Latest Obama Drama: ‘Net Neutrality’ is back… Big time

Latest Obama Drama: ‘Net Neutrality’ is back… Big time

US flag and old Bell logo.
So, the Internet is to be fundamentally transformed into another Ma Bell regulatory monopoly? (Composite image by T. Ponick)

WASHINGTON, November 11, 2014 – It’s Veterans Day today: a holiday for the Feds, the banks, for state governments, and at least a few folks in the private sector. But it’s a more or less normal Wall Street trading today, with stocks wandering around in a narrow range on low volume after Monday’s third straight weekly advance last week.

But the more important—and distressing—news today is that President “No Learning Curve” Barack Obama has shaken off his party’s tsunami defeat last week not by sitting down with Republicans to negotiate crucial issues like healthcare and immigration policy.


In the midst of his latest Asian non-policy foray, he found the time to let the FCC know that it’s time for them to put their collective foot down by issuing regulations that will make so-called “Net Neutrality” a rule rather than just a self-serving slogan issued by rich Silicon Valley bigwigs and socialists who want a free ride on the bandwidth train that other companies have built.

Obama called on the FCC to declare that the Internet was no longer a competitive business but a public utility that will need the “strongest possible rules” to make sure that broadband doesn’t get bifurcated into toll lanes and free lanes.

In other words, via declaring the Internet a fancy telecom company, it’s back to the future for these statists, all of whom seem to be longing for those thrilling days of yesteryear where the effectively state-controlled Ma Bell monopoly owned our entire communications lifeline. What a concept!

Obama’s latest attempt to put yet another gigantic business—like healthcare—under the oppressive thumb of an increasingly ineffective and costly Federal government agency demonstrates two things: First, the continuation of his insatiable desire that his leftist and statist pals put more and more key business areas under government regulatory control; and second, his utter inability to either comprehend or care that last Tuesday’s midterm election results constituted a dramatic public verdict opposing this kind of non-democratic high handedness.

A key issue with this President’s effective ordering of the FCC to corral the Internet and subject it to Federal regulation is part and parcel of his eventual plan to give away most control entirely to either the U.N. or other foreign governments In the end, such a path would effectively make the U.S. government no different from kleptocratic dictatorships or 21st century communist dictatorships in seeking to control information flow: i.e., what the public can actually see and learn.

As we’ve noted here before, this is typical of Obama’s Hugo Chavez tendency to turn the tools of democracy on their heads, using such tools instead to forge a “democratic” dictatorship.

As today’s latest anti-capitalist fusillade resounds on Wall Street and everywhere else, it’s become quite clear that the Republicans’ capture of both houses of Congress will do nothing to deter the worst President in American history from his mission of “fundamentally transforming” this country into a hideous fake democracy that not even genuinely liberal Democrats want.

More fundamentally in this case, there is a serious question as to whether the FCC even has the jurisdiction to regulate the Internet at all. Even if that were desirable, it seems to the Maven that the Constitution would require Congress to legislate a new regulatory fiefdom for the FCC, which, to date, it has not. Time for Republicans to wake up and take a stand.

Wall Street is not reacting a lot to today’s latest outrage very violently. Many traders have likely taken a holiday too, or even a long weekend, so volume is down on the exchanges. But broadband providers like AT&T (T), Verizon (VZ), Comcast (CMCSA) and Time-Warner Cable (TWC) are all trading in the red today in reaction to yet another Administration regulatory grab.

Mind, the Maven doesn’t particularly love any of the above companies. They charge consumers far too much for what they provide, particularly when it comes to entertainment packages. But the proposed effective commandeering of the physical networks they’ve built at great expense is not only confiscatory. It could lead to an effective government monopoly in communications, something that’s neither desirable nor democratic.

Not for nothing does current Speaker of the House John Boehner (R-OH) call this risky ply a “misguided scheme” to ultimately regulate the Internet. That’s precisely what it is.

Today’s trading tips

It’s sort of a “meh” day today and nothing looks really appealing until we decide where markets are going next. But we persist in favoring at least small positions in energy, which is looking really oversold. We suspect that the latest edition of the Polar Vortex, scheduled to hit the mid-Atlantic and East Coast sometime between tonight and tomorrow evening will set big East Coast traders, hedge funds and HFTs to shivering which could very well result in at least a short-lived buying panic for purveyors of those dreaded fossil fuels. So much for global warming climate change.

We still favor value-added mid-sized oil and gas companies like Hess (HES) and Anadarko (APC) since both of these have plans to unlock more value in the coming quarters. Both are currently in the Maven’s portfolio.

We are also looking to get back into our old favorite MLP, Calumet (CLMT) for its promise of some capital gains plus its fat 9.75% dividend.

We may also buy a few more shares of the MLP ETF AMLP which, in return for a slightly lower yield, aggregates a basket of MLPs in the Alerian MLP index and provides a collective yield to the investor without the necessity of dealing with all those late-arriving K-1 forms that direct investors in companies like CLMT have to deal with every year when doing their taxes.

Relatively short-term preferred stocks and exchange traded notes (ETNs) may also be a good bet here, providing a decent yield but hedging against that ultimate interest rate drive which will send longer term issues in this territory down in price.

That’s about it for now, but we’ll keep you posted. Have a great Veterans Day holiday.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17