Cable's High Water Mark?

Over the last year, shares in Comcast (CMCSA) are up 50%. Charter Communications (CHTR) have risen over 200%. Time Warner has cashed in some of its cable chips by taking Time Warner Cable (TWC) public.

Now Time Warner is talking about reducing its stake in its cable operation due to competition from the internet for services like video on demand.

But, cable is the internet. Right? Well, in part. DSL does have a large share of the market. Broadband enabled phones are becoming more popular and 4G deployments will become part of the handheld experience. Verizon (VZ) is putting in fiber-to-the-home to compete more effectively with cable. WiMax may make wireless broadband a nationwide network.

Cable is doing well. Perhaps too well. The ride may not continue. At this point cable companies are stealing voice customers from the phone companies. But, Big Telecom is fighting back with lower prices for landline services and offers that bundle home service with cellular.

The market is being flooded with new devices that allow the internet to bring video to the TV. The Slingbox. Apple’s (AAPL) ITV. The new Amazon (AMZN) set-top.

So, perhaps cable is reaching a peak. Perhaps the management at Time Warner is right. But, don’t tell the people at Comcast. They think that business is booming.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.