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Net Neutrality Tested by Comcast-Level 3 Netflix Dispute

Netflix Inc. (Nasdaq: NFLX) - the web-based DVD rental company - is locked in a row with Comcast Corp. (Nasdaq: CMCSA) that could have significant implications for the management of the Internet as a whole.

At the heart of the conflict is Level 3 Communications Inc. (Nasdaq: LVLT), a little-known network operator that handles Netflix content. Comcast has increased the fees it charges Level 3 to carry streaming Netflix videos over its cable network. That decision goes against conventional principles of so-called "network neutrality," under which network operators exchange traffic for free when similar amounts of information flow in each direction. Such exchanges are known as "peering."

Net neutrality also prohibits network owners like Comcast from discriminating against Internet companies by blocking or slowing access too their content.

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Investment News Briefs

With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.

Sovereign Fund Attempts to End $7.5 Billion Citi Share Purchase; Credit Suisse to Pay U.S. $536 Million Penalty; Cohen: U.S. Economy to Slow in 2010; Roy Disney Dead at 79; Former TPG, Lazard Employees Sued by SEC for Insider Trading; Galleon Group Founder Indictment Alleges Fraud, Conspiracy; Comcast Launches Online TV Service

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With NBC Deal Done, Comcast Becomes the New Cable Juggernaut

Comcast Corp. (Nasdaq: CMCSA) will acquire a 51% stake in General Electric Co.’s (NYSE: GE) NBC Universal Inc. for $13.75 billion in cash and assets, giving the cable giant lucrative cable channels including SyFy, Bravo and the USA Network, as well as Universal Pictures and its related theme parks in California, Florida and Japan.

But for GE, the deal is a precursor to and eventual exit from the media business.

"This isn’t just one of the biggest media deals, this is arguably one of the biggest M&A deals in years," Wunderlich Securities Inc. analyst Matthew Harrigan, who recommends buying Comcast shares, told Bloomberg News.

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GE Sets Up Comcast Venture With Buy of Vivendi's NBC Universal Stake

General Electric Co. (NYSE: GE) cleared the way for Comcast Corp. (Nasdaq: CMCSA) to take control of its NBC Universal unit yesterday (Tuesday) when it reached agreement with Vivendi SA to buy the French company's 20% stake for $5.8 billion.

GE Chief Executive Officer Jeffrey Immelt and Vivendi Chief Jean-Bernard Levy agreed on a price after they met in France last week, according to multiple sources cited by Reuters and Bloomberg News.

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Hot Stocks: Comcast Looks to Expand Its Brand with Potential NBC Universal Takeover

With a possible buyout of General Electric Co.'s (NYSE: GE) NBC Universal Inc. in the works, Comcast Corp. (Nasdaq: CMCSA) is adapting to a changing technological landscape.

Comcast, the United States' largest cable television provider, is hoping to avoid becoming the next newspaper or record company by expanding its role from an entertainment medium to a content provider.

"The world of cable delivery is about to change," Forrester Research (Nasdaq: FORR) analyst James McQuivey told the Los Angeles Times. "Cable companies for years have made their living by selling consumers hundreds of television channels bundled together. But the future is going to be very different, and cable companies instead will be selling an 'entertainment experience.'"

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Investment News Briefs

With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. AIG Selling Taiwan Life Insurance Unit; Source: Comcast Proposes NBC Universal JV; China Auto Sales up 78% in Sept.; Whitney Cuts Goldman to Neutral; Bank of America Turns over Merrill […]

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