Cable companies are getting very nervous that the FCC will make it much easier for the telecom companies to compete for home video subscription. And, the argument against cable may be convincing. Cable rates rose 93% from 1995 to 2005. Interestingly enough, Comcast’s stock has risen from $10 to $42 over that period.
Cable argues that when consumers bundle in broadband subscriptions and VoIP, prices for the services as a whole have dropped. Of course, many people don’t buy the bundle, so the point of view is self serving.
Cable’s lead in TV deliver to the home is gigantic. While Verizon will have just over 100,000 fiber-to-the-home video subscribers at the end of this year, Comcast already has 1.35 million VoIP subscribers.
The head of the FCC is rebuking the local authorities who grant licenses for TV-to-the-home for: "obstruct and in some cases completely derail" new attempts to bring video competition to an area, according to the Associated Press.
Cable should hope that the government does not begin to take away it leverage and allow telecom companies to move further into a market that the cable companies have owned for years.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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