Eric Savitz of Barron's gave a well-needed reminder of how cheap Comcast Corporation (NASDAQ: CMCSA) is over the weekend. The leading cable company, whose stock is down 16% for the year, now sells for a valuation almost equal to that of its slower growing Baby Bell competitors.

It is also interesting, in this period of bankers attempting to market debt and equity for private equity transactions that cannot even cover their interest expense, that Comcast covers its interest expense some five-fold, with it jumping to 6.8x next year.

Comcast's stock has gotten hit on concerns of Verizon Communications (NYSE: VZ) beginning to get some traction on its video deployment, which has slowed down growth of the cable giant. However, Comcast is getting five customers for each one the Baby Bell competitors are getting from the cable company.

Merrill Lynch has a twelve month price target of $38 per share, up from $23 today. Not a bad return for a high quality company that is a cash flow machine.

It appears the monopolistic era of the cable company is coming to an end. As the Baby Bells complete the build out of their networks to carry voice, video and data, they are also going to the FCC and saying there is an alternative to the cable companies.

Kevin Martin, the FCC chairman, is defending a proposal to limit the number of pay television subscribers a cable company can reach at 30 percent, saying telephone companies that deploy video would also be capped at that level, according to Reuters.

"We are trying to create a regulatory environment that promotes competition in a lot of these services. What we have seen is that cable prices have increased by about 100 percent since 1996," FCC Chairman Kevin Martin told reporters after testifying at a House telecommunications and Internet subcommittee hearing.

The entire cable industry has been built on being a monopoly. However, this era is now coming to an end. If the Baby Bells cannot compete head on with the cable companies, then regulators will help.

It is important to start listerning to what the cable CEOs say during conference calls about business. Comcast's stock got hit after its recent call due to forecasting higher capex. This surprised the investment community. Higher capex might be a sign that network upkeep is costing more than expected, which possibly means a lower return on investment.

Don't hold your breath that yesterday's FCC ruling will make it easier for the Baby Bells to enter the video delivery business.

Along partisan lines, the FCC voted 3-2 to put new rules in place that will require local cable franchising authorities to act on applications for access to local rights of way within 90 days, and to act within six months on applications from other new competitors.

This ruling represents a direct threat to the cable companies, who will now face greater competition. What do you think the cable companies and the supporting organizations will do? Sue and drag out the process as long as possible -- similar to what the Baby Bells did for years with the Telecom Act of 1996.

What is the best economic solution? The Baby Bells may want to buy Echostar Communications (NASDAQ:DISH) and DirecTV Group, Inc. (NYSE:DTV). This way they could buy all the franchise rights in one shot and avoid having to approach thousands of towns and communities to get franchise rights, saving time and money.