SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Freedom Fighter who wrote (1312)2/19/1999 8:14:00 PM
From: porcupine --''''>  Read Replies (1) of 1722
 
Daniel: I've always thought the railroads are a great analogy for utilities in general and cable tv in particular. Supposedly, practically all the cash coming in will fall to the bottom line once the "laying the lines" is paid off.

But, as with railroads, operating and maintenance expenses are always much greater than expected. The value of rights-of-way is consistent with the fact that real estate is not depreciated -- it always has some economic value. But, valuable real estate notwithstanding, unless it's a government regulated monopoly with a guaranteed profit margin, something always goes wrong before the big cash earnings pay day arrives. Usually, that "something" is c-o-m-p-e-t-i-t-i-o-n. In the case of cable, this is delivery systems like satellite tv or video over phone lines; and there is outright competition for eyeballs like the Internet. Cable has the hitherto uncounted Intrinsic Value of being a medium for the Internet along with other two-way voice and data applications, like telephony. The Catch-22 is that retrofitting an originally one-way system requires another colossal infusion of cash.

No doubt, there are peculiarities in the TCAT situation that make it attractive to GEICO. I know these guys would not invest in something that was not a valid investment in its own right -- but I wonder how TCAT's potential as an avenue by which a long distance carrier can enter the local telco market affected their calculations.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News