From Holman Jenkins, columnist at The Wall Street Journal, “Obama’s Cable Monopoly Boom, ” September 19-20, 2015:
No industry, except maybe health insurers, has benefitted so much from Obama policy as cable companies. Their stocks have been pretty much straight up since the president introduced has net-neut [net neutrality] regulation policy in November.
Overwhelmingly, the signal from the markets is that cable’s dominance of fast broadband is less under threat today that it was the day before the Federal Communications supinely aligned itself with the Obama diktat.
The latest proof is Moroccan-born French entrepreneur Patrick Drahi’s $17.7 billion deal to take over Cablevision, America’s fourth-biggest cable operator, at a towering valuation…
…Where will he find revenue to make his play pay?
Answer: by cannibalizing the increasingly vulnerable revenues the big wireless operators generate from providing cell service….
A more pressing likelihood today, though, is that cable operators, with their entrenched position in local broadband and burgeoning Wi-Fi networks, will be the ones to reduce the cellular operators to vassalage. Mr. Drahi has already hinted that, after the bloodletting he expects in wireless, he looks forward to picking up a U.S. wireless operator cheap….
Maybe we shouldn’t be surprised. Regulation always favors incumbents because incumbents are best positioned to use politics to entrench their incumbency. But it will be a surprise to those net-neut advocates who made cable their whipping boys, and who now discover regulation is actually strengthening rather than weakening cable’s hold on the broadband business. One who has already figured this out is our new French cable guy, Mr. Drahi.
This was as predictable as it was stupid, see “The Net Neutered,” SLL, 2/17/15.
