Washington -- With capital spending on the wane and regulatory threats
nowhere in sight, large cable operators such as Comcast Corp., Cox
Communications and Cablevision Systems Corp. are poised to dominant satellite
and telecommunications rivals, Precursor Group analyst Scott Cleland said
Thursday.
'Precursor believes that cable has a superior convergence business model and
will be the most robust and efficient broadband distributor in the future,'
Cleland wrote in a client memo.
Cleland exclude AOL Time Warner from his analysis, saying the company was 'a
special case' that needed to spin-off AOL to demonstrate that their merger
failed.
He was also down on Charter Communications Inc., Insight Communications Co.,
and Mediacom Communications Corp., saying they lack 'density economics.'
Cleland said he bullish on 'big cable' because capital spending, now largely
behind the companies, has created a platform for video, voice and data that
phone companies and direct broadcast satellite carriers cannot match.
'Cable has several hundred times more capacity than telecom. It is
dramatically easier to do telephony over cable than to do video over copper,'
Cleland said.
The unwillingness of Congress or the Federal Communications Commission to
impose regulatory mandates on cable -- such as requiring carriage of digital TV
stations or opening data lines to competing Internet Service Providers -- would
give cable the edge.
'The federal government effectively has chosen the cable fiber/coax line to
win, and the telco copper wire to lose in the market,' Cleland
said.
