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Income Investing

Regulatory Relief For Utilities And Telecoms

By Roger S. Conrad, on Feb. 12, 2017

During President Obama’s eight years in office, the Federal Communications Commission (FCC) pushed net neutrality and other policies that aimed to prevent large telecommunication companies from dominating the market.

Congressional Republicans have long chafed at these efforts, suggesting that the FCC under Trump could seek to reverse net-neutrality rules requiring telecom companies treat all data on the internet the same instead of charging discriminatory rates for some websites and services.

A shake-up at the FCC could also do away with the practice of setting aside wide swaths of capacity at spectrum auctions for smaller players and subsidizing these purchases. Eliminating this process would allow the dominant telecoms to bid for any available spectrum, likely increasing the US Treasury’s take from these auctions and crowding out smaller players.

In the past, the major telecom companies have faced probes and incurred occasional fines for anticompetitive business practices, often related to moves into new markets or services. A hands-off FCC would enable the industry heavyweights to extend their dominance and squeeze out the competition.

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