Thought Piece

How can regulatory body regulate an industry that they are 10 years behind?

How Trump and promise of FCC reform are already spurring economic growth

December 8, 2016 | By Scott Cleland

The growth starts now.

The unexpected presidential election of a very successful builder and value creator determined to spur economic and employment growth, coupled with a reelected Republican-controlled Congress, has already created significant growth opportunity by signaling a completely new business and investment environment for industry regulated by the Federal Communications Commission.

This change in business outlook is as different as night and day.

As a result, these forward-looking companies are already putting into motion new investments in infrastructure and growth opportunities that will create jobs.

There’s no need for them to wait for all the details to start, because what matters most is already known.

They aren’t going to miss the forest through the trees here and wait for everything to get in place before taking advantage of this unexpected and extraordinary opportunity to grow more than before.

First, for the next four years starting Jan. 20, the FCC will shift from being extremely regulatory and openly hostile to private investment in infrastructure and proprietary content creation, to being highly deregulatory and supportive of private investment, and value and job creation.

Since the election, every signal sent so far from the Trump Transition and Republican-controlled Congress indicates an end to the FCC’s roving, unbounded, hyper-regulation of competitive companies, a rollback of obsolete common carrier regulations, and a dramatically scaled back FCC.

Going forward, the overall cloud of regulatory risk and uncertainty hanging over FCC-regulated businesses and their investments will increasingly clear in the months and years ahead.

Second, Republican FCC commissioners were vehemently opposed to the FCC’s creation of an un-bounded Title II “Standard for Future Conduct” that has empowered FCC enforcement staff to unilaterally make up new rules of the game as they go along and play “gotcha-enforcement” after-the-fact.

This means that the FCC’s current rule-less opposition to, and serial micromanaging of, zero-rating pricing innovations – which give consumers more bandwidth for less money – will effectively cease Jan. 20, 2017.

Third, in the months ahead, a comprehensive tax reform package is expected to pass into law that will lower America’s corporate tax rates from 35 percent to roughly 15 percent.

This is one of the most pro-growth, pro-investment, pro-employment, policies any new government could enact.

Communications companies are positioned to be the builders and biggest investors in the most modern part of America’s essential infrastructure – the fiber optic backbone, 5G wireless networks, and cybersecurity components of America’s Internet infrastructure.

Already the largest investors in infrastructure in the U.S., communications companies, are also well positioned to benefit from much-discussed infrastructure-related legislation designed to encourage infrastructure investment and job creation.

That’s because a recent American Consumer Institute economic analysis “finds that broadband network companies create 4,200 more jobs than large web-based providers for every billion dollars in revenue.”

Finally, concerning merger review, the Republican FCC commissioners, and Republicans in general, believe that the FCC has abused its unbounded and unpredictable public interest test in the FCC’s redundant merger review process; and that the FCC was wrong in administratively whipsawing established antitrust precedent in high-fixed cost industries like communications from three market competitors required, to four – after the fact.

The result will be that future proposed mergers will enjoy due process and predictable antitrust-like merger reviews, rather than the FCC’s arbitrary, black-box, public interest test.

In short, more growth awaits the communications sector.

Competitive companies that this FCC has viewed as problems and monopolies that threaten bit-equality will soon return to being viewed as solutions — competitive companies which invest in essential infrastructure and create good jobs.

And the companies that produce and distribute $200b worth of the world’s best video programming will no longer face an FCC that seeks to force them to give their intellectual property away for free to the most valuable companies on the planet.

Now they can return to investing, growing, and creating value without fear of government expropriation.

The growth starts now.