Cable Giants Aiming for Broadband Gains

Fulcrum Global Partners' Richard Greenfield observes there are two possible conclusions from the DSL slowdown. One is that, despite cable's higher pricing for high-speed Internet connections, its higher bandwidth and bundled offerings mean a smaller seasonal slowdown for cable -- "a meaningful near-term positive for the cable stocks."

The other possibility, however, is that cable industry estimates are too aggressive, writes Greenfield, and seasonality in broadband Internet connections "is higher than we have modeled."

Greenfield says that if the sequential decline in cable modem additions matches that of the 24% decline in DSL additions from the first quarter, it would be a negative for cable operators. Going into earnings season, he expects second quarter cable modem additions for Comcast, Time Warner Cable and Cox to be down 15% from first-quarter adds.

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