AT&T CEO Welcomes Incoming Trump Administration6 Dec, 2016 By: Erik Gruenwedel
Randall Stephenson believes new president will cut corporate taxes and apply moderation to regulation, including net neutrality
AT&T CEO Randall Stephenson Dec. 6 told an investor group he believes President-elect Donald Trump will reshape the Federal Communications Commission into a regulatory group better reflecting industry concerns in a rapidly evolving video distribution ecosystem.
Speaking at the UBS 44th annual Global Media and Communications confab in New York, Stephenson said the incoming administration has contributed to the FCC putting on hold proposed industry regulation regarding business data services and privacy issues, among others, that he believes portends smoother sailing for communication companies going forward.
AT&T in October agreed to acquire Time Warner, parent of Warner Bros., HBO, CNN, TNT and TBS, in a transaction valued at $109 billion, including debt. Pending regulatory approval, combining AT&T’s distribution channels, which include mobile and DirecTV, with Time Warner’s content creation, the companies aim to give consumers increased choices via ad-supported and subscription OTT and TV Everywhere models.
Stephenson is slated to answer questions about the merger before the Senate Judiciary Committee Dec. 7.
The CEO mentioned watching Jeffrey Eisenach, a member of Trump’s transition team and vocal critic of net neutrality and government regulation on broadband investment, on a morning news program and what it means to the telecommunications market.
“We’re hopeful that perhaps a more moderate approach to some of these regulations is in the making in a Trump Administration.”
Stephenson cited a recent Trump speech in Cincinnati, Ohio, where the president-elect voiced his concern about the impact regulation over the past years has had on job creation and business growth.
“Those comments by themselves, as a business person, gives you some encouragement that maybe we can see some moderation of some of the regulatory aspects that we’ve seen over the last few months.”
Stephenson said he is most enthused about proposed corporate tax reform and its impact on domestic capital investment as a percentage of GDP.
“We’re at levels you haven’t seen since World War II. And one just has to ask, ‘why?’ When you’re the highest-taxed country in the developed world, that has an implication on an investment in this country. If we achieve any kind of meaningful corporate tax reform, I am quite convinced that it’s going to change this trajectory in terms of capital investment. And capital investment is a driver of productivity.”
Stephenson added he believes economists perhaps critical of the new administration are underestimating the impact of pulling back to a more rational level of regulation.
“I would tell you that for the first time in a long time we’re doing business plans. And for 2017, we’re actually doing scenario planning on what if economic growth is higher than were expecting?”
Specifically, Stephenson is hoping a revamped FCC would look favorably at so-called “zero rating,” an industry practice whereby mobile network operators providers don’t charge subscribers for data used by specific apps or Internet services via their network.
Critics such as the Electronic Frontier Foundation characterize zero-rating as the “bleeding edge” of the net neutrality debate. The group contends that telecoms such as Verizon and AT&T only offer zero-rated data from select content providers in a “pay-for-play” arrangement the EFF claims hurts smaller content holders and undermines a level playing field.
AT&T is proposing DirecTV subs be able to stream video content on their mobile devices without incurring additional data charges.
“It’s kind of interesting the FCC is somehow focused on this. We’ve been doing this since the 1950s. Back then it was called, 'dial Sears Roebuck’s 1-800 number' and Sears Roebuck picked up the tab on a long distance [phone] charge. Nothing new here.”
Stephenson said AT&T first introduced zero-rating in 2008 when it made an agreement with Amazon Kindle whereby purchase of an electronic book included the data charge paid by Amazon. He said DirecTV and others pay a wholesale Internet data rate that is available to any size company. The CEO said zero-rating has proved popular among consumers streaming video.
“[Zero-data] is out there … in a rather significant way. The FCC believes this [somehow violates] net neutrality principles. There’s no question it’s pro-consumer. I think ‘free’ is pro-consumer, but we’ll have the debate and go through the process.”