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Thursday, June 29, 2006

Can Cable Trump The Telco Video Card?

Stocks: (T)(TWX)(VZ)(CMCSA)

Comcast has announced that it will buy thePlatform, a digital media video company with customer including Comcast itself, the Wall Street Journal, ABC News and Starz.

It is a safe bet that the purchase was as much to form relationships with thePlatform's customers as to get the technology.

Cable firms like Comcast now seem to take seriously the threat posed by AT&T, Verizon and others as they prepare to offer television over their fiber networks. Try as they might, the cable firms have not been able to get the federal government to stop the march of the telcos into services that compete with cable TV.

If you can't beat them, join them.

Systems like the one offered by thePlatform allow video to be sent over the internet to televisions. So, the web-based content that most people watch on their PCs can now be routed to the television set as well. Most video on the internet makes it to the PC and no further, and this eliminates potential customers who do not want to watch TV or movies on a PC screen.

As the Wall Street Journal pointed out, Comcast has one large advantage over the telcos. It already pays them a huge sum for programming on its cable TV system, so it has access to the content providers to get offerings for the new IPTV intiative.

For the last year or so, it seemed that the large regional telephone companies had caught the cable guys flat-footed in the internet video delivery business.

Well, look again.

Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does now own stock in the companies he writes about.
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