You will be redirected back to your article in seconds

Infopike stall seen in rate rollback

Cable’s ability to compete with telephone companies in the delivery of “information superhighway” technologies will be delayed at least 18 months as a result of new FCC rate regulation rules.

That’s the claim of investment analysts John Reidy and Rich McDonald, who assessed the impact of the FCC’s 17% rate rollback at a briefing Tuesday at the National Cable Television Assn.

“The sum total (of the FCC rules) is a push back in the full service network, ” said Reidy, a managing director with Smith-Barney-Shearson. “We’re going to get to a competitive world a lot slower” as a result of the new FCC rules.

McDonald, director of the media with CS First Boston Group, said the FCC regs will result in a 28% reduction in the borrowing power of cable operators. “To build, this industry must be allowed to borrow,” he said. The FCC rules result in “significantly less ability to spend and to borrow,” said McDonald.

McDonald said new FCC chairman Reed Hundt has been “very effective” in “taking money away from cable companies and giving it back to consumers.” However, he said policymakers must decide whether delaying infopike technologies is worth the $ 50 in annual savings consumers will receive in lower cable rates.

Despite their implicit criticism of the new FCC rules, neither Reidy nor McDonald are advising clients to sell cable stocks. Reidy said that “if you overlook the valley … and look towards the second half of 1995, there looks to be long-term values” in cable.

More TV

  • AMERICAN IDOL - "113 (Top 14)"

    'American Idol' Recap: The Final Fourteen Sing for America's First Vote

    Cable’s ability to compete with telephone companies in the delivery of “information superhighway” technologies will be delayed at least 18 months as a result of new FCC rate regulation rules. That’s the claim of investment analysts John Reidy and Rich McDonald, who assessed the impact of the FCC’s 17% rate rollback at a briefing Tuesday […]

  • Westworld Season 2

    'Westworld' Recap: Enchantment Under the Sea

    Cable’s ability to compete with telephone companies in the delivery of “information superhighway” technologies will be delayed at least 18 months as a result of new FCC rate regulation rules. That’s the claim of investment analysts John Reidy and Rich McDonald, who assessed the impact of the FCC’s 17% rate rollback at a briefing Tuesday […]

  • 'Sharp Objects' Trailer: Amy Adams Returns

    Amy Adams Returns Home in First Trailer for HBO's 'Sharp Objects' (WATCH)

    Cable’s ability to compete with telephone companies in the delivery of “information superhighway” technologies will be delayed at least 18 months as a result of new FCC rate regulation rules. That’s the claim of investment analysts John Reidy and Rich McDonald, who assessed the impact of the FCC’s 17% rate rollback at a briefing Tuesday […]

  • Telemundo Adds 'Series Premium' Sunday Drama

    Telemundo Adds 'Series Premium' Sunday Drama Showcase

    Cable’s ability to compete with telephone companies in the delivery of “information superhighway” technologies will be delayed at least 18 months as a result of new FCC rate regulation rules. That’s the claim of investment analysts John Reidy and Rich McDonald, who assessed the impact of the FCC’s 17% rate rollback at a briefing Tuesday […]

  • 'Grey's Anatomy' Renewed for Season 15

    'Grey's Anatomy' Renewed for Season 15 at ABC

    Cable’s ability to compete with telephone companies in the delivery of “information superhighway” technologies will be delayed at least 18 months as a result of new FCC rate regulation rules. That’s the claim of investment analysts John Reidy and Rich McDonald, who assessed the impact of the FCC’s 17% rate rollback at a briefing Tuesday […]

  • Jane The Virgin -- "Chapter Eighty-One"

    'Jane the Virgin' Boss on Season 4 Finale: 'I Knew It Would Be the Ultimate Surprise'

    Cable’s ability to compete with telephone companies in the delivery of “information superhighway” technologies will be delayed at least 18 months as a result of new FCC rate regulation rules. That’s the claim of investment analysts John Reidy and Rich McDonald, who assessed the impact of the FCC’s 17% rate rollback at a briefing Tuesday […]

More From Our Brands

Access exclusive content