Donald Trump's presidential victory may have gotten the support of large telcos and industry groups, but questions remain about how his policy approach will shape the telecom industry.
Trump’s election comes during what has been a week of new consolidation.
In just the past two weeks, three large multi-billion-dollar deals were announced that could change the landscape of the telecom industry: AT&T’s play for Time Warner; CenutryLink’s proposed acquisition of Level 3; and Windstream’s acquisition of EarthLink.
While a Reuters report suggested that Trump could possibly block its acquisition of Time Warner, AT&T remains confident that it will be completed despite the new presidential administration.
John Stephens, CFO of AT&T, said during the Wells Fargo technology, media and telecoms conference in New York that he and the company were looking forward to working with Trump and "optimistic" regulators would approve the deal.
"[Trump's] policies had his discussions about infrastructure investment, economic development, and American innovation all fit right in with AT&T's goals," Stephens said.
As CenturyLink moves forward with its acquisition of Level 3 Communications, Stewart Ewing, CFO of CenturyLink, told attendees at the Wells Fargo Securities Technology, Media & Telecom event Wednesday that it’s confident that it can get the acquisition approved in 2017 under the new presidential and FCC administration that will come into place.
“We still feel comfortable to complete the deal in the period of time we set,” Ewing said. “From the standpoint of the FCC, we think the change there will potentially be positive from the standpoint of the speed at which the deal can get approved.”
But other service providers such as Sprint aren’t as supportive about Trump. Sprint’s CEO Marcelo Claure said in September that Donald Trump “is just too risky.” As the smoke settles from the election, questions still linger about what his telecom policy will ultimately be when he takes office in January.
Anna M. Gomez, a Partner in Wiley Rein’s Telecom, Media & Technology Practice and former Deputy Assistant Secretary for Communications and Information for the National Telecommunications and Information Administration of the U.S. Department of Commerce, said in a statement that it is hard to gauge what will happen.
“Without a detailed technology platform, it is unclear what will be Donald Trump’s general tech agenda,” Gomez said in a statement. “Nevertheless, he has an overall deregulatory stance, which we expect will drive his telecom agenda.”
Although it is unclear what Donald Trump’s general technology agenda will be, being a Republican, it’s likely that he will call for a “lighter touch” regulatory stance when he sets his telecom agenda.
Groups cite lighter regulation, broadband support
A number of industry trade groups that have favored lighter touch regulation praised Donald Trump’s election.
Groups such as Tech Knowledge and the Internet Innovation Alliance said that that Trump will be able to drive new innovation and investments in the communications industry.
Fred Campbell, director of Tech Knowledge, said in a statement that President-elect Trump will help craft a new FCC staff that would rely on competitive market forces to drive investment and innovation in communications networks and services.
“The Obama Administration’s love for top-down government mandates threatened to destroy that economy, but it’s not too late,” Campbell said in a statement. “The Trump Administration has a prime opportunity to level the playing field at the FCC and work with Congress on legislation that will benefit all Americans.”
Former Congressman Rick Boucher (D), an honorary chair of the Internet Innovation Alliance (IIA) who works for a lobbying firm that supports AT&T, echoed a similar tone. Boucher said the new administration would be able to overturn the net neutrality rules that classify broadband as a Title II service under the Telecom Act.
“The decision to treat broadband as an information service unleashed a wave of investment in internet infrastructure that enabled our communications network to become the envy of the world,” Boucher said in a statement. “That progress has been undermined by the Commission's decision to treat broadband as a telecommunications service with regulatory requirements designed for the monopoly era of rotary telephones. Few regulatory changes would do more to promote investment and a stronger U.S. economy than a return to the time-honored light regulatory regime for broadband.”
Other organizations such as the NTCA, a group that provides advocacy to rural service providers, and the Schools, Health & Libraries Broadband (SHLB) Coalition expressed confidence that the new president can help them meet their missions to bring broadband to their constituents.
Shirley Bloomfield, CEO of NTCA, said that it wants to work with the Trump administration to champion the build out of rural broadband service.
“The ongoing commitment of these small rural providers to their neighbors and communities is essential in making rural America a vibrant place to live, work and raise a family,” Bloomfield said. “We look forward to working with the Trump administration and Congress to harness the enthusiasm and engagement of the rural voters who cast ballots in this election and build upon past successes to find innovative solutions to our nation’s broadband challenges so that every American – rural and urban – will have access to robust and affordable broadband.”
John Windhausen, Executive Director of SHLB, cited Trump’s $1 trillion plan to upgrade the nation’s infrastructure, including telecom services, as way to help its education and library members get more affordable broadband services.
“Connecting anchor institutions to high-capacity broadband is one of the most cost-effective ways to strengthen America and prepare our economy for the future,” Windhausen said. “Anchor institutions use broadband technologies to lift all communities, helping the most disadvantaged and rural populations, improve their education, find a job, and start a business. The SHLB Coalition is developing a proposal to promote next-generation broadband for anchor institutions, and we look forward to working with the Trump Administration as it develops its infrastructure investment plan for the future.”
FCC, regulatory transition
When Trump takes office in January, the key question is about how Trump will transition the FCC. Trump’s election as President likely means current FCC Chairman Tom Wheeler will step down immediately following the inauguration. However, Wheeler’s term does extend out to 2018 and he’s not required to leave before that.
Wheeler did say recently that he will work toward a smooth transition at the FCC under a new presidential administration.
Regardless of when Wheeler leaves his post, his successor will be selected by Trump, and the new FCC would include three Republican and two Democratic members.
The only clue that has emerged about what Trump could do is his hiring of Jeffrey Eisenach, a staunch supporter of light-touch regulation, as an aide to help Trump solidify his stance on broadband issues.
Wheeler’s pending departure is not the only issue that a new FCC will face. It’s likely that whoever takes over Wheeler’s spot will look to reverse decisions on major issues like net neutrality and broadband privacy.
Although the net neutrality rules were upheld by a Washington, D.C., appeals court, the telecom industry has appealed to the Supreme Court. If the court agrees to hear the case, and Trump is able to appoint conservative judges, there’s a chance the rules could be overturned.
In addition to net neutrality, the FCC is also still grappling with other major reforms on business data services and set-top box reform. The FCC is taking up these two issues at its November meeting.