Cable stocks up after net neutrality unveiled

News that federal regulators intend to impose tough new net neutralty regulations isn’t scaring off investors.

Stocks for Comcast, Time Warner Cable, Verizon and other Internet service providers all rose on Wednesday, on the heels of news that the Federal Communciations Commission (FCC) would push to treat broadband Internet service like a utility.  

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Stock of Comcast —  the nation’s biggest cable provider — rose more than 4 percent late Wednesday morning, before sliding back down slightly. Time Warner Cable’s stock rose by a similar amount.

Shares of Charter Communciations — the No. 3 broadband provider in the country — increased by more than 6 percent.

The new rules that Chairman Tom Wheeler will circulate to his four other commissioners this week would reclassify broadband Internet service as a “telecommunciations” service under the FCC’s rules, instead of an “information” service, as it is currently treated. That would give the FCC more authority to police Web service providers so that they cannot slow, block or otherwise affect people’s access to the Internet, though the FCC would not be able to enact control over prices, officials said.

Significantly, the FCC’s move would also apply the new rules on people’s wireless access to the Internet through their cellphones and tablets. That’s a new step that the FCC did not take in its previous 2010 rules, which were tossed out by a federal appeals court last year.

Stocks for Verizon, which operates both wireless service and wired broadband Internet, rose by about 1 percent after Wheeler’s announcement, before settling back down to its opening price. Shares of AT&T performed similarly.

Major cable and wireless companies were quick to criticize the FCC’s announcement and have already threatened to sue over the new rules, which the commission will vote on at its meeting on Feb. 26.

Meredith Attwell Baker, the head of CTIA-The Wireless Association, worried that the new rules “could jeopardize our world leading mobile broadband market and result in significant uncertainty for years to come,” because a court challenge is likely to drag on for years.

National Cable and Telecommunciations Association head Michael Powell — who is also the former chairman of the FCC — feared that the rules would “result in a backward-looking new regulatory regime, ill-suited for the dynamic Internet, with far reaching and troubling consequences.”

Powell was unmoved by pledges not to regulate rates and other financial terms, he said, and reiterated support for rules that did not take the polticially controversial step of reclassifing Internet service.