Even by his own early-term standards, Wednesday was a particularly polarizing day for Donald Trump.
That even Fox News confronted Trump’s press secretary about the new president’s highly questionable voter fraud investigation, while conservative Arizona Senator John McCain took the president to task for greenlighting the torture of terrorism suspects, gives you some idea of the level of bipartisan pushback Trump received less than a week into his term.
I’m admittedly a left-leaning Noam Chomsky fan, a card-carrying ACLU member and a proud protesting denizen of the Coastal Elite. But I’m not trying to make any political statement here. Honest. A lot of you are smart folks who lean right, and many of you voted for Trump. Certainly, in a cable business that had to sit on its hands over the last two years and watch Google quietly and effectively influence FCC telecom policy from its cozy relationship with the White House, I definitely get why November’s election result had a very tangible attraction.
As MoffettNathanson principal analyst Craig Moffett noted this morning, “It isn’t hard to figure out why so many investors have found the cable stocks an attractive place to be post-election. All the broad themes of the Trump rally—deregulation infrastructure, tax reform, domestic vs. international—seem almost tailor-made to trigger a cable rally."
But no matter how we see the facts—alternative or otherwise—and without making qualitative judgments, I think we all can agree that Trump is volatile and controversial. Right?
Which brings us to some interesting contrasts, as CEOs of telecom’s top corporations report fourth-quarter earnings. Some are embracing the notion of making corporate earnings great again and fully buying in. Others are being a bit more trepidatious regarding a new president who is radioactive to half the country.
Speaking to investors this morning, Comcast Chief Executive Brian Roberts tried to walk a fine, subdued line, acknowledging that his company will benefit from promised corporate tax breaks and deregulation under Trump, but not betraying too much support or enthusiasm for a president who comes into office with a record-low 45% approval rating.
“We’re looking forward to working with new president and new regulatory leaders,” Roberts simply said. “We’re encouraged. Stay tuned.”
Contrast that with peer Randall Stephenson, who a day before, while delivering AT&T’s Q4 report, laid it on pretty thick. He said how “impressed” he was with the new president who is “definitely a CEO.”
Teleconferencing with investors Wednesday, Stephenson, who understandably wants the federal government to approve AT&T’s $85.4 billion purchase of Time Warner Inc., and has had to ponder the meaning of Trump calling a prized Time Warner asset “fake news,” detailed his meeting with the president two weeks ago.
Calling himself a “supply-side guy,” Stephenson described Trump as a trickle-down savior to the telecom industry, seemingly in the mold of none other than Ronald Reagan himself.
“If we want to get off this 1% to 2% growth plane, there is nothing that will trigger that like tax reform. I mean, everybody knows the numbers. We have the most uncompetitive tax structure in United States—it’s the highest tax rate in the developed world in the United States. And to bring that into competitive levels, and you pick your number what tax rate you think that is, will have a stimulative effect, we’re convinced. In fact, we know at AT&T, if you saw tax rates move to 20% to 25%, we know what we would do; we would step up our investment levels and there are things we would like to accelerate, if we had a more favorable tax environment.”
Meanwhile, in regard to Trump quickly replacing Tom Wheeler with deregulatory-focused Ajit Pai as FCC Chairman, Stephenson added, “Nobody thinks that regulations should go away. We all believe that the customers still needs protection and safety and all that is so critical. But we've had a regulation that has been just unpredictable; it’s interfering with how you think about designing products; it’s interfering with how you think about entering new markets. And if you really begin to get confident, the regulatory burden is rationalize somewhat, that in and of itself is going to free up investment. And so, I think as you know, GDP and economic growth is much a function of attitude and confidence as anything else.”
Indeed, Stephenson has now gone on record as having a very positive attitude and a Gipper level of confidence in the new president, despite all the noise.
Stephenson is all in on the guy and what he sees as a classic trickle-down agenda. But even many conservatives agree, we’re pretty flippin’ far from Ronald Reagan here.
We’ll know in the ensuing 16 quarters whether Stephenson’s confidence was prescient or foolishly misplaced.