Telecom Industry Excited For New FCC Chairman Ajit Pai

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With a change in the U.S. administration, Ajit Pai has been installed as the new Chairman of the Federal Communications Commission (FCC) and the telecommunications industry is seemingly excited about his appointment. Following President Trump's appointment of Pai, many businesses and Chief Executives in the industry have put out positive statements commending the choice. Pai has a reputation for being encouraging for businesses and less so for consumers, and he has previously opposed net neutrality. Furthermore, Pai never supported strengthening consumer privacy laws but has expressed his support of big mergers. Various businesses have extolled Pai's virtues including his "keen intellect" and understanding of "the appropriate amount of regulation" to encourage business growth, according to Charter's Executive Vice President (EVP), Catherine Bohigian. Essentially, individual companies and industry groups are excited to see the FCC get a Chairman with a reputation for wishing to remove "regulatory barriers" for businesses. Those sentiments are certainly not lost on the industry as the FCC has significant influence over the telecommunications sector and the outgoing chairman, Tom Wheeler, has mostly supported consumers during his term.

When the former FCC Chairman was initially appointed, the industry was also excited by the announcement. Wheeler was a former lobbyist for the cable industry and businesses expected him to promote anti-regulatory policies. However, this was not the case as Wheeler turned out to be very much in favor of consumers. Following the latest turn of events, consumer support groups are concerned since consumer privacy and net neutrality protections could either be slowly chipped away or removed. It is possible that Pai will have a similar pro-consumer approach as Wheeler, but the industry does not believe that's likely.

Pai's appointment could also pave the way for mergers between some of the established names in the industry such as Sprint and T-Mobile US as both companies have certainly considered consolidation in the past. At this juncture, it is unclear if Sprint and T-Mobile would want to merge, given the considerable differences between the businesses. T-Mobile US is experiencing strong growth and Sprint is in a recovery stage. Away from the third and fourth largest wireless carriers, we may see some of the larger companies announcing mergers and corporate deals that could result in fewer companies competing for customers.

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