With FCC regulation in trouble, cable shares may rally

For a while, it looked like a sure thing. The FCC would significantly increase its regulation of the cable industry because of its near-monopoly in controlling which programming runs on its systems. The federal agency looked at steps that included forcing cable companies to carry small programming channels that might have trouble getting access and curbing more expansion by the largest cable firms.

Somewhere along the way, Republican Congressmen said the new level of regulation being considered was too tough. Cable has plenty of competition from satellite TV and big telecom companies, they reasoned.

The Wall Street Journal writes: "A vote Tuesday on a proposal that could lead to stricter regulation of the cable industry was in jeopardy Monday." One issue is whether over 70% of homes with access to cable actually subscribe to it. If so, that could trigger the FCC's ability to impose new restrictions on cable operators. Figures on that penetration, though, differ depending on their source.

If the vote is delayed or killed altogether, it is likely that shares in companies like Comcast (NASDAQ: CMCSA) will have a healthy rally. Concerns about the FCC decision and new competition from the telecom industry have killed cable shares. Comcast's shares have fallen from over $30 earlier this year to about $19.

That slide could turn into a rally this week.

Douglas A. McIntyre is an editor at 247wallst.com.