Posted by: Olga Kharif on September 30, 2009
Ever since the Federal Communications Commission ruled last year that Comcast had no right to slow down certain applications, such as file-sharing service BitTorrent, running over its network, the impact of the ruling has been subject of much debate. But has there been much of an impact?
Comcast’s results are still robust: The company’s second-quarter revenues rose 4.5%, and earnings per share climbed 57.1% year over year. Back in the same quarter of 2008, Comcast’s sales and earnings both increased 11%. Even more stringent regulation proposed by FCC Chairman Julius Genachowski on Sept. 21 is unlikely to have much financial impact on the cable industry, according to recent reports from Oppenheimer & Co.’s Tim Horan and Hudson Square Research’s Todd Rethemeier.
The analysts point out that most cable companies abide by the FCC’s proposed rules already. And when forced by regulators to cater to bandwidth-hogging services users, broadband providers can simply charge these heavy users higher fees. The industry has already implemented tiered pricing, in which people who want higher-speed access have to pay more for it. It’s also been experimenting with metered pricing, in which people’s monthly fees are directly tied to how much network capacity they use up. While metered pricing hasn’t found favor with consumers, cable companies could still go for it, and mitigate any negative impact from additional regulation.