One day after Manning's latest monthly checkup, Dr. Robert Watkins gave the winless Indianapolis Colts and their franchise quarterback some good news in this miserable season: The four-time league MVP is healing.

"I am encouraged with what Doc had to say," Manning said. "I am happy that I can increase my rehabilitation program as outlined by him ... and the Colts' medical staff. I am hopeful for continued progress in this next phase of my rehab."

Watkins believes Manning's recovery will continue.

The 35-year-old quarterback hasn't practiced since having a spinal fusion Sept. 8. The surgery was intended to repair a damaged nerve in his neck that caused weakness in his throwing arm. It was Manning's third neck surgery in 19 months and the most risky and complicated of the three.

It sounded as though things were going well when Manning provided reporters with his first medical update, after a checkup in early October. He was thrilled when doctors cleared him to move from the press box to the field and he started taking brisk walks around the practice field.

A month later, in early November after another checkup, Manning said doctors were still waiting for the fusion to become firmly healed before letting him do more strenuous workouts. The comments prompted speculation that Manning may not recover fully from the operation.

On Sunday, television commentators on the Colts-Panthers broadcast even discussed the possibility of Manning retiring after the season, a contention team vice chairman Bill Polian shot down on his weekly radio show Monday night.

In a statement issued by the team Thursday night, Watkins said Manning's neck has finally healed -- right in the two- to four-month timeline predicted by neck and back specialists who did not treat Manning.

Indy's franchise player is expected to speak with reporters later this week.

"X-ray and CT examination of the surgical area shows that the fusion performed in September has achieved firm fixation," Watkins said. "Peyton will now be allowed to increase the intensity and breadth of his workouts as tolerated. There remains every indication that his recovery will continue.

"There still is no timetable for Peyton's return to practice, which is one of many steps in his expected return to game action. He is working hard on a rehabilitation program. ... His response to this plan in the future will dictate his return date."

Manning had less invasive neck surgery in May, but when the nerve did not regenerate as quickly or as well as anticipated, he had the fusion.

Indy (0-11) has kept Manning on the active roster all season in hopes he could start throwing later this month, though it remains unclear whether that will happen.

With Manning, the Colts were a perennial Super Bowl contender.

After being drafted No. 1 overall in 1998, Manning didn't miss a start in his first 13 seasons, starting 227 consecutive games including the playoffs. He holds every major passing record in franchise history, has 399 career TD passes and trails only Brett Favre and Dan Marino on the career passing list.

Without Manning, the Colts have fallen apart.

Streaks of nine straight playoff appearances and nine straight 10-win seasons have already ended, and the Colts are 0-11 for the first time since 1986.

And they have not found an answer at quarterback.

Kerry Collins started the first three games after signing a $4 million contract, then was lost for the season with a concussion. Curtis Painter started the next seven games but after he threw eight interceptions and one touchdown pass in the last five games, coach Jim Caldwell decided to bench Painter and start Dan Orlovsky.

The questions will continue into the offseason, too.

Indy is the heavy favorite to get the No. 1 pick in April's draft, and many expect the team to select Stanford quarterback Andrew Luck.

First, though, Indy must decide what to do with Manning, who is owed a $28 million bonus before free agency opens. If the Colts opt out of the deal, Manning would become a free agent.

Polian said Monday the Colts could keep Manning and draft Luck and still remain competitive under the salary cap, and team owner Jim Irsay has said he believes the two sides could work out a new contract that would make it less costly to keep Manning.

But first, the Colts need to know whether Manning can come back -- something that seems more plausible after Watkins' exam.