GOP Control in Washington Points to Bigger Cable Opportunities, Macquarie Analyst Says
The cable industry heads into 2017 with the wind strongly at its back due to incoming Republican control of the FCC and Washington, including in the form of potential broadband pricing power, bigger merger opportunities, anticipated tax reforms and inasmuch…
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as rising interest rates don't hurt less-leveraged companies like Comcast and Verizon, said Macquarie analyst Amy Yong in a note to investors Friday. With FCC Commissioners Ajit Pai and Mike O'Rielly expressing interest in overturning net neutrality, "cable's broadband monetization opportunity is wide open," Yong said. Charter is bound by its Time Warner Cable/Bright House Networks acquisition consent decree for years more, but Comcast's NBCUniversal consent decree expires in early 2018, she said, saying it tried usage-based pricing in some markets but it also raised its data caps to 1 TB. She also said AT&T's proposed Time Warner buy and the CenturyLink/Level 3 deal are more likely to be approved under "more palatable conditions," and horizontal mergers are more likely, raising the odds of a T-Mobile/Sprint deal. She said there's increased possibility for a cable/wireless merger, with Charter/Verizon a possibility.