Merger Impact on Cable: A Wall Street View

While Wall Street has been eyeing EchoStar's $25.8 billion merger with DirecTV from a satellite standpoint, it's also taking a look at what impact the deal could have on satellite TV's biggest competitor in the multichannel business.

In a research note detailing the merger and its impact on cable, Bear Stearns analysts Raymond Lee Katz and Robert Peck said a combined DBS entity would force the wired TV business into more consolidation. And since a combination of DBS assets would allow for carriage of more local programming, HDTV and other offerings, cable companies may be compelled to convert their systems to 100 percent digital, the Bear Stearns note said.

In battling a larger DirecTV/EchoStar combination, cable may focus on its ability to deliver broadband services at higher speeds and with greater functionality than satellite can offer today. Also, Peck and Katz said cable companies may find it to their advantage to allow non-affiliated ISPs on their networks, especially those with brand recognition.

"In response to the merger, we believe cable will become more aggressive in developing and distributing both broadband content and communications in order to drive the penetration of broadband connectivity," the Bear Stearns note, appearing in its E-Week publication, said.

Cable's telephony product could also become part of the arsenal. "Expect Cox and AT&T to continue to market their services aggressively and to bundle aggressively as well," the note said. "Costs to the consumer will come down through bundled pricing, in our view."

From SkyReport.Com (Used with permission)

Cable's telephony product could also become part of the arsenal. "Expect Cox and AT&T to continue to market their services aggressively and to bundle aggressively as well," the note said. "Costs to the consumer will come down through bundled pricing, in our view."That has been my experience so far with Cox. Three months ago when I moved I dropped my service with DTV and signed up with Cox for digital cable, cable internet, and cable phone service. By bundling them together I am paying significantly less than I was previously for DTV and Southwestern Bell for my phone service. They keep offering better and better deals for increasing the number of services and packages I receive from them. I need to check with them, but the only thing that is currently keeping me with ATT for my long distance service is my 800 number. If I would switch to Cox I would save another $11 per month.

800 numbers have been portable for a long time, its yours and goes with you to whatever provider you want.

The problem is not portability, it is whether the provider offers the service I need. I have a personal 800# so that my kids (especially the one in college) can call me for 10 cents a minute, instead of using calling cards at 25 cents a minute (plus some occasionally ridiculous pay phone charges). Unfortunately, Cox at this time does not offer the service, although when I explained to the CSR and the tech to which she transferred me, the response that seemed to be unspoken was, "Why don't we offer that?" So at this time I guess I will have to stay with ATT for those services. As I tell my kids, I provide them with things like cell phones, calling cards, and an 800# for my convenience, so they better use them when and how I desire (for my peace of mind), but that doesn't mean I have to pay any more than necessary for that peace of mind.