NEW YORK (TheStreet) -- President Obama jumped into the debate over so-called net neutrality on Monday, and in the process sent stocks of the company's largest cable-TV operators tumbling.
Shares of Comcast (CMCSA) , Time Warner Cable (TWC) and Charter Communications (CHTR) fell after the White House issued a statement calling on the Federal Communications Commission to issue rules to guarantee a "free and open Internet." Obama said that the Internet should be regulated in a manner similar to the way in which the FCC oversees telephone service.
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Comcast, the country's largest cable-TV operator, was falling 3.3% to $53.34 while Time Warner Cable was dropping 3.9% to $138.07. Comcast and Time Warner Cable are awaiting a ruling from the FCC over their all-stock merger proposal that is valued at $45 billion. The FCC is likely to issue a decision early next year. Charter, based in St. Louis, was losing 4.1% to $150.01.
Obama urged the FCC to issue the "strongest possible rules" to ensure that Internet providers cannot sell "fast lanes" to providers able to pay higher fees. Comcast and other pay-TV providers have said the government shouldn't be allowed to regulate the fees they charge corporate or individual users to access their broadband networks.
Consumer advocates argue that smaller companies and competitors to dominate Web service providers would unfairly benefit if Internet service providers are allowed to establish tiered-plans that prioritize their traffic.
"Simply put: No service should be stuck in a 'slow lane' because it does not pay a fee," Obama said. "That kind of gatekeeping would undermine the level playing field essential to the Internet's growth. So, as I have before, I am asking for an explicit ban on paid prioritization and any other restriction that has a similar effect."
Although FCC Chairman Tom Wheeler said he agreed with Obama that the Internet access should be "free and open," he stopped well short of agreeing that Internet should be regulated along the lines of electricity, water and telephone service.