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Analysts Bullish on Broadcast; Cable Cloudy

Credit Suisse analysts Tuesday were bullish on the prospects for broadcast deregulation and media stock performance in general, while finding less to praise in cable's economic prospects.

Credit Suisse said in a summary of an investor update on FCC regs Tuesday that it believed there would be liberalization of FCC ownership rules.

FCC Chairman Kevin Martin is launching a review of media-ownership rules now that he has a third Republican vote with the installation of Robert McDowell, formerly of the Competitive Telecommunications Association (Comptel).

The Wall Street handicapper said that it expected relief on newspaper/TV crossownership and duopoly restrictions, which would benefit companies like Tribune. That trend, they said, should "generally be positive for most media stocks over time."

Cable's financial picture looked far cloudier to the analysts, at least in the short term: "We believe that regulatory developments over the next two years will be mostly negative for the cable companies," they said. 

"The most significant issue for cable," they said, "is changes to the municipal franchising process, which we believe will expedite RBOC video entry."

On the telecom front, Credit Suisse's media and telecom analysts concluded that the Republican FCC would likely be generally deregulatory in that sector as well. Given McDowell's employment at Comptel, they added, his views "could favor those types of carriers."