Verizon Communications Inc. (NYSE: VZ) is on the winning end of an argument about Net Neutrality. A US appeals court has overturned certain aspects of the so-called Net Neutrality laws, which effectively required Internet service providers to treat all web traffic equally without regard to the source. The court ruled that the FCC does not have the right to force providers to force carriers to be neutral.
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Net Neutrality went into place in 2010. It may not directly impact what is called Deep Packet Inspection purchases, but now it seems as though it will bring more stability to packet providers.
Sterne Agee has issued a report saying that this will be positive for Procera Networks, Inc. (NASDAQ: PKT). Another company such as Allot Communications Ltd. (NASDAQ: ALLT) was given a positive mention as well, but Sterne Agee does not cover this one.
Sterne Agee said that this new ruling could begin a process by which larger Service Providers revisit potentially larger projects that involved the technology. This would obviously benefit Procera Networks and Allot Communications. The report did warn that this is in the early hours as carriers in the United States will likely spend the next 6 months to 9 months weighing their legal liabilities against new technology investments.
Another potential winner is Akamai Technologies, Inc. (NASDAQ: AKAM), although that is not mentioned in any research reports today. If content can be discriminated against, getting the content physically closer to the users, as Akamai does, limits the number of networks that such content will run through. Akamai shares were up 2.2% at $47.31 in afternoon trading on Tuesday, versus a 52-week range of $32.63 to $53.61.
Procera Networks, Inc. (NASDAQ: PKT) is up over 7% at $12.11 on the day, while Allot Communications Ltd. (NASDAQ: ALLT) is up over 6% at $15.87 on the day. As a reminder, this effectively sends the argument back to the drawing board rather than sets the rest of the possibilities in stone.
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