Comcast's Blowup Cuts Cable

Is it EchoStar (DISH - commentary - Cramer's Take)? Or is it foreclosures? Is it DirecTV (DTV - commentary - Cramer's Take) or is it bills that are too high? Is it Verizon (VZ - commentary - Cramer's Take) or is it house poor fears?

We will debate the Comcast (CMCSA - commentary - Cramer's Take) blowup for a long time. Trying to figure out how a monopoly utility that we used to regard as a utility that could no more be shut off than Con Ed, has become a totally discretionary competitive item that needs to be sold and can't be pulled.

The implications either way show you the limits of this former wonder industry. For all of the years I have been in the business, investing in cable stocks worked. The companies always grew with consistent cash flow and that was enough. They were utilities that always talked about how dividends weren't tax-advantaged and instead focused on the broad expansion and cash flow growth.

They used their stocks to buy other cable outfits, roll them up, make them more efficient and generate even higher cash flow. They owned the rights to be solo in towns, rights that seemed only fair given that every town needs cable, and they gave towns a couple of community stations in return for being monopolists.

Things began to erode when it became clear that the Dish had something they didn't: the NFL, perhaps the most proprietary of programs out there. NFL Sunday ticket is simply unrivaled for a nation that will watch other teams besides their home teams.

Then, while they layered on phone service, they kept raising price. They raised price so much that it was worth Verizon losing billions to move into this turf. Given the gigantic gobs of money cellphones generate because of texting and video -- two products that didn't even exist not that long ago -- and given the pricing umbrella cable set, it is almost like OPEC charging $90. Wham! The alternative energy/video delivery guys can come in underneath and give nice TVs away to boot.

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