June 25, 2018 by Tom Cohen

Regulatory Changes Drive Service Providers to Get Busy or Get Left Behind

 

The Republican takeover of the federal government promised the end of heavy-handed regulation of business, and the FCC’s Restoring Internet Freedom Order, which took effect on June 11 ending Title II (common carrier) regulation of broadband Internet access service, certainly is a high point in this effort. So too is the FCC’s decision on June 7 to eliminate regulations that forestalled the retirement of old facilities and services. Network providers now have a relatively unobstructed path to invest in and upgrade their networks to meet customers’ demands.

It also was considered a sure thing that the Republicans would make it easier for firms to merge, with the big only getting bigger. The Department of Justice’s complaint to stop the AT&T/Time Warner transaction thus came as a surprise. After all, AT&T/Time Warner was willing to settle and abide by the same conditions imposed in 2011 on Comcast/NBCU. Well, on June 12, the US District Court acted as expected, shooting down DOJ’s case and approving the AT&T/Time Warner merger. Barely a day after the decision Comcast announced its bid for Fox, and other deals are certainly in the pipeline. 

The only twist in this free market approach comes in rural areas, where the Republican Congress and FCC want to make sure broadband is available throughout the US. Congress appropriated an additional $600 million earlier this year to bring broadband to unserved areas, and the FCC just increased the amount of support available to smaller providers.

The good news about having free markets is that the government is off your back. The challenge is that it is also off the back of your competitors and suppliers, and we know that in all likelihood they have stepped up their transactions and investments, especially with the new tax law in place.  You will see no let up for the next several years. Service providers should be plotting and implementing aggressive strategies to move forward in this environment or risk getting left behind.