A Trump Presidency may mean we say goodbye to Net Neutrality

Trump has also come out against media consolidation, including the AT&T/Time Warner deal

Financial trends and news by Steven Loeb
November 9, 2016
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When Donald Trump actually becomes President next year, there are, of course, a myriad number of ways he could change this country. Some for the better, some for the worse. That includes everything from gun rights to immigration to environmental policy. The country is going to look a lot different very soon.

That could also include freedom of the press and the media. During his campaign, Trump called for the opening up of libel laws, so he could more easily sue news organizations. He was also famously scornful of the press, openly calling out specific reporters during his rallies who he felt were not being fair to him.

To say that Trump had an adversarial relationship with the press would be an understatement, but potential retribution on the press is just one of the ways that Richard Greenfield of BTIG sees President Trump potentially changing the media landscape when he takes office. 

"A key question when it comes to Trump is whether he leans more Republican or more Populist as it relates to media/tech policy and his government appointments," wrote Greenfield on Wednesday.

One of the most interesting things to watch will be how Trump handles media consolidation, of which he does not seem to be a fan. For example, last month, after the deal for AT&T to buy Time Warner for $85.4 billion was announced, Trump was actually one of the first politicians to come out against it, saying, "Deals like this destroy democracy."

"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," said Trump.

According to Greenfield, with Trump as President, both companies will have to change how they approach regulators, including whether or not they want to avoid being reviewed by the FCC.

"Although we always believed AT&T Time Warner were prepared to go to court (against the DoJ) to win approval of this transaction, the odds that becomes necessary may be higher now (extending the time frame for a deal to close)," he wrote. "While the legal basis for blocking the AT&T Time Warner remains unclear to us, given Trump’s campaign trail commentary and his distaste for Time Warner’s CNN division throughout the campaign, the odds of regulatory approval appear to have dropped."

I'm not a fan of Trump, but I do approve of his skepticism over these types of deals, which never seem to benefit the consumer in the long run.

On the other hand, one thing that Trump could potentially do that I would not like is repeal Net Neutrality, which he called a “top down power grab" by the Obama administration. That is something that could hurt consumers by leading to higher prices.

“On the consumer front, if broadband is reclassified as a Title I service, ISPs would have substantially less concern over price regulation (which is possible under Title II if unforbeared by the FCC).  In turn, we suspect ISP consumer pricing power would rise faster than investors have assumed under a Democratic administration,” said Greenfield.

Changing campaign ads

One of the other things Trump may have done, albiet inadvertently, was change the way that political campaigns spend money on TV ads. 

Trump was able to win the Republican primary, and the general election, with minimal ad buys, especially compared to his opponents. Instead he used digital platforms to get his message across, including Twitter and Facebook Live. Hillary Clinton spent double what Trump did in TV ads, only to lose the election.

"We wonder whether his success pushes political candidates in the future to rethink how they allocate their marketing spending between TV and digital platforms. Could be a meaningful negative for broadcasters, offsetting the aforementioned benefit from higher retrans," said Greenfield.

I take this potential development with a grain of salt, considering two things: first, Trump was already a well-known celebrity when he entered the race, and, second, Trump was given around about $5 billion worth of free media coverage during the election campaign, more than twice the amount given to Clinton.

So, he had advertising, he just didn't have to pay for it. That won't be the case with other candidates. 

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