Business Take: FCC's Net Neutrality Rules Good for ISPs, Bad for Streaming Content, Consumers

The FCC wants to change how the internet works (at least as far as how some information flows over it) and that might be good for internet service providers but it's not good for everyone.

May 5, 2014 at 5:57AM

The Federal Communications Commission is voting later this month on rules that will have a major impact on Internet service providers like Comcast (NASDAQ:CMCSK), as well as streaming content companies including Netflix (NASDAQ:NFLX)

In the first episode of Business Take, the show that gives you the Foolish perspective on the most important business stories of the week, host Jason Hellmann is joined by Fool contributor Daniel Kline. The two kick off the show with a discussion of the proposed net neutrality laws -- what net neutrality, and how the ruling might affect businesses and consumers. 

Dan opens the episode with a quick primer on net neutrality, explaining that it's the idea that every piece of content gets to travel over the Internet, with the ISPs having to provide equal access. Those rules changed in January, he explains, when the FCC lost a court ruling that makes it legal for ISPs to treat digital traffic differently.

That includes giving the ISPs the ability to charge companies like Netflix to guarantee quality access to the ISP's customers. That policy, which has resulted in paid deals between Netflix and both Comcast and Verizon (NYSE:VZ), is a quasi-law at the moment and the FCC will vote May 15 to make it official.

Hellmann probed Kline on the term "commercially reasonable," which is the cornerstone term of the new rules. Under the proposed rules, the ISP can charge for access deals as long as it offers the same deals to anyone willing to pay. The two discussed how this is a potential boon for Comcast and other ISPs and a drag on the streaming content companies.

At the end of the day, it's the end user -- the ISP and streaming content company provider -- who will most likely pay. Hellmann also asked Kline about the upcoming Neflix price increase and the two discussed how net neutrality rules factor in. 

Watch the video below, then it's your turn to weigh in using the comments box below. Do you agree with the FCC? Do you think the old complete net neutrality concept should be reinstated? Is this news really good for ISPs or is a backlash possible? 

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Daniel Kline has no position in any stocks mentioned. Jason Hellmann has no position in any stocks mentioned. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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