You ever have that conversation around the kitchen table with your friends? The one about how you wished you had bought Microsoft in 1988 or Google in 2003? It’s that conversation that has you calculating how much you might be worth right now had you only invested five or ten or twenty thousand dollars in such ventures. The conversation usually ends with somebody saying “I could retire right now!” And everybody else woefully shaking their heads because they know deep in their hearts they are never, ever going to be able to retire.
In case you are now totally depressed as you reflect on the IPO’s that passed you by or that piece of farmland you should have bought because it now sports a mega-shopping mall, I bring you good tidings of great financial renaissance! If you haven’t already learned, in cable and telecom it ain’t over, it ain’t even close.
Kagan Research has just reported that the average cable bill will jump from $80 a month to $100 a month in the next three years. And cable revenues will double from $66.5 billion to $139 billion in the next ten years. While the Associated Press screamed a headline that said BellSouth reported a 20% drop in second-quarter profit, a closer read shows that after heavy investing in wireless and broadband, the company is realizing in a six-month revenue increase of 1.7%.
Smelling just as sweet, Verizon reports in its July 26, 2005 press release “total quarterly revenues of $7.8 billion, up $1.0 billion, or 14.6 percent -- the 12th consecutive quarter of double-digit year-over-year revenue growth increases.” They’re even having a conference call to hoot and howl about it right this very minute as I write this.
It will only get better as my favorite House Democrat, Mr. Rick Boucher of Virginia, promotes redlining of communities through the elimination of “build-out” requirements for the Bells and for cable (wink-wink).
“That kind of build-out requirement has no place in a competitive environment,” says Rick. Instead “market forces” should determine new construction.
Joined by Senator Ted Stevens (quickly becoming my favorite Senate Republican), Boucher found himself in sympathetic company.
“I don’t expect to require anyone to do anything,” says Stevens.
I love Steven’s Bohemian attitude. In the Steven’s panorama I look forward to ignoring the Homeowner’s Association guidelines for my neighborhood that vex me so. I think I’ll just start driving right through traffic signals, sleep all day long and refuse to pay my taxes. After all, Stevens said “I don’t expect to require anyone to do anything.”
But while Steven’s is a man of lowered expectations, Brent Olson, Assistant VP for Regulatory Policy at SBC has plans for the future. Olson said SBC wants to “harmonize” communications related taxes and fees assessed at the state and federal levels. Clarifying what “harmonize” might mean, Olson told the National Journal that he was talking about federal excise taxes not specifically franchise fees.
“Market forces”
“Expectations”
“Harmonization”
Somebody fire up the incense, I perceive a fifth dimensional celestial administration is about to line up the planets.
The good news is there is still time to make your fortune hedging your bets on telecommunications. Not that I recommend cleaning out Junior’s college fund (reflect for a moment on World Com and Adelphia), but with market forces being what they will be and absolutely no regulatory structure whatsoever (or one that is completely bogus at best) you could find yourself stuffing your mattress with real cash.
In my next economic forecast we will explore all the things you will need to do to try to hang on to any of that cash as you end up subsidizing (through income, property and sales taxes, municipal and state fees, even higher college tuitions) the free ride Republicans and Democrats are about to hand over to telecom. Be sure to bring a calculator and try to find out from your grandmother how much she’s got stashed away, you’re going to need it.
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