Citing a major court victory and Republican control of Congress, the White
House and the Federal Communications Commission, a prominent Washington analyst
has turned bullish on the cable industry for the first time in more than two
Scott Cleland, CEO of The Precursor Group, who has frequently forecast
regulatory gloom for cable MSOs, released a client report March 19 that painted
an uncharacteristically rosy outlook for cable for the remainder of the year and
perhaps beyond, warranting 'a fresh and hard look from investors.'
In a one-page report, Cleland cited several developments in recent months
that have broken cable's way, including the March 2 court decision that voided a
host of cable-ownership rules on First Amendment grounds. Those rules once
threatened AT&T Corp.'s timetable for restructuring into four companies.
Cleland also said cable will benefit from the deregulatory climate favored by
Republicans, from its stability in a recession that is 'decimating' cable
overbuilders and from its leadership in signing up residential subscribers to
high-speed Internet-access services.
On top of all that, Cleland proclaimed, 'The worst of the open-access threat'
appears behind cable. He said the Federal Trade Commission's approval of America
Online Inc.'s merger with Time Warner Inc. contained 'pretty benign'
Internet-access provisions that 'resemble common-carrier access very
Cleland indicated that cable can expect a Bush White House and an FCC headed
by Republican chairman Michael Powell to shield the industry from new regulatory
burdens, probably allowing cable to fatten its lead over the phone companies in
acquiring new high-speed Internet subscribers.
'When you add it all up, they have a very positive outlook for 2001 and
likely longer,' Cleland said in an interview Tuesday.