Even Wall Street Is Nervous About Comcast's Latest Bid To Grow Bigger For Bigger's Sake

Comcast's latest effort to grow even larger is spooking even the company's investors. "Growth for growth's sake" has been the mantra of the telecom and TV sectors for years. Once growth in any particular market (like broadband) saturates, companies begin nosing about for efforts to grow larger in other sectors, even if it it's well outside of their core competencies (see Verizon Sugarstring, Go90). Unfortunately for the end user, such growth isn't accompanied by any meaningful parallel investment in quality product or customer service, a major reason so many users "enjoy" Comcast services today.

At the same time, this growing power results in increased efforts to thwart any effort to rein in this power, leaving oversight of the natural monopolies more precarious than ever (see: net neutrality). That's exceptionally true for Comcast, where the one-two punch of fading state and federal oversight, expiring NBC Universal merger conditions from its last 2011 megadeal, and a growing monopoly over broadband is forging a perfect storm of trouble.

Comcast's latest gambit came over the weekend, when the nation's biggest cable operator toppled 21st Century Fox with a $39 billion for Sky broadcasting, Europe's biggest pay TV operator. But even Wall Street stock jocks, traditionally more than happy to cheerlead mindless growth for growth's sake, have become nervous about the expansion, worrying that Comcast's overseas exploits are little more than a pricey distraction:

"Craig Moffett, an analyst at MoffettNathanson LLC, downgraded Comcast's stock Monday to neutral, saying the company had "grossly overpaid for Sky." Timothy Horan, an analyst at Oppenheimer, also downgraded Comcast's stock, citing the company's need to invest instead in the U.S., where it faces growing competition from wireless and online TV rivals."

"It's going to be incredibly hard to justify having paid such a high price," Moffett said in an interview Sunday. "This is an asset that neither Disney nor Comcast investors wanted to win."

Comcast stock price took a major tumble as a result. The biggest problem for many investors is debt. Like AT&T's acquisition of Time Warner, the deal saddles Comcast with so much debt it's going to be forced to cut corners on other fronts in order to shore up the losses. Usually, at least in telecom, that results in cuts to customer service. It also results in companies nickel and diming captive customers harder than ever, whether that means usage caps and overage charges, bullshit fees, or even charging users more money if they want to protect their own privacy.

As you might expect, Comcast tried to put a more positive spin on its latest looming acquisition, company CEO Brian Roberts bubbling over about the overseas expansion:

"This is a great day for Comcast. Sky is a wonderful company with a great platform, tremendous brand, and accomplished management team. This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally. We couldn't be more excited by the opportunities in front of us. We now encourage Sky shareholders to accept our offer, which we look forward to completing before the end of October 2018."

The problem, of course, is the same one Comcast has always faced. Its ragingly incompetent customer service has made it the laughing stock of the tech industry for the better part of the last decade. What Comcast actually needs is to pause, invest in overall quality and support, and focus on its core competencies. But because traditional broadband is never profitable enough, quickly enough for Wall Street, Comcast executive eyeballs are always fixed everywhere other than fixing some of the company's many, fatal flaws.