Yesterday's U.S. Court of Appeals decision on net neutrality, if it is not
appealed to the Supreme Court by the FCC, is a long-term positive for cable and
telecom providers that removes regulatory restrictions on potential data
services business models, according to Fitch Ratings.
On Jan. 14, the U.S. Court of Appeals for the District Court of Columbia
Circuit vacated the anti-blocking and anti-discrimination portions of The
Federal Communications Commission (FCC) Open Internet (net neutrality) Order,
which had been issued in 2010. The order had compelled broadband services
providers, such as cable and telecom operators, to treat all Internet traffic
equally regardless of source. The order had been appealed by Verizon
Communications Inc. (Verizon). The Court did uphold the FCC's authority to
regulate the broadband providers' network management practices.
Operators now have greater freedom to experiment with new business models,
charging edge providers of content (such as Netflix) fees for faster data
services. The overturned net neutrality rules were forwarding looking,
essentially designed to prevent the carriers from instituting practices
considered restrictive by edge providers, rather than curtailing existing
products and services. Therefore, Fitch believes the ruling's near-term impact
on companies' operating profits and cash flows will be minimal.
No comments:
Post a Comment