Trump Presidency Baffles Telecom Prognosticators

The ascendency of Donald Trump as the favorite to be the Republican nominee for president is raising the same kinds of questions in communications circles as it has on many other fronts. Few major communications players have rallied to his support, just as he has tallied few endorsements among Republican officials nationwide. Industry officials express uneasiness with Trump. They said it's unclear who he would pick for his transition teams on the FCC and communications issues, or who he would tap to lead the FTC or FCC, as NTIA administrator, or for the other key positions overseeing communications policy.

It's also unclear whether the conventional road to a leadership position would change under Trump. Current FCC Chairman Tom Wheeler campaigned for President Barack Obama and was one of the leading fundraising bundlers for his campaign. Former Chairman Julius Genachowski was a law school friend of Obama’s (see 0901140138) and an adviser to his 2008 campaign. Former Chairman Kevin Martin was deputy general counsel of George W. Bush’s 2000 presidential campaign and a member of President-elect Bush’s transition team before being nominated for the commission and eventually becoming chairman (see 0503170120). The Trump campaign didn't comment Monday.

The growing conventional wisdom is that though Trump casts himself as an outsider and change candidate, his policies would largely follow the free-market principles of other Republican administrations. New Street Research concluded (see 1603020020) that last week in a note to investors: “We suspect he would favor reversing current FCC efforts on pre-empting state municipal broadband bans, Set-Top Boxes, Special Access, and Privacy, while being more sympathetic to consolidation than [DOJ] and FCC have been in recent years." Obama’s "attack on the internet is another top down power grab,” Trump tweeted in November 2014. “Net neutrality is the Fairness Doctrine. Will target conservative media.”

Senate Commerce Committee Chairman John Thune, R-S.D., disavowed interest in being vice president if Trump were to ask him. “I’m not interested in that job,” Thune told reporters last week. “I have a good job -- well, some days it’s a good job.” Thune and Trump haven't personally spoken, said Thune, the third-ranking Republican in leadership and the source of presidential speculation in years past. “We’ll have an opportunity when we have a nominee to talk about that agenda,” said Thune, an active lawmaker on telecom policy who has sought a bipartisan net neutrality deal and advanced spectrum legislation, of harmonizing the party’s presidential nominee platform with that of Hill Republicans. “There’s a lot of game left to play,” said Thune, who repeatedly has said he intends to support the Republican nominee regardless of whether it’s Trump or anyone else.

"Anyone who says with confidence that they know what a Trump FCC would look like is engaging in pure conjecture,” said former Commissioner Robert McDowell, a Republican, now at Wiley Rein. “He has no track record in this area and his policy positions regarding [telecommunications, media and technology] issues, if he has any yet, are a complete unknown,” McDowell told us. “If any of us have learned anything from this election cycle, it is that conventional wisdom no longer applies and we should all expect the unexpected." McDowell has endorsed Sen. Marco Rubio, R-Fla, for the nomination.

The prospect of a Trump presidency is unknown and scary for many in the Washington telecom industry, one telecom lobbyist told us. That lobbyist knows of no one in Washington who supports Trump and said few have any idea what to expect at all for what Trump would want out of his FCC. The lobbyist cited the lack of a substantial Trump donor base, limiting the ability to see which stakeholders might donate to his campaign and therefore be relevant contenders for assuming a role in a potential Trump administration.

Lukewarm on Net Neutrality?

Trump has been “lukewarm” on net neutrality, in stark contrast to challenger Sen. Ted Cruz, R-Texas, who has called it “Obamacare for the Internet,” said Richard Bennett, a free-market leaning blogger and network architect. “Trump has proposed some very disturbing desires to shut down portions of the Internet used by criminals, which we don’t know how to do,” Bennett said. “He seems to believe that Silicon Valley can implement magical backdoors that can only be opened by good guys, another completely unrealistic wish. It’s unclear who, if anyone, is giving Trump his tech policy advice, but it’s fair to say that a Trump FCC would be as random as the collection of proposals he’s espoused.”

A top communications lawyer and Democrat predicted many Republican insiders in the communications world will end up supporting likely Democratic nominee Hillary Clinton.

“Donald Trump will upend the status quo in telecom,” predicted Jim Patterson, an analyst at Patterson Advisory Group. “Title II status will likely be withdrawn, and net neutrality rules will likely be rewritten. Most importantly, Trump will likely lean on Congress, rather than the FCC, to quickly freshen up the rules. And he will usher in a new wave of consolidation and dealmaking.” A year ago, the Wheeler FCC agreed to regulate ISPs under Title II of the Communications Act, perhaps the most controversial telecom policy call of the last eight years.

No one really has a clear idea of Trump’s likely policies or who he would appoint to key policy positions, said Randolph May, president of the Free State Foundation. “I am much more comfortable with someone that I know in advance has a good grasp of sound regulatory policy and steady free market, rule of law-oriented views,” May said. A “let’s make a deal” approach is unlikely to lead to sound policy, he said. “Even though no one is always happy with the press, I don’t like the way Trump talks in pointed terms about going after the press or reducing First Amendment protections.” But other industry observers told us they expect Trump to largely follow the practices of other Republican administrations.

Nothing Too Scary

"Trump would surprise us by his conventional style of governing,” predicted Adonis Hoffman, chairman of Business in the Public Interest, who consults with business and has worked for Democratic FCC Commissioner Mignon Clyburn. “I suspect he would look for the most credentialed and qualified appointees and hold them to exacting standards. He is, most of all, accustomed to strict reporting and accountability. That might not work so well for an independent agency, but he would bend the separation of powers as much as he could.” Hoffman said Trump isn’t afraid of innovation or risk and would likely encourage the FCC to explore new technologies. “I'm not so sure he would be any better or worse than our last three presidents on communications policy,” Hoffman said. “In other words, he does not scare me.”

Trump as candidate has had nothing to say about the FCC, “and even if he had, as we know, how that translates to actual governance is often very different,” said Larry Downes of the Georgetown Center for Business and Public Policy. “Washington insiders may have some basis to speculate, or they may just like speculating. But out here in [Silicon] Valley, we’ve got nothing to go on.” Tech policy rarely comes up in presidential campaign except when a news story, like the Apple/FBI standoff on unlocking the iPhone, is discussed by the candidates, he said. “The candidates weigh in and then move on. There’s nothing substantive,” Downes said. “I’ve come to think on balance that it’s for better. The innovation economy is too important to the real future of America to treat as a political football during an election.”

Trump is hard to predict because he has little history on communications policy, said a broadcast lawyer. “The most one could say is that he is business-first, so that’s likely good for industries and not the Free Presses and Public Knowledges of the world,” the lawyer said. “Although one could suppose he would help public interest fundraising efforts quite a bit.”

One of the secrets of Trump’s success is his ability to appeal to both populists and traditional Republican pledges to deregulate, said Harold Feld, senior vice president at Public Knowledge. “This makes him a blank slate and very hard to predict,” Feld said. “It is also clear that he does not regard telecom as a huge issue. Trump has toed the line like every other Republican candidate to undo Title II reclassification. Other than that, we don't know much.” Feld said it wouldn’t be a surprise of Trump were to go after cable companies as monopolies overcharging people, “especially given his disdain for the press.”

“I think the most likely focus for Trump would be big headline items on expanding broadband. Things like spectrum -- especially 5G, but also just generally making wireless bigger and better,” Feld said. “Similarly, I would expect Trump in the ‘restoring America's greatness’ theme, to push on expanding broadband and the tech transition/upgrade of the phone network.”

“Trump will be particularly wary of outcomes that could be perceived as giveaways to corporate interests, since his independence is fundamental to his brand,” said satellite consultant Tim Farrar. That may make it harder to get approval for spectrum repurposing efforts like LightSquared/Ligado, Pacific Data Vision or Globalstar, all of which “can and have been characterized previously as providing a windfall for hedge funds,” he said.