Heading into 2016, one of the big question marks for the cable industry is whether Comcast will follow through on its push to establish its own wireless service offering.
 
The giant MSO has been hard at work expanding its Wi-Fi network, which could likely support a Wi-Fi-first wireless service similar to Google’s Project Fi. Comcast also has a deal in place with Verizon that would give Comcast access to Verizon’s wireless airwaves, which Comcast could use as a reliable backbone for cellular data, voice and messaging services.
 
Comcast has said it is testing options for wireless service. The renewed interest in getting its own Comcast-branded wireless service off the ground could mean the MSO is a serious contender for airwaves in next year’s 600 MHz incentive auctions.
 
As MoffettNathanson analyst Craig Moffett says that Comcast’s potential plans to buy spectrum in that auction is one of the biggest overhangs on the stock. He says that wireless has in the past has had a negative impact on the stock and that fears about Comcast blowing tons of capital on spectrum or a subsequent network could contribute to that. Nevertheless, Moffett sees an upside.
 
“Perhaps we are contrarian for saying so, but it is honestly not something we worry too much about.  In fact, we think Cable’s prospects in wireless are a net positive, and a WiFi-based wireless offering that gradually supplants an MVNO with an owned-and-operated low-frequency canopy for coverage is something that, from both an engineering and a financial perspective, makes quite a bit of sense,” Moffett wrote in a research note.
 
Elsewhere in the note, Moffett is similarly optimistic about the cable industry’s ability to withstand the cord-cutting threat and the potential momentum cable stocks could gain from falling capital intensity, increasing broadband market share, and the possibility for a usage-based pricing model for Internet services.
 
Moffett also remains confident the Charter-Time Warner Cable merger will be approved.
 
In the satellite sector, Moffett was less enthusiastic, specifically about Dish Network and its prospects of propping up or selling its wireless spectrum. He says LightSquared moving out of bankruptcy and reaching a GPS settlement with John Deere, short resources for potential spectrum buyers, and low expectations for upcoming spectrum auctions could all potentially devalue Dish’s spectrum position.