For Cable Giants, AT&T Deal Is One More Reason to Worry

[SOURCE: Wall Street Journal, AUTHOR: Peter Grant peter.grant@wsj.com and Amy Schatz Amy.Schatz@wsj.com]
The picture just got fuzzier for the cable-TV industry, a once-mighty monopoly now under assault by new technology and corporate mergers. Even before AT&T Inc.'s planned $67 billion acquisition of BellSouth Corp. -- a deal that would create the world's biggest phone company -- cable companies were under growing pressure. Their stocks have steadily declined amid investor alarm at new competition from satellite and phone companies. The explosion of video on the Internet is conjuring up a future when a cable middleman may no longer be necessary. Regulators are pushing the industry on decency issues and pricing policies. And cable's once-commanding lead in the sale of high-speed Internet connections has eroded as telephone companies have steeply discounted competing offers. Cable used to enjoy a two-thirds market share, but in the past year telephone companies have picked up more new customers than cable operators did.
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