comcast responded by accusing Level 3 of engaging in unfair business practices. In a blog post by senior vice president Joe Waz, Comcast argued that because Level 3 traffics a higher volume of streaming video content from Netflix, it places a higher level of stress on its cable system and therefore Level 3 should pay higher fees. TechCrunch gives a more detailed account of the arguments each company makes about Internet access and who should pay for it.
Aside from Level 3, Comcast also faces a dispute with another partners also over its fees. Cable modem supplier Zoom Telephonics (ZMTP) also lodged a formal complaint with the Federal Communications Commission on Monday over Comcast's fees for testing modem compatibility. Comcast has yet to comment on the Zoom Telephonics complaint filed with the FCC.
Both Level 3 and Zoom contend that the additional fees from Comcast will likely result in higher prices for consumers. But neither company's shares were affected by the fee fight Tuesday, ending the day unchanged at $1 per share for Level 3 and 30 cents per share for Zoom.