In a review of the cable and satellite TV sector, Merrill Lynch maintained a "neutral" rating on DirecTV (nyse: DTV - news - people ) and said it expects "continued high spending" from the satellite TV provider. The research firm said DirecTV is gearing up for new initiatives and an anticipated slow down of net subscribers. "Cable is clearly becoming more aggressive with the rollout of digital products (including DVRs, HD and robust on-demand programming offerings), improved high-speed data offerings and phone service via VoIP," said Merrill Lynch. The firm highlighted DirecTV's recent complaint filed against pay-per-view service In Demand as an example of increasing competition between cable and satellite providers. In Demand is owned by Comcast (nasdaq: CMCSA - news - people ), Time Warner (nyse: TWX - news - people ) and Cox Communications. "DirecTV accuses In Demand of establishing an illegal pricing structure for its two high definition channels, INHD and INHD2, that favors cable over satellite. In Demand charges a fee based on the number of digital subscribers an operator has. Since all satellite customers are digital, DirecTV believes this pricing structure is unfair," said Merrill Lynch. "This dispute is the latest example of cable and satellite fighting over content to gain a competitive advantage in winning more customers."
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