Editor's Corner—Charter, AT&T run long-term risks in cozying to polarizing Trump administration

Charter Chairman and CEO Tom Rutledge (right) met with Donald Trump on March 24 as the president took credit for a call-center repatriation initiative that was announced two years ago. Image: White House
Editor's Corner Dan Frankel

NBC News released the results of a survey a few days ago showing that 49% of U.S. consumers say they’re less likely to buy a product endorsed by the current U.S. president.

According to the survey, conducted by Simmons Research, 29% said they’d boycott such a brand. Only 18% said they’d likely use a product endorsed by Donald Trump.

To be clear, I’m not trying to make a political statement here. It’s just the facts, ma’am, alternative or otherwise. But we can all agree that the President is a polarizing figure, right? And because we can agree on this one narrow sliver of truth, we can have a coherent discussion on what’s good for telecom business, right? 

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Let’s all agree that, if you are the CEO of a large American corporation, you generally support lower corporate taxes and deregulation. It’s not about being left or right, it’s what you do.

It makes perfectly good sense why AT&T CEO Randall Stephenson to wax on about the benefits of a corporate tax rate lowered to, say, 20%. It's also clear why Charter Communications Chairman Tom Rutledge called last year's sudden and dramatic regulatory turnabout for the cable industry, "cool."

Despite the benefits AT&T and Charter might obtain from the Trump administration, it might not make good business sense for these guys to fly too close to the sun. Not when he’s perceived as a black hole to more than half of the consumer base.

Indeed, captains of telecom industry need to understand that bedding with this administration could have serious long-term public-perception consequences. Just on an average Tuesday this week, the press secretary had to issue an apology for using a bad Nazi-era analogy. During Passover. If things were to get much worse, a CEO who got in too tight with the Oval Office could end up with a figurative public head-shaving.  

Perhaps ExxonMobil seems to understand this risk. The oil company took the rather remarkable position of asking Trump last month not to ditch the Paris agreement because it’s an "effective framework for addressing the risks of climate change.” 

A man who also might take longer term corporate goals under advisement is Rutledge, who now oversees a cable company with vital constituencies situated in the very blue regions of Los Angeles and New York. I live in the former—trust me when I say the region is represented by that 29% portion of the NBC News survey.

I think Rutledge took a significant risk when he appeared in the Oval Office on March 24 and sat alongside Trump, as the President took credit for two Charter initiatives that were launched well before the shocker Nov. 8 national election.

What was the head of a nice urban-clustered cable operator like Rutledge doing in a place as controversial as this?

To recap, Trump “announced” Charter’s plan to repatriate 20,000 overseas call-center jobs—an initiative Rutledge has been talking about for the last eight quarterly earnings calls. Oh, and that pledge to invest $25 billion into broadband infrastructure and technology over the next four years, made to the Tom Wheeler FCC during the run-up to the Time Warner Cable purchase? All Trump, too. 

“Charter … follows … Exxon, Intel, Lockheed, Boeing and many others that have recently announced millions of dollars of investments and thousands of jobs coming to the United States following my election victory,” Trump said.

There was Rutledge, standing beside Trump in a passenger seat not too long ago occupied by, Chris Christie, watching a President with a record-low approval rating co-opt his company’s plans for his own political agenda. 

In a large portion of Charter’s footprint, this was not a good look. 

Now, again, fiduciary duty is what it is. If the government has the fate of your $85.4 billion purchase of Time Warner Inc. in your hands, you might just be doing your job when you tell investors what an “impressive” CEO-type guy Trump is. 

The same dynamic might apply if you're Charter, and you want the government to ditch an FCC requirement ensuring you overbuild broadband service into 1 million American homes. 

But where Rutledge publicly visited the White House, Stephenson met with Trump behind closed doors. He wasn’t in an Oval Office photo-op that will exist long after the president leaves office, voluntarily or otherwise. - Daniel, @FierceCable

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