Drama From Obama for Cable Stocks

[Commentary] Cable stocks tumbled after President Barack Obama weighed in on the debate over net neutrality -- the principle that all content on the Internet should be treated equally. In a statement, he advocated that broadband, including wireless, be reclassified as a public utility. A move to fully reclassify broadband, even if it includes “forbearance” from rate regulation, as President Obama suggested, would send investors scurrying, according to Kim Wallace, a policy analyst at Renaissance Macro Research. That is because it would cast doubt on cable and telecom companies’ abilities to generate a sufficient return on capital investments. Government approval of Comcast ’s pending deal to buy Time Warner Cable and AT&T ’s offer for DirecTV could offset that as greater scale would lessen the risks. Even so, the threat of heavier regulation would continue to overshadow the industry.