IP Democracy: No Hail Mary Pass for Cable?

The New York Times’ Ken Belson and Geraldine Fabrikant have this item today about the cable industry and the competition—both in Washington and in the marketplace—that cable faces. Former cable exec Leo Hindery is quoted in the piece as saying that cable is on the losing side of the equation and is getting boxed in.

“The playing field is being leveled, and it’s Comcast’s mountain that is getting leveled more than AT&T’s,” said Leo Hindery Jr., a former cable executive and a partner at the private equity firm InterMedia Partners. “The cable guys are boxed in, and I don’t think there’s a Hail Mary pass.”

It doesn’t help that the Bell companies, despite their relatively more volatile income statements, are giants in comparison to cable companies—both in Washington and in the marketplace. The article notes that “[s]heer size also helps the Bells throw their weight around in Washington,” an assertion that borne out by last week’s news that the upcoming House telecom reform bill is nothing but bad news for the cable industry.

Size, however, may not really have anything to do with cable’s losing game in DC. Industry insiders say that cable doesn’t stand a chance in the House because of the composition of the Energy and Commerce Committee’s majority and minority leadership — Rep. John Dingell (D-MI), a long-time cable foe and Rep. Joe Barton (R-TX), a congressman beholden to his home state’s telecom powerhouse AT&T.

Cable operators, however, are publicly confident. And they may have good reason to be — the incumbent telcos have taken a run at video services several times before and haven’t been able to make it work.

“When one of your major competitors gets bigger, we have to notice,” said Stephen B. Burke, the chief operating officer at Comcast. “But we’re so far ahead of them. What is going to be fun is to prove that the market is wrong by putting great numbers on the board.”

Posted by Cynthia Brumfield on March 13, 2006 7:13 AM to IP Democracy