@Home won't suffer from FCC

Wall Street is watching closely as the Federal Communications Commission weighs whether to regulate high-speed cable Net access services such as @Home, but most analysts aren't concerned, at least for now.

In fact, some speculate there will be little short-term impact on the industry sector's stock. Time Warner and MediaOne's Road Runner Net cable service is not a separately traded security. Shares of @Home were trading at 32.5, having hit a high of 57.25 and a low of 18 during the past 52 weeks.

"My sense is that this business is still in its infancy, and Washington is generally smart enough to know to let budding industries find their ground," said Theodore Henderson, an analyst at Janco Partners. "Regulatory impact will be a part of these Internet stories moving forward."

In spite of the rosy predictions, @Home's stock was down 3.52 percent today, or 1.19, at 32.5. The stock fell 4.62 percent yesterday and has traded as high as 57.25 and as low as 18 over the last 52 weeks.

Cable rate regulations were introduced because of the strong grip individual cable companies had in certain markets. "If you wanted 50 channels, you had one cable company in a city," added Henderson. "If you didn't like its rates, you could always have your rabbit-eared TV."

At the present time, there are severals ways to get on the Internet, including wireless connections, dial-up access, and cable modems.

"There is enough competition out here and competition will drive the rates to what they should be," noted Henderson. "Ultimately, this will impact [cable access company] stocks, but I don't think there will be any short-term effect on shares of @Home."

Others think that the long-term impact could even be positive. "Given the proprietary marketing treatment that @Home would always be given by their owners, who are largely cable players, we suspect they could continue to have exceptional potential for growth," said Frederick Moran, an analyst at Furman Selz.

Moran added that if @Home were forced to open its high-speed network to competitors, it would only help the company expand its subscriber base.

Still, many analysts agree that any regulatory government moves are far off in this arena and hardly necessary.

"This is a highly competitive environment where there will be plenty of competition to bring Internet access to the home and office," said Henderson. "Luckily, the reality is that you are a long way from seeing any rate regulation in this area."