CMCSA to Offer Streaming Video, Suddenly OK With Net Neutrality

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Comcast Corporation (NASDAQ:CMCSA), one of the biggest cable providers on the planet, is plotting to launch a comedy-themed streaming video service later this year, according to the Wall Street Journal.

comcast corporation cmcsa streaming video plans highlight net neutrality hypocrisyNBCUniversal, a division of Comcast, will offer the subscription service for $2.50 to $3.50 per month, and it will carry full episodes of iconic comedy programs like The Tonight Show and Saturday Night Live.

I’ve gotta hand it to CMCSA, that’s a pretty good one.

If you’re into dark humor, Comcast’s age-old opposition to net neutrality and subsequent entry into streaming video is comedy gold.

Comcast Was OK With Throttling Netflix

Net neutrality, the concept of internet service providers (ISPs) treating all web traffic the same, has been vocally opposed by ISPs for years.

Recently, because the current laws surrounding net neutrality are murky and inadequate, CMCSA took advantage of its monopolistic presence as an internet provider by doing something that amounted to a legal version of extortion.

Today, what Comcast did presumably wouldn’t be allowed, after the Federal Communications Commission ruled in favor of reclassifying broadband internet as a telecommunications service. What does that mean? It means the FCC won’t allow ISPs to charge one content provider more than another for “fast lanes” to their customers … like Comcast did just last year.

Comcast slowed the speeds of Netflix, Inc (NASDAQ:NFLX) to a crawl for its customers, demanding that NFLX pay CMCSA if it wanted better speeds again. One can’t really watch streaming video in fits and starts, and with a 56% market share of broadband internet, CMCSA is a gatekeeper to a significant revenue stream for NFLX.

As negotiations dragged on, the speed of NFLX for Comcast customers steadily waned. Then, after Neflix yelled “uncle” and agreed to pay CMCSA an undisclosed sumNetflix speeds immediately skyrocketed.

Now, as cord-cutting intensifies — CBS Corporation (NYSE:CBS), Time Warner Inc (NYSE:TWX), Viacom, Inc. (NASDAQ:VIAB) and Dish Network Corp (NASDAQ:DISH) have all announced online subscription video services — CMCSA is desperately throwing together its own service.

And it’s a fine time to throw your hat in the ring, since ISPs have no leeway to upcharge content providers, no matter how much bandwidth they gobble up.

Now CMCSA Is Protected From Being Throttled Itself

You certainly can’t accuse Comcast of being blind to opportunity.

After the beefed-up net neutrality rules implemented last week, CMCSA can safely launch its own streaming video service without fear of being throttled by a competing ISP like Verizon Communications Inc. (NYSE:VZ) or AT&T Inc. (NYSE:T).

The truth is, even without the FCC ruling, CMCSA wouldn’t be afraid of getting throttled. CMCSA knows its monopolistic strength — which will only grow upon approval of the Time Warner Cable Inc (NYSE:TWC) merger — and it plans on using that dominance to shove its own content down users’ throats.

While CMCSA is looking to successfully navigate the regulated days of the internet after prospering in the Wild West days, it now faces a much larger problem.

Comcast isn’t sweating the impact other ISPs can have on the success of its new service, especially given its overwhelming market share. Comcast will probably own enough of the market to comfortably deliver its own video services to its customers, but without fear that competitors could meaningfully impact its success. This dynamic begs for an antitrust suit and could have grave implications for CMCSA stock moving forward.

Pass the popcorn. I can’t wait to see how Comcast plays this.

As of this writing John Divine held no positions in any of the stocks mentioned. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/03/comcast-corporation-cmcsa-streaming-video/.

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