Comcast's Future Isn't as Bright Even If Net Neutrality Is Eliminated

Comcast shares have tripled over the past five years even as network neutrality was debated and then approved by President Barack Obama's Federal Communications Commission in February 2015. Yet despite a pronouncement from President Donald Trump's new FCC Chairman, Ajit Pai, that he plans to kill net neutrality rules that regulate internet service providers as public utilities, the outlook for Comcast's stock going forward isn't nearly as bright, media analyst firm MoffettNathanson LLC said in a reported published June 20.

That's partly to do with Comcast's prosperous run-up -- sales grew to $80 billion in 2016 from $55 billion in 2011 -- as well as accelerating declines in cable TV subscribers and a flattening picture for internet growth. For MoffettNathanson, it all comes down to pricing power. Yes, your friendly neighborhood (monopoly) broadband provider can be expected to use Washington's deregulatory mood to raise prices. But it's unclear whether Comcast and other broadband providers will be able to hike prices enough to offset broader slowdowns in their core businesses: internet services and pay-TV.