Analysts Question Bell Investments

[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
Wall Street analysts told a Senate committee Tuesday that the billions of dollars being spent by AT&T Inc. and Verizon Communications Inc. to compete with cable might not produce a profit. “There is a high degree of skepticism that the substantial investment underway at the [phone companies] to deliver broadband networks to the home will deliver a satisfactory return on the incremental investment,” said Luke Szymczak, vice president of JPMorgan Asset Management. AT&T and Verizon are installing high-capacity fiber lines to rapidly deliver voice, video and data in a high-stakes battle with cable. “The costs of these networks are far beyond what the returns of the new services can provide,” said Craig Moffett, VP and senior analyst of U.S. cable and satellite broadcasting at Sanford C. Bernstein & Co. The two analysts appeared before the Senate Commerce Committee, which is expected to vote on a bill next month that would ease phone-company entry into cable markets and perhaps include network-neutrality safeguards.
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