What the Trump win means for telecommunications and broadband economics

Donald Trump’s most clearly articulated economic plan is that he intends to impose a lot of tariffs on foreign-made goods entering the U.S. We can also speculate that he won’t allow tax breaks given in 2018 to lapse as they’re scheduled to do, and that Republicans will probably address taxes as one of the first items on their agenda. The effect of these policies on the telecommunications sector will be a mixed bag. Grant Spellmeyer, CEO of the trade group ACA Connects, predicts that the new administration will immediately put a big focus on taxes, and a lot could change besides just extending previous tax cuts. The Wall Street Journal did an analysis, saying that less tax funds would result in a higher federal deficit and put upward pressure on interest rates. And as we’ve seen over the last couple of years when the Federal Reserve has increased interest rates, that’s difficult for companies that are carrying debt or that want to engage in mergers and acquisitions. Dish Network, for example, has almost crumbled under the weight of its high interest debt. And the higher cost of capital also crimped some capital investment and merger and acquisition activity in the telecommunications sector as companies wait for rates to go down.