Despite a widening spread on shares of Time Warner Cable Inc. (TWC) following President Barack Obama's endorsement of the toughest net neutrality options on the table, whatever action the Federal Communications Commission takes on the broadband policy isn't likely to have much affect on the company's planned acquisition by Comcast Corp. (CMCSA) .
Comcast has already pledged to adhere to some measure of tougher rules governing broadband providers' carriage of other companies' content and was expected to accept whatever added requirements the FCC would impose as a condition for approving the $67 billion deal. Among those added requirements, some observers have predicted, would be a ban on interfering with content provided by so-called over-the-top TV providers that rely on cable's broadband pipes to deliver content.
Netflix Inc. (NFLX) is the most recognized over-the-top provider but some like Sony Corp. (SNE) and Viacom Inc. (VIA) are planning to offer programming from multiple networks in direct competition to cable.
Following remarks by Obama Monday, the Time Warner spread widened Tuesday to $17.10, or 12.8%. That would represent an annualized return of 33% if the merger closes March 31.
The president said he favored regulating Internet traffic under telephone-style rules authorized by Title II of the Communications Act.
How Internet traffic should be classified is central to how far the FCC, led by Chairman Tom Wheeler, can go in writing net neutrality rules. The FCC is in the middle of writing new net neutrality rules after two previous incarnations were struck down in federal court.