Policy

Now What?

Media industry has little to go on in parsing the Trump telecom agenda 11/14/2016 8:00 AM Eastern
President-elect Donald Trump speaks to supporters on Election Night following his surprise victory over Democrat Hillary Clinton.
Phil McCaul/Polaris
TakeAway

Donald Trump’s surprise win in the presidential election puts a figure in the White House who hasn’t offered much in terms of telecom policy.

WASHINGTON — Within hours of President-elect Donald Trump’s stunning victory over Democrat Hillary Clinton early in the morning of Nov. 9, a former top Federal Communications Commission official said that a Trump surrogate had already reached out to tap his brain for suggestions for a new FCC chairman.

 

Trump has not outlined a specific technology/communications policy agenda, but there have been clues or, in some cases, mixed signals.

 

On the campaign trail, he has threatened to sue media outlets and block a major media merger, but how much of his campaign rhetoric will translate to policy is the question that lingers, and not just for communications issues.

 

Related: President Trump? Wall Street Yawns

 

Trump is generally deregulatory and pro-business and has come out against the FCC’s reclassification of broadband as a common-carrier service, one of his few known communications policy positions.

 

Republicans, who now control both houses of Congress, have been seeking to roll back some of FCC chairman Tom Wheeler’s regulatory agenda, including the reclassification of ISPs under Title II.

 

So while a Trump FCC might well try to reverse the Title II decision, Congress could beat it to the punch.

 

MoffettNathanson analyst Craig Moffett said he thinks that could be the case. Last week, he reduced the price regulation risks to cable stocks across the board on the assumption that a congressional rollback was not only possible, but likely.

 

But Trump did not get to the White House by a conventional route, and his regulatory policies could follow the same peripatetic course.

 

While he has expressed his distaste for Title II classification of broadband Internet service, Trump also came out publicly, and strongly, against the merger of telco AT&T and media company Time Warner Inc., and throughout the campaign he has strongly criticized similar consolidations among media companies.

 

Campaigning in Pennsylvania late last month, Trump said his administration would try to block the deal, sounding more like a populist reformer than a deregulatory Republican, but also sounding like someone who is simply mad at the media, which he has been throughout his run for the White House.

 

“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” he said.

 

Trump also said Comcast’s purchase of NBCUniversal concentrated “far too much power” in the hands of one massive entity that is trying to tell the voters what to think and what to do.” He said deals like that “destroy democracy,” and his administration would look to stop it and others like it. He said the companies should not have been allowed to merge and said they were trying to “poison the minds of the American people.”

 

Trump had accused the media of being part of a conspiracy to elect his Democratic rival. Trump suggested libel laws should be toughened when news outlets published stories he did not like, and even invoked the FCC against one reporter.

 

Back in September, Trump said the FCC should fine National Review editor Rich Lowry after, in an appearance on Fox News Channel’s The Kelly File, Lowry said Carly Fiorina had surgically castrated Trump in a debate — although the editor used a more colloquial phrase — and added that Trump had “insulted and bullied” his way to the top of the polls.

 

Following Lowry’s comments, Trump said in a post on Twitter — his communication mode of choice during the campaign — “Incompetent @RichLowry lost it tonight on @FoxNews. He should not be allowed on TV and the FCC should fine him!”

 

Trump’s tone has not been lost on his supporters. The Washington Post illustrated a collection of post-election essays titled “Yeah, That Did Just Happen,” with a picture of a Trump supporter in a T-shirt that read: “Rope. Tree. Journalist. Some Assembly Required.”

 

A TRUMP FCC

Trump has also included lobbyists among the folks he targets with his “drain the swamp” campaign rhetoric, so he could institute more lobbyist reforms.

 

Who will lead the FCC is not usually one of the first priorities of a transition team, but the Trump team has signaled it wants to assemble the new administration’s top leadership ASAP.

 

The most recent Democratic FCC chairmen have been outside choices. Wheeler had helped with the Obama technology transition and Julius Genachowski was a former law-school classmate of the president.

 

But the most recent Republican chairs, Kevin Martin and Michael Powell, were plucked from the ranks of sitting commissioners, and the same could apply here, though both already had strong Republican ties — Martin as an attorney in the 2000 election recount and Powell as the son of former Secretary of State Colin Powell.

 

Senior Republican Ajit Pai is well-liked in industry circles and will likely be at least interim chairman.

 

Democratic commissioner Jessica Rosenworcel will have to leave the FCC by the end of next month unless the lame-duck Senate reconfirms her. That is possible, but now unlikely since her exit would remove the Democratic majority on the commission, and Wheeler’s exit would give Republicans a 2-1 majority.

 

The Republicans will have the majority once a permanent chairman is nominated and confirmed, but that could take six months or longer. Pai would be a popular choice. Another name in the mix is Jeffrey Eisenach, a deregulatory free-market economist who is a member of the transition team. Eisenach is director of the Center for Internet, Communications and Technology Policy at the American Enterprise Institute, a conservative think tank.

 

Adonis Hoffman, former chief of staff to Democratic FCC commissioner Mignon Clyburn, who had been contacted by the Trump surrogate, said he (Hoffman) had pointed to Pai as an obvious inside choice for chairman when asked for his input.

 

A top Republican communications attorney who spoke not for attribution seconded that endorsement. Pai would be the first Indian-American chair, as he was commissioner.

 

Pai has generally been supportive of the kinds of media mergers Trump attacked on the campaign trail, but Hoffman said he expected Trump to moderate the anti-media rhetoric now that the campaign is over.

 

“I’m not so sure that mergers will not get done,” Hoffman said. “Governing is a lot different than campaigning, and big companies know how to speak the language of business.”

 

Pai has been a big supporter of loosening media-ownership regulations, so a Pai FCC could well prioritize at least getting rid of the newspaper/broadcast cross-ownership rules or rolling back the tightening of joint sales agreements (JSAs) under Wheeler.

 

WHERE ACTION IS LIKELY

Republicans, including Pai, fellow commissioner Michael O’Rielly and many on Capitol Hill, have sought FCC process reforms like publishing the drafts of decisions before they are voted and a cost-benefit analysis of all new regulations. That could definitely get traction, though there will likely be fewer of those new regulations to vet.

 

And while Wheeler has taken an expansive view of the FCC’s congressional direction — under Section 706 of the Telecommunicati ons Act — to promote advanced telecom, Hill Republicans have called for a far narrower view, and Pai agrees.

 

One thing a looming Trump presidency will likely do is light a fire under the current Democratic chairman to try to get the remaining items, like the set-top revamp and reregulation of business data services, out the door before he has to exit.

 

Candidate Trump promised an “immediate review” of U.S. cyber defenses and vulnerabilities by a Cyber Review Team from the military, law enforcement and the private sector.

 

He also said he would create a joint task force to coordinate a federal, state and local law enforcement response.

 

SIDEBAR: The Regulations In Trump’s Crosshairs

WASHINGTON — President-elect Donald Trump made the following campaign promises related to pruning federal regulations.

 

• “Ask all Department heads to submit a list of every wasteful and unnecessary regulation which kills jobs, and which does not improve public safety, and eliminate them.”
• “Reform the entire regulatory code to ensure that we keep jobs and wealth in America.”
• “End the radical regulations that force jobs out of our communities and inner cities. We will stop punishing Americans for working and doing business in the United States.”
• “Issue a temporary moratorium on new agency regulations that are not compelled by Congress or public safety in order to give our American companies the certainty they need to reinvest in our community, get cash off of the sidelines, start hiring again, and expanding businesses. We will no longer regulate our companies and our jobs out of existence.”
• “Cancel immediately all illegal and overreaching executive orders.”
• “Decrease the size of our already bloated government after a thorough agency review.”

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