Wednesday’s federal government decision to let stand a court ruling that threw out FCC rules requiring local phone companies to share their lines at a discount will likely have far-reaching effects on the telecom sector.
For long-distance companies like troubled AT&T– which plans to continue to fight the battle alone – and MCI, the ruling will likely mean loss of business and more layoffs. The Baby Bells have apparently agreed to leave rates alone until next year, avoiding a potentially difficult shakeout in an election year.
The decision is also likely to boost Voice over Internet Protocol (VoIP) technology as a cheap local alternative. Picking a winner in that fight could prove difficult, however, as smaller players like 8X8and Delta Threewill likely face bigger rivals and more competition.
The telecom shakeout may soon enter a new phase.
Stocks rebounded Thursday on strong chip sales and earnings and merger news, while traders ignored a Bank of England rate hike and disappointing jobless claims and import price reports.
The markets will be closed Friday in honor of former President Reagan.
The Nasdaq rose 9 to 1999, the S&P 500 gained 5 to 1136, and the Dow rose 41 to 10,410. Volume declined to 1.17 billion shares on the NYSE, and 1.36 billion on the Nasdaq. Advancers led 18-14 on the NYSE, and by a few issues on the Nasdaq. Upside volume was 60% on the NYSE, and 55% on the Nasdaq. New highs-new lows were 49-27 on the NYSE, and 40-40 on the Nasdaq.
EMCdeclined 2% after reaffirming guidance.
Net2Phonefell 3% on its results, while National Semiedged higher after beating estimates.
ECI Telecomsurged 12% on a Fibre to the premise (FTTP) deal with British Telecom.
SCO Grouptumbled 10% on a wider than expected loss.
Boston Communicationsfell 11% on news that Verizonplans to use its own wireless platform instead of BCGI’s.
Market Commentary: For our free daily market commentary and technical analysis, please visit the InternetStockReport.com home page at:
http://www.InternetStockReport.com.