Dear Mr. Berko: I’m a shareholder of Charter Communications, CenturyLink and Comcast. I have big profits in Charter Communications and Comcast and a small loss in CenturyLink. I don’t understand this new “net neutrality” regulation thing. It seems that this industry has gotten along for decades without government regulation. As you know, these are some of the largest Internet service provider stocks, and I’m concerned about how the FCC’s new rules will affect these stocks — especially Comcast, which I bought at $12, and Charter Communications, which I bought at $33 in 2009.
I have no profit in CenturyLink, but it has a good dividend. Please explain net neutrality to me. Is it good, or is it bad? This really worries me, and I wonder whether I should sell any of the three issues I own.
NS, Punta Gorda, Fla.
Dear NS: In Spanish, “punta gorda” sounds like a grossly overweight lady of the evening. However, Punta Gorda, Florida, is a lovely town along the Peace River, about a 100-minute drive south from Tampa. It’s a cozy upper-middle-class retirement community of 20,000 friendly folks on Florida’s west coast. And everyone seems to own a computer.
Net neutrality prevents Internet service providers from moving data or content faster than other data or content and prohibits the providers from entering into paid agreements with companies such as Netflix and Amazon.com to prioritize their data. Most broadband providers — such as Charter Communications, AT&T, Verizon, Cox and Comcast — are uncomfortable with this idea.
These companies have invested billions in sophisticated infrastructure and don’t want Washington bureaucrats telling them how to run their business or package their services. After decades of independence, trouble-free growth and innovation for these companies, Washington’s inexorable need to regulate will be a hard blow to swallow. And as an honest auto mechanic would say, if it ain’t busted, don’t fix it.
I’m familiar with many of the pros and cons of net neutrality.
I’ve read good articles supporting both sides of the argument and talked with several knowledgeable industry people, but I’m still undecided. Therefore, I’m bending overboard to be fair because I don’t have enough understanding of net neutrality to form a conclusion. So either the snake in the grass is barking up the wrong tree or it’s time to grab the bull by the tail and look it in the eye.