Editor’s note: Analysts from Technology Business Research see major changes ahead in the telecom industry’s future under a Donald Trump Administration. In the first of a multi-part report, the analysts predict what will happen under the FCC.

Contributing analysts include:

  • Michael Sullivan-Trainor, Telecom Executive Analyst
  • Chris Antlitz, Telecom Senior Analyst
  • Michael Soper, Telecom Analyst
  • Patrick Filkins, Telecom Analyst

HAMPTON, N.H. – The inauguration of Donald J. Trump as president of the United States will have a direct and indirect impact on the broader economy as well as individual sectors, such as telecom. TBR believes President Trump’s policies will likely create a favorable climate for the telecom industry in the near term.

TBR sees five key areas where the Trump administration is likely to positively influence and/or directly impact the U.S. telecom industry:

 FCC: Loosen net neutrality and unhinge ISPs from Title II

 Tax reform: Lower corporate tax rate and cash repatriation tax rate

 M&A: Fewer obstacles to consolidation

 Capex: Encourage infrastructure development via lower taxes and stimulus programs

 China: Maintain ban on China-made infrastructure

The first point:

FCC: Loosen net neutrality and unhinge ISPs from Title II

Likely Policy: TBR expects the Trump administration to loosen the rules around net neutrality and overturn classifying ISPs as common carriers under Title II regulation. Impact: More flexibility around net neutrality regulations would enable operators to bring differentiated services and new business models to market. Network slicing could take center stage as a popular means of providing tiered services tailored to the needs and wants of end users.

Operators may also be able to better monetize over-the-top (OTT) content owners like Netflix to stream content with different service levels. At a high level, loosening the restrictive regulations around net neutrality and Title II would help telecom operators increase revenue and alleviate margin pressure.

Current Federal Communications Commission (FCC) Senior Republican Commissioner Ajit Pai is Trump’s likely pick to replace FCC Chairman Tom Wheeler. Though he was appointed by President Obama, Pai’s regulatory philosophy is based on encouraging competition rather than regulation; avoiding special treatment of firms; and matching current marketplace and economic conditions, which means doing away with antiquated FCC regulations.

Further, Pai advocates the spread of broadband as a platform for internet freedom, free speech and public safety, and eliminating waste, fraud and abuse in federal programs. These positions appear in line with the Trump transition team’s agenda to reduce government spending and regulation.

More radical moves, such as abolishing the FCC and giving its oversight duties to the Federal Trade Commission, may be considered down the road, but for now all signs point to a loosening of business restrictions.

Next: Tax reform: Lower corporate tax rate and cash repatriation tax rate