Trump Victory Throws Doubt on AT&T-Time Warner Deal, Net Neutrality
November 09 2016 - 8:40AM
Dow Jones News
Donald Trump's victory in the presidential campaign throws doubt
on AT&T Inc.'s proposed acquisition of Time Warner Inc. and
could undermine the government's net neutrality rules. But many of
his positions on the technology and telecommunications sectors are
largely unknown.
Mr. Trump said in October that he would block the AT&T-Time
Warner deal, and that he would try to break up the Comcast
Corp.-NBC Universal merger. In both cases, Mr. Trump said the media
is controlled by too few people.
Shares of AT&T fell 2% in early premarket trading while Time
Warner shares, which were already trading at a wide discount to
AT&T's offer, fell 4.4%.
Mr. Trump also made statements against net neutrality, saying it
would "target conservative media" and comparing it against the
Fairness Doctrine, which required broadcasters on government
airwaves to provide balanced coverage of controversial issues. (Net
neutrality requires all web traffic be treated equally but doesn't
involve content.)
Analysts at New Street Research believe Mr. Trump will likely
align with traditional Republican thinking on telecom policy.
Particularly on complex, low-publicity items, "partisan gravity
will be sufficient to bring Trump's view into line with his party's
well-established path," researchers wrote in a note to clients
earlier this year.
It would be difficult, but not impossible, for Mr. Trump to
unwind the Federal Communications Commission's 2015 net neutrality
rules. Those rules were upheld by a Washington, D.C., appeals
court, but the telecom industry has appealed to the Supreme Court.
If the court agrees to hear the case, and Mr. Trump is able to
appoint conservative judges, it is plausible the rules could be
overturned.
More than a year ago, after Mr. Trump began his presidential
campaign, the New Street Research analysts published a
tongue-in-cheek research note about the impact his presidency would
have on the U.S. telecom market. The note joked about how AT&T
and Verizon Communications Inc. would succeed under a Trump
presidency because "They are big. They are huge. They are
tremendous."
New Street Research sent out a revised note a few months later
after Mr. Trump began winning states in the Republican primary. We
"thought the prospect of a Trump presidency quite low," they
wrote.
Analysts at Citigroup say Mr. Trump's victory could affect some
media stocks as his embrace of social media boosts Twitter Inc. and
Facebook Inc., while his confrontational relationship with
traditional outlets hurts CBS, Disney, Time Warner and Fox.
Likewise, Mr. Trump's stance on net neutrality could help cable
companies like Comcast Corp. and Charter Communications Inc. but
hurt over-the-top players like Netflix Inc., Citigroup said.
Thomas Gryta contributed to this article.
Write to Ryan Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
November 09, 2016 08:25 ET (13:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Netflix (NASDAQ:NFLX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Netflix (NASDAQ:NFLX)
Historical Stock Chart
From Apr 2023 to Apr 2024