Telecom Industry Sees Relief in Trump Policy Agenda
December 09 2016 - 8:30AM
Dow Jones News
The telecommunications industry is embracing the idea of a Trump
administration.
President-elect Donald Trump's promises to reduce corporate
taxes and to eliminate regulations have been welcomed by executives
from an industry facing intense oversight. Four of the biggest
players generate more than $340 billion in annual revenue from
largely domestic operations.
"I think that it's very clear there's going to be less
regulation," T-Mobile US Inc. Chief Financial Officer Braxton
Carter said this week. "I think that it's hard to imagine that
there's not going to be more openness to consolidation."
AT&T Inc. chief Randall Stephenson this week noted that the
Federal Communications Commission has stopped moving ahead on
passing several rules such as privacy oversight and business
broadband pricing. Republican congressional leaders last month
asked the agency to stop taking controversial regulatory actions
until the new presidential administration is on board.
During the administration of President Barack Obama, the FCC has
had two chiefs, both of whom have taken strong positions on
everything from the open internet to merger review, often at odds
with industry heavyweights. Two major wireless mergers were
torpedoed by federal authorities in recent years.
Republican FCC commissioner Mike O'Rielly said Wednesday he was
encouraged by Mr. Trump's comments about the "detrimental impact of
the current stifling regulatory environment on the American
economy."
"I particularly like his call for the elimination of two
regulations for every new one created," Mr. O'Rielly said.
One key area for optimism is taxes. Verizon Communications Inc.
chief Lowell McAdam this week expressed hope that the Trump
Administration will be able to lower the corporate rate. "We are
not planning on getting into the 15% range; that would be great if
it did," Mr. McAdam said at the same conference.
AT&T's Mr. Stephenson, who has long pushed for changes in
the corporate tax code, said that tax relief could increase capital
investment across the economy and improve productivity.
AT&T has a lot on the line right now as a review of its
proposed $85 billion Time Warner Inc. takeover begins, a deal that
Mr. Trump addressed on the campaign trail as one he would block as
president. Mr. Trump hasn't commented on his position since the
election.
While the telecom market is dominated by huge national players,
many smaller telecom companies depend on regulatory protections
pushed by Democrats in recent years to help compete with their
larger brethren.
"Traditional Republican telecom policy has favored incumbents
who are heavily engaged in regulatory capture over innovators like
us," said David Morken, the founder of two firms, Bandwidth.comand
Republic Wireless, that use internet technology to offer low-cost
phone service.
Mr. Morken is a lifelong Republican, but "every election I have
to choose between voting personal conviction or business
interests." Together, his companies employ about 500 people and
generate more than $200 million in annual revenue.
Dane Jasper, CEO of Sonic.net, a Santa Rosa, Calif.,-based
internet service provider said that Democratic regulators have
acted to promote competition, but he had some hope for Republicans
under Mr. Trump.
"It's not clear to me that a Republican-led FCC wouldn't also
foster open competition," he said. "Perhaps the Republican ideals
of free market will extend beyond the instinct to protect
incumbents."
Mr. Jasper pointed out that the FCC under former President
George W. Bush "dismantled competition" in favor of the traditional
telecom companies. "I hope we don't see that again," he said.
Write to Thomas Gryta at thomas.gryta@wsj.com and Ryan Knutson
at ryan.knutson@wsj.com
(END) Dow Jones Newswires
December 09, 2016 08:15 ET (13:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Time Warner (NYSE:TWX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Time Warner (NYSE:TWX)
Historical Stock Chart
From Apr 2023 to Apr 2024