Communications service providers – at least the largest – seem to have weathered the 2009 period of the recession rather well, as history suggested they would. The largest cable and telco service providers still grew revenue, through the third quarter, and there are, at this point, no reasons to believe, when the year is over, that this was a full-year trend.

 

When all the numbers are tallied, I would guess that many smaller providers suffered over the past two years, which also would be consistent with historical experience.

 

But thoughts about what will happen next year naturally arise at this point of the fiscal year. And that is an issue with no easy answer, yet.

 

I'm an optimist about the U.S. economy, but also a realist. I'm an optimist because, historically speaking, 100 percent of our downturns have returned to growth, mostly without any external assistance. I'm a realist because the global environment and the nature of the U.S. government response will shape, and could hinder, the recovery.

 

The bottom line is that I would bet on a bit faster growth in 2010, compared to 2009, in both enterprise and consumer markets, with one big warning.

 

Nobody knows yet whether what we are headed for is a double dip recession. But it is worrisome to me that President Obama voluntarily brought up that possibility in a recent interview.

 

“It is important though to recognize if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy in a double-dip recession,” he said.

 

It perhaps goes without saying that this is not the only problem we face. Still, since my own forecast is that the debt burden is about to explode, that raises the possibility of a double dip recession that it seems to me we are being prepared for.

 

Treasury borrowing is expected to increase for several years as the United States tries to pay off the cost of pulling itself out of recession.

 

But the number of options open to the administration for bringing down the deficit is extremely limited. Almost all of choices involve sharp cuts in government spending or sharp increases in taxes.

 

You can make your own guess as to which of these paths will be taken. Either could choke off the modest recovery by again undermining consumer and corporate spending.

 

The chances of second recession are rising rapidly. For communications service providers, that simply means more of the tough slog they have been through for the past two years. Smaller providers might struggle again, but for them a third or a fourth year of stringency will have more serious and negative consequences.

 

So maybe the best way to characterize my thinking about 2010 is strategic optimism but realistic concern about a double dip recession. If that doesn't happen, history suggests several growing years ahead for communications services, though as always the composition of buying will continue to shift in the direction of wireless and next-generation services, and away from legacy.