Investors, Don’t Get Too Excited About the FCC’s Net Rules

[Commentary] Shares of broadband providers have run up since the election on the hope that the Trump administration will bring a lighter touch to telecom policy. But even with looser network neutrality rules on the horizon, little may actually change.

New rules are expected to end the policy of classifying broadband as a utility subject to price regulation and return providers to a more limited regulatory framework. That would remove a big long-term risk for cable and telecom companies. But it may not make much of a difference in the short term, raising the question of whether recent stock-price gains are fully justified. Critics of the current rules argue that the threat of price regulation has chilled investment. But cable capital expenditures at Comcast , the largest wired broadband provider, have continued to climb since the new rules and are expected to rise again in 2017, according to UBS. Any declines in capital spending at other companies could be chalked up to normal pauses between investment cycles.