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Speaker 1: I'm Charlie Hell at forty three minutes to go ahead
Speaker 1: of the close. A down day for stocks were brought
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Speaker 1: t F. Now over to the first Word Breaking news
Speaker 1: desk for today's afternoon call. Here he is Bill Maloney.
Speaker 1: Good afternoon, Charlie. US stocks are week again today made
Speaker 1: continued breaks. It fears Dallas currently down seventy one point
Speaker 1: says to be dropped six in as that declines ten
Speaker 1: in Europe. France drop two point three percent, Spain and
Speaker 1: Italy two point one percent. The German ten yield fell
Speaker 1: below zero for the first time, the U small cap
Speaker 1: six hundreds down two points, and the US ten yield
Speaker 1: at one point six one percent. Seven out of tennis
Speaker 1: b sectors are lower, led by losses in financials, materials,
Speaker 1: and energy, gains in telecom, staples and the utilities down.
Speaker 1: Transports drop a hundred and nineteen as a biotechs fall one,
Speaker 1: and the vix is down by point three percent. Down
Speaker 1: Leaders to the downside included American Express, JP, Morgan and
Speaker 1: Home Depot. Leaders included GE, Walmart and Verizon. Credit card
Speaker 1: issuers fell as Secrety financials saw higher right offs. Secrety
Speaker 1: plunge percent the most ever. Airlines were weak again today,
Speaker 1: while Samantic rose another three percent after yesterday's five percent gain.
Speaker 1: Live from the first breaking news desk gone Bill Maloney,
Speaker 1: Charlie all right, thank you very much, Bill Maloney, and
Speaker 1: to hear live breaking news over your Bloomberg type squawk
Speaker 1: s q U A w K on your terminal. I'm
Speaker 1: Charlie Platon death so bred business flash. You're listening to
Speaker 1: taking Stock with Pim Fox and Kathleen Nades on Bloomberg Radio.
Speaker 1: A big win for the Internet today, a federal court
Speaker 1: up held net neutrality regulations designed to ensure an open
Speaker 1: Internet at handed a victory to the BABA administration and
Speaker 1: a defeat to telephone and cable providers here to talk
Speaker 1: to us about net neutrality. What this decision means for
Speaker 1: the large corporations who are driving at what it means
Speaker 1: for consumers is our own match shutting Helm. He's communications
Speaker 1: litigation analyst for Bloomberg Intelligence in Washington, d C. Matt Welcome, Thanks, Kathleen,
Speaker 1: thanks for having me. I love the way you sum
Speaker 1: up what net neutrality is in one of your primers
Speaker 1: on Bloomberg Intelligence. You say it prevents roadblocks, tolls, and
Speaker 1: fast lanes for Internet traffic. And even though Internet service
Speaker 1: providers owner control that infrastructure, the wires or wireless spectrum
Speaker 1: on which Internet traffic travels, neutrality limits those I s
Speaker 1: p s power talk to us about what this means. Sure,
Speaker 1: sure so, so that's exactly right. So the basic idea
Speaker 1: behind net neutrality is that the Internet works best as
Speaker 1: an open highway for for all traffic. And so even
Speaker 1: though your Internet service provider be at a T N
Speaker 1: T or Comcast, or wireless provider Verizon or Sprint, even
Speaker 1: though they own effectively the facilities that bring you the Internet,
Speaker 1: the idea here is that they shouldn't be able to
Speaker 1: exercise total control over all that traffic. And so the
Speaker 1: SEC adopted three rules. It said that I s P
Speaker 1: shouldn't be able to block traffic, it shouldn't be able
Speaker 1: to slow down certain traffic, and it shouldn't be able
Speaker 1: to do UH deals to prioritize certain traffics. So, for example,
Speaker 1: a T and T couldn't cut a deal with Netflix
Speaker 1: to give its traffic faster access to you than another
Speaker 1: video service provider. All traffic should be able to drive
Speaker 1: on the same roads on the same terms, Matt, who
Speaker 1: are on the opposing sides you mentioned A T and T,
Speaker 1: Verizon and Comcast. They might be on one side of
Speaker 1: this debate. Who's on the other side, That's exactly right.
Speaker 1: So so so they have have brought the challenge that
Speaker 1: the Internet service providers on the other side. You have
Speaker 1: the FCC UH that that has adopted this rule, adopted
Speaker 1: these rules, and it's defending those rules in courts. The
Speaker 1: FCC is supported by by Internet type companies, companies that
Speaker 1: that depend on reaching end users and wouldn't want to
Speaker 1: be interfered with by those Internet service providers whose pipes
Speaker 1: they have to ride on. So companies like etc. Twitter, Netflix,
Speaker 1: UH Dish, which has a television service that rides over
Speaker 1: the Internet. UH, they support Google, I would imagine Google.
Speaker 1: Google as well has largely been a supporter of that neutrality,
Speaker 1: although it's increasingly becoming an Internet service provider itself as
Speaker 1: as it expands to uh to deliver its own service
Speaker 1: in some areas. So it's it's historically been a strong
Speaker 1: supporter of net neutrality. It has supported these rules as well,
Speaker 1: maybe not as strongly as it did in earlier years. Well, then,
Speaker 1: if I'm an investor, how does this change anything for me?
Speaker 1: Because it's the court upheld the existing system. Does this
Speaker 1: make it harder for those providers to make money and
Speaker 1: enrich their shareholders? Well, from the company's perspective, the problem
Speaker 1: here is that internet service had had always sort of
Speaker 1: sat outside of the regulatory box, if you will. Um.
Speaker 1: The SEC always sort of took a hands off approach
Speaker 1: because it was always outside of the law. Um. But
Speaker 1: but since the SEC kept losing these net neutrality cases,
Speaker 1: and this is the third time it's tried to adopt
Speaker 1: this rule, these rule, and this is only the first
Speaker 1: time that it's actually succeeded. In order to to justify
Speaker 1: its rules, it brought internet service within to the heart
Speaker 1: of the law. So it has the broadest potential power
Speaker 1: over the service going forward. It effectively gets to determine
Speaker 1: what is a reasonable practice under a very vague standard
Speaker 1: UH going forward. So so, what what the companies I
Speaker 1: think are most concerned about here isn't these net neutrality rules?
Speaker 1: They said, Hey, we we want to We want to
Speaker 1: protect net neutrality as much as the SEC wants it.
Speaker 1: But what the companies are concerned about is what is
Speaker 1: the FEC going to do with that broad reasonableness power
Speaker 1: uh to oversee internet service going forward? If rates get
Speaker 1: too high, will we see the SEC stepping in to
Speaker 1: regulate the rates UH next? I think that's that's sort
Speaker 1: of the big driver of the lawsuit. Matt just quickly,
Speaker 1: is this the last legal word on neutrality? Well, if
Speaker 1: if the Internet service providers have their way, it won't be.
Speaker 1: They they will likely ask the full Appeals Court to
Speaker 1: reconsider this decision, and that will be due at the
Speaker 1: end of July. They also have the option to take
Speaker 1: this to the Supreme Court or try to take this
Speaker 1: to the Supreme Court, but that's a that's a tough
Speaker 1: tough road to to follow that the Supreme Court denies
Speaker 1: most cases. So this very well could be the final
Speaker 1: word in the case. Thank you very much for joining us.
Speaker 1: Matt Chettenheim is communications litigation analyst for Bloomberg Intelligence. Joining
Speaker 1: us from Washington, d C, home to Bloomberg Fm. You're
Speaker 1: listening to taking Stock. I'm Pim Fox, my co host
Speaker 1: Kathleen Hayes. This is Bloomberg Radio. Bloomberg taking Stock is
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