The news for Comcast (NASDAQ: CMCSA) and its cable peers could not get worse. Or could it? After posting mediocre earnings, the cable giant had to face concerns that the new AT&T (NYSE: T) U-verse IPTV product has been taking TV customers from cable companies at a rate much faster than Wall Street would have guessed. Comcast shares hit a 52-week low at $20.82.
Now, the FCC plans to void thousands of contracts that give cable companies exclusive rights to distribute TV into large apartment buildings. The New York Times writes that FCC "officials and consumer groups said the new rule could significantly lower cable prices for millions of subscribers who live in apartment buildings and have had no choice in selecting a company for paid television."
The move would open the door for satellite TV companies and the two big telephone firms, something that cable company stock prices can ill-afford.
Cable, which only a year ago looked so good with the success of its "triple play" TV, broadband and phone service, now faces telecom companies, especially AT&T and Verizon (NYSE: VZ), which are successfully playing catch-up. The new fiber offerings can also bring "triple play" offerings to the home, and the phone companies have the balance sheet to fight a price war, if necessary.
Cable stocks are down, and they may stay that way for a long time.
Douglas A. McIntyre is a partner at 247wallst.com.