SAN FRANCISCO ( TheStreet) -- Comcast (CMCSA) and other cable stocks took a hit Monday, after President Obama called for reclassifying Internet service providers as a utility. BlackBerry (BBRY) soared on interest in expanding in China, while Alcatel Lucent (ALU) fell on reports that a large telecom customer will be curtailing capital expenditures.
Comcast fell 4% to $52.95 at the close. Earlier in the day, the Philadelphia-based cable company took a hit after Pres. Obama leaned on the Federal Communications Commission to place cable companies and other broadband Internet service providers under the classification of a utility.
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Such a move could dramatically restrict the way cable companies and other Internet service providers operate. One area that the White House is specifically interested in banning is eliminating an arrangement where online services like Netflix (NFLX) or Amazon.com (AMZN) could pay broadband carriers a fee to have their content accessed by users at a faster speed than other online services that do not pay.
The courts in January struck down attempts at enforcing "net neutrality" regulations which would call for ensuring Internet service providers don't play favorites with certain Web sites or content providers. However, the FCC is drafting new net neutrality regulations that would demonstrate it has the authority to regulate the Internet, something that the courts found lacking in its previous set of net neutrality regulations.
It remains to be seen whether Obama's call to reclassify broadband Internet service providers as a utility will kill Comcast's $45 billion buyout of Time Warner Cable (TWC) .
BlackBerry soared 5.3% to close at $11.09. The Canadian smartphone maker got a lift after its CEO John Chen expressed interest in securing partners in China to expand the company's opportunities in that region.
Chen met with Lenovo (LNVGY) CEO Yang Yuanqing, HTC Chairwoman Cher Wang and Xiaomi CEO Lei Jun in China, where he was attending the Asia-Pacific Economic Cooperation CEO Summit. Chen told Bloomberg that BlackBerry may be able to strike licensing, distribution or manufacturing agreements with Chinese companies that are hungry for its security and encryption technology that is on its phones.
Xiaomi and Lenovo are the two largest smartphone vendors in China and Chen indicated that it may make more sense to team up with such partners, given China is a highly competitive market for smartphone makers, according to the Bloomberg report.
Alcatel Lucent fell 4.5% to end the day at $3.17.
Investors in the Paris-based telecom equipment maker were apparently worried that one of its customers will be spending less on its products next year. AT&T's (T) capital expenditures next year would fall short of what Wall Street was expecting by 13.5%, according to a report in Markets Emerging. AT&T is expecting to spend approximately $18 billion on capital expenditures in 2015, whereas its prior guidance was $20 billion.
AT&T spent $21 billion on capital expenditures in 2014, notes Markets Emerging.
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At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
TheStreet Ratings team rates COMCAST CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:
"We rate COMCAST CORP (CMCSA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
You can view the full analysis from the report here: CMCSA Ratings Report