"Game,
set and match" in the broadband wars was how Sanford Bernstein Analyst
Craig Moffett characterized Comcast's just-released quarterly earnings, and
that was on a number that failed to meet expectations. But Title II
reclassification is a cloud over that sunny prediction, and Comcast/NBCU deal
conditions could further cloud the picture.
According
to a report issued early Wednesday, Comcast only picked up 118,000 broadband
subs in the second quarter of 2010, well shy of the 204,000 that Moffett
called the consensus expectation. But given sub losses at the telcos, he
suggested that still bolstered the long-term "bull case" for cable
"winning the broadband wars."
"Remarkably,"
he said, cable stocks remain cheaper than telcos. Sanford Bernstein has gotten
more bullish on the telcos over the prospects of wireless data, but still
sees cable as the long-term plan, but with a regulatory caveat.
He
predicts that cable's growing broadband strength vs. the telcos will
make the "political will" to regulate it that much stronger.
Despite
talks of a legislative solution to clarifying the FCC's broadband oversight
powers, Moffett said he still expects reclassification to be the ultimate
outcome. "Unfortunately, regulation would create - almost by definition -
an asymmetry; unlimited downside risk, but starkly capped upside."
Another
x factor, he says, is the NBCU merger review, one that he says will bring
with it "myriad conditions"--Comcast has already agreed to a number
of them in deals with minority and station groups--that will affect future cash
flow.
"Given
those risks," he said, "we remain on the sidelines."
