The Federal Communications Commission's June 2015 net neutrality rules that ban Internet providers from selectively blocking or slowing websites, or charging more for faster relaying, are about to change.
On Dec. 14, the five-member FCC board, consisting of three Republicans, two Democrats, and chaired by Trump appointee Ajit Pai, is expected to vote along party lines to roll back the Obama-era rules.
Repealing net neutrality under the banner of deregulation clears a fresh path for Internet access providers to make money in new ways.
Ultimately, that means making money from consumers. But luckily, there's a way for us consumers to make some money too.
Here's where net neutrality is going and how you can profit alongside the companies who will be major beneficiaries...
The End Is Nigh
New FCC Chairman Ajit Pai, a former associate general counsel at Verizon Communications Inc. (NYSE: VZ), has made rolling back net neutrality regulations a "priority," citing claims that it has "stifled innovation" and epitomizes "government overreach."
The FCC vote is ancient history, and new rules will take effect in early 2018. But… not everyone's taking this lying down. Legal briefs challenging the U-turn are already being prepared.
According to Blake Reid, a clinical professor at Colorado Law, broadband providers will likely wait to see how legal challenges to new FCC orders go. "They'll probably keep an eye on 2018 and even 2020 elections as well. The courts could shoot down the FCC's order, or, given enough public pressure, Congress even could pass new net neutrality laws," Reid says.
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In the meantime, Internet access providers don't have to wait for legal challenges to whatever new rules will be enacted, and probably won't.
Besides, they've already gotten around some of those rules (legally, of course).
For example, Verizon tries to drive users to their own apps by exempting them from mobile data limits. The same goes for AT&T Inc. (NYSE: T) customers when they access the AT&T DirecTV Now video-streaming service, and T-Mobile U.S. Inc. (Nasdaq: TMUS) allows multiple video and music streaming services to bypass its data limits.
Steering consumers to company-owned content by packaging them in data plans has become an acceptable sidestep of net neutrality rules.
Proposed new rules let Internet service providers freely block content, slow video-streaming services from rivals, and offer "fast lanes" to preferred partners, giving them an exponentially greater level of control of channels, cost of access, and speed of content across the Internet.
In the future (which could be as soon as next year), Internet services could mimic cable-TV packages. Subscription packages could be limited to certain sites and services. Of course, for a few dollars more, subscribers will be able to add to their menu items - and, for another fistful of dollars, maybe have unlimited access to everything at the speed of... whatever you're willing to pay for.
Net neutrality advocates adamantly maintain that directed offerings by access providers harm competition, especially smaller providers trying to offer competing access services and content, and app providers who are easily disadvantaged. Most of all, they maintain that it will harm consumers, whose choices drift further from their control.
Three Companies to Buy In to Now
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While companies like Netflix Inc. (Nasdaq: NFLX), Amazon.com Inc. (Nasdaq: AMZN), and Alphabet Inc. (Nasdaq: GOOGL) are against overturning net neutrality rules, they at least have the money to pay higher fees to get their content delivered at the fastest streaming rates they'd be charged.
Smaller companies won't be able to pay up. Their content could potentially be delivered more slowly or not at all.
Ultimately, consumers will bear the burden of increased costs, whether they're pass-through charges from the likes of Netflix or direct charges for access to competitors' content at a preferred speed.
Along with promising to overturn net neutrality, the FCC wants transparency under the new rules to assure consumers, websites, and app developers that they won't be arbitrarily disadvantaged.
That transparency calls for the Federal Trade Commission (FTC) to act as referee and enforcer.
If a provider blocks or slows certain websites, or gives preferential treatment to content it owns, that provider would have to inform consumers of its policy on an easily accessible website. And if service providers, content providers, and consumers aren't satisfied with that and claim any kind of anticompetitive behavior, they'll have to take it to the FTC.
Ready to do its part, on the heels of the FCC's announced upcoming vote, the FTC's acting chairman Maureen Ohlhausen stated, "The FTC stands ready to protect broadband subscribers from anticompetitive, unfair, or deceptive acts and practices just as we protect consumers in the rest of the Internet ecosystem."
The bottom line is consumers are going to pay more for access, packages, and speed, no matter what the FTC says or does.
That might be OK if you know how to make money off the FCC's pending changes to everyone's access to the Internet, its content, and speed of delivery (especially for all you mobile junkies).
There are going to be companies, especially content manufacturers, whose stocks are going to dip on the prospect of increased costs to access what they offer at desirable speeds.
Those dips are going to be buying opportunities.
With the ability to package preferential (company-owned) content at desirable speeds and reduced data charges, big broadband companies will be looking for acquisitions. The end of net neutrality will open up the merger and acquisition floodgates, and knowing which companies are going to make it onto buyers' lists can make you a lot of money.
I'll be pointing out who's in play as soon as the new rules are published.
In the meantime, buying the big Internet providers - AT&T, Verizon, and T-Mobile - is a no-brainer.
They're going to be growing their offering menus and their revenue from pending deregulation.
Besides, what's not to like about owning a couple of giant revenue-rich communications utility companies that throw off juicy dividends?
Meanwhile, I'll be showing Zenith Trading Circle members how they could accelerate their profits by trading on opportunities like these. In fact, the longer you wait to join, the more opportunities you're missing out on.
Steve L. from Georgetown, Texas, wrote in about his very first Zenith trade, where he made a fat 267%. Thank you, Steve; I love hearing from members like you.
For everyone else, you still have time to get my next trade recommendation when you join now.
You can trust that I will be following the developments in this story very closely.
You can take down extraordinary gains when you understand how Wall Street really works. Shah's been on the inside, and in his free, twice-weekly Wall Street Insights & Indictments, he reveals how to trade the bigger picture for maximum returns. To get his insight and start beating the Street, just click here.
The post Here's How the Average Consumer Can Profit from the End of Net Neutrality appeared first on Wall Street Insights & Indictments.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.