DISH DISH Network Corporation

By Shalini Ramachandran 

Dish Network Corp. Chief Executive Charlie Ergen said that a Donald Trump administration could bring "a lot of potential positives for business," including infrastructure spending and reduced tax burden on corporations.

Speaking on the satellite operator's third-quarter earnings call following Mr. Trump's surprise election to the presidency, Mr. Ergen said the businessman's ascendance could usher in a "more rational" tax code, which would incentivize companies to bring back "billions of dollars" in money they have housed offshore to avoid U.S. taxes.

"We think there are some positives there," Mr. Ergen said, noting that could push companies to invest more in American industry and infrastructure. In addition, he said lighter regulation broadly and immigration reform in the new administration could lead to economic growth.

Mr. Ergen also indicated he believes the president-elect is likely to look kindly on Dish's desire to advance into offering wireless service. He added that there is likely to be bipartisan support to invest more in infrastructure, a policy goal Mr. Trump has highlighted. Mr. Ergen noted that rural America -- which overwhelmingly supported Mr. Trump -- doesn't have as much internet connectivity as cities, and he expects "some real initiatives there."

"This is an election of haves and have-nots, and the have-nots voted for Donald Trump," Mr. Ergen said.

But there could also be a looming negative for Dish. Mr. Trump has made statements against the tough, utility-style "net neutrality" rules backed by the Obama administration, which Dish supported. Under a Trump administration and GOP-controlled Congress, "you may see net neutrality be challenged or weakened going forward," Mr. Ergen said.

A rollback of those rules would be applauded by cable and telecom companies and fiercely opposed by streaming services like Netflix and Dish's own Sling TV.

Mr. Ergen said one of Dish's primary concerns about the proposed AT&T-Time Warner merger is that AT&T plans to exempt its DirecTV Now streaming service from customers' wireless data caps -- while asking other streaming services to pay for the privilege, an approach known as "zero-rating."

"We think that's a violation of where net neutrality is today," Mr. Ergen said.

AT&T has said its zero-rating practices treat all streaming services equally, given that its DirecTV Now would be paying AT&T to waive data caps for its streamers.

Despite his concerns about the deal, Mr. Ergen said a Trump administration may be benevolent on approving mergers. Mr. Trump earlier declared that he would oppose the AT&T-Time Warner merger and look to break up Comcast Corp., which in 2011 bought NBCUniversal. Mr. Ergen noted that candidates can change their minds.

"In general, Republican leadership, whether it's been in Congress or the executive branch, will have a lighter hand to regulation. I think there is going to be more flexibility in M&A transactions," Mr. Ergen said, which could help advance Dish's ambitions if it chose to buy a wireless carrier.

He said that companies will closely watch whom Mr. Trump taps to lead the Justice Department and Federal Communications Commission.

More deals may be coming. Mr. Ergen said that the AT&T-Time Warner deal could be a "catalyst," given that it creates a behemoth with scale in wireless and video. Dish, he noted, has wireless spectrum and scale in video but no network to put its airwaves to use. "If somebody puts all the pieces together -- and AT&T is on the path to do that -- that makes it tougher," he said. "People on the sidelines have to do something different."

For the third quarter, Dish reported a profit of $307.4 million, or 64 cents a share, up from $196.5 million, or 42 cents, a year ago. It offset steeper pay-TV customer losses with rate increases and significantly decreased subscriber acquisition costs. The company lost 116,000 overall pay-TV customers during the quarter, compared with a loss of 23,000 subscribers last year, as its Sling TV streaming service didn't make up for traditional pay-TV losses. Still, revenue edged up 0.3% to $3.75 billion.

Write to Shalini Ramachandran at shalini.ramachandran@wsj.com

(END) Dow Jones Newswires

November 09, 2016 17:17 ET (22:17 GMT)

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