Cable stocks tumble on broadband regulation worries

NEW YORK (BestGrowthStock) – Shares in major U.S. cable companies fell on Thursday because of concerns that the U.S. government plans to assert more control over broadband policy.

Shares of the No. 1 U.S. cable company Comcast Corp (CMCSA.O: ) fell as much as 4 percent, while shares of No. 2 operator Time Warner Cable Inc (TWC.N: ) shares dropped by as much as 6 percent in early trading. Cablevision Systems Corp (CVC.N: ) shares fell as much as 5 percent.

The U.S. Federal Communications Commission is expected to announce on Thursday its plans to regulate the broadband Internet market, reasserting powers that were thrown into doubt by a recent court ruling.

Wall Street analysts and investors worry that Internet providers could be restricted in how they manage their networks, preventing them from making as much return as possible on their investments in building broadband networks.

FCC Chairman Julius Genachowski is seeking to walk a line between making a bold broadband policy and taking too much control over Internet service providers, a move that could prompt legal action from companies like Comcast and Verizon Communications (VZ.N: ).

Reports of Genachowski’s plans to seek a “third way” created uncertainty, Bernstein Research analyst Craig Moffett said in a note published late on Wednesday.

“Markets abhor uncertainty,” he wrote. “Today we got uncertainty in spades.”

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(Reporting by Yinka Adegoke. Editing by Robert MacMillan.)

Cable stocks tumble on broadband regulation worries