GOOD MORNING. Stocks in Asia closed mixed today. European shares are down, and U.S. shares are pointing to a lower open.

A U.S. appeals court ruling announced Tuesday afternoon could shake up the balance of power between the Federal Communications Commission and Internet-service companies. The decision follows the FCC’s attempt to sanction Comcast (CMCSA) for blocking some Internet traffic. For now, the ruling limits the FCC’s power over web traffic and will allow companies that provide Internet access to block specific sites and charge a premium for high-trafficking websites, including video sites. Should this ruling stay in effect, investors could see company revenues and shares rise due to higher charges, increased control and less regulation. The ruling could also result in a Congressional battle as lawmakers duel over whether or not to extend the FCC’s powers even more to regulate Internet service.

Analysts welcomed the news on behalf of investors but caution that the fight between the two parties is nowhere near over. “In our view, the ruling represents a positive development for broadband service providers, including cable [multiple system operators] such as [Comcast], Time Warner Cable (TWC), and Cablevision, as well as traditional telecomm companies Verizon (VZ) and AT&T (T),” writes Jonathan Schildkraut, an analyst at Jefferies & Company. He notes that the ruling could bring new revenue streams for this sector including “metered billing on usage” and “incremental revenue based on service quality.” Following the ruling, company stock prices saw little traction.

At issue is the idea of “net neutrality” – that all types of web traffic should be treated equally and given equal access at no extra cost – which has pitted consumers and popular web sites against many of the Internet service providers. Should the ruling stay in place, one issue that will likely arise is whether companies like Google (GOOG) and Amazon (AMZN) that offer web video and other high-bandwidth services could see a decrease in their earnings or revenues.

Some companies aren’t planning to switch strategies. After the ruling was announced, Time Warner Cable issued a statement saying it plans to continue offering open Internet service, citing public sentiment. The FCC, however, appears ready to fight the ruling. A Commission statement announced, “Today’s court decision invalidated the prior Commission’s approach to preserving an open Internet. But the Court in no way disagreed with the importance of preserving a free and open Internet; nor did it close the door to other methods for achieving this important end.”

IN OTHER NEWS:

  • Nissan, Renault and Daimler (DAI) announced they will begin developing cars jointly in an attempt to increase profits and cut costs. LINK
  • The Federal Trade Commission could block Google’s (GOOG) purchase of AdMob, a mobile-advertising company. LINK
  • Goldman Sachs (GS) is expected to deny that it bet against clients in the mortgage market. LINK

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