Partners: Trump Could 'Relax' Net Neutrality And Threaten Telecom Consolidation

Republican President-Elect Donald Trump hasn't laid out specific policies around the IT and telecommunications industries, but partners believe that the new administration could impact existing policies and pending acquisitions.

Tom Wheeler, Chairman of the Federal Communications Commission (FCC) appointed by President Barack Obama is stepping down. According to Politico, Trump will likely appoint Jeffrey Eisenach to fill Wheeler's spot, a known critic of Wheeler's policies, including net neutrality. As a result, partners are wondering if net neutrality will be challenged or changed under a Trump presidency.

"With Wheeler stepping down from the FCC, I see net neutrality relaxing," according to Jeff Newton, Vice President of Operations and Engineering for Telecom Brokerage Inc. (TBI), a Chicago-based master agent.

[Related: ConnectWise CEO Hopes President-Elect Trump Will Cut Taxes And Overtime Pay Requirements For Small Business Owners]

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Net neutrality is a hotly debated set of regulations that promote the general idea that everyone with an internet connection should have equal access to content of all types, regardless of the owner or creator. The rules reclassified wireless or fixed-line broadband providers as "common carriers," which gives the FCC permission to regulate them as it regulates traditional telephone service providers.

Net neutrality was favored by the Obama administration, but Trump spoke out against the ruling in 2014, referring to net neutrality as a "top down power grab" and an "attack on the internet" by Obama.

But Trump hasn't been specific with his own policies around IT, so while many partners see changes coming for net neutrality, uncertainty remains.

"It's hard to say for sure what he will do, but as a business leader, he's coming across as anti-business by talking negatively about net neutrality," said one solution provider executive that asked not to be named.

Trump's past comments reflecting disapproval of the net neutrality regulations could be good news for the telecom providers, however, including AT&T, Comcast and Verizon, who have also outwardly opposed net neutrality.

"It will be interesting to see how the telecoms respond in the interim as we figure out where [Trump] stands," said Rob Chamberlin, co-founder and chief revenue officer for DataXoom, a Walnut Creek, Calif.-based solution provider. "But since it’s a Republican-led House and Senate, we are going to have to bet on the historical beliefs of the party, instead of the candidate."

TBI's Newton added that if net neutrality rules are weakened or removed entirely, the profiles for application-aware solutions, such as SD-WAN, will be raised.

"As an IT decision maker, seeking products that provide a sophisticated routing overlay independent from the carrier transport will ensure providers aren't de-emphasizing third-party cloud or email services in favor of their own competing products," he said.

As a part of the most recent net neutrality ruling in June, Newton said he would be keeping an eye on whether broadband providers' reclassification as "common carriers" will change.

"There are several providers prominent in the channel that have built solid products around broadband services, [and] changes to this classification may impact their products and services," Newton said.

Despite Trump's public stance against net neutrality, which favors more competition among carriers, the President-elect has vowed to block certain mergers in the telecom industry at the same time, citing "too much concentration of power in the hands of too few."

Trump in October vowed that AT&T's planned acquisition of Time Warner for $85.4 billion would not be approved under his administration.

TBI's Newton believes that Trump will stand by his comments made during his campaign, and the AT&T/Time Warner deal will face additional scrutiny as a result. But while the fate of the AT&T's acquisition plans is up in the air, Newton, among other partners, expects CenturyLink's plans to acquire Level 3 and the Windstream/EarthLink to pass through the regulatory bodies "quickly with no issue," due to the size of these companies, he said.

When reached for comment regarding the pending acquisition and Trump's comments by CRN, AT&T pointed to a statement made by its CFO John Stephens following the election.

"We really look forward to working with President-elect Trump and his transition team. His policies and his discussions about infrastructure investment, economic development, and American innovation all fit right in with AT&T's goals," Stephens said. "Our Time Warner transaction is all about innovation and economic development, consumer choice, and investment in infrastructure with regard to providing a great 5G mobile broadband experience."