Net Neutrality Could Derail Apple-Comcast Deal
Earlier this week, The Wall Street Journal reported that Apple (NASDAQ:AAPL) and Comcast (NASDAQ:CMCSA) are currently in talks to build an Apple TV streaming service, citing people familiar with the matter. Now the Journal is saying that such a deal could come under tough regulatory scrutiny as net neutrality laws are being revised and Comcast waits for approval on its purchase of Time Warner Cable (NYSE:TWC).
In the proposed deal between Apple and Comcast, the Apple streaming service would be kept separate from other Internet traffic to ensure that users receive the best possible service and don’t experience the slowdowns that people have been complaining about with Netflix (NASDAQ:NFLX). The overruling of the Federal Communication Commission’s net neutrality laws, which required that all Web traffic be treated equally, would allow Apple and Comcast to make such an arrangement.
Analysts and industry experts cited by the Journal said that the FCC and the Department of Justice would be interested in exploring such a deal because despite the overruling of net neutrality, Comcast agreed to comply by those rules when it acquired NBC Universal. While the Comcast-Apple deal wouldn’t need government approval, it could come under scrutiny if it’s shown to violate previous agreements made by Comcast. The company could be forced to stand by the net neutrality agreement even though the law as a whole has been overturned.
Regulators will also be interested in the deal since Comcast is currently the largest cable provider in the country and is set to get much bigger should the Time Warner acquisition be allowed to pass.