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Regulation

Telcos Tight-Lipped on Trump Travel Ban as Tech Titans Take Fire

While the rest of the US tech industry fulminates over the Donald's efforts to impose a travel ban, the telecom sector has been conspicuous by its silence. A legal challenge against Trump's move, aimed at preventing the citizens of several Middle Eastern countries from traveling to the US, has won support from nearly 100 companies. Signatories like Google and Facebook, whose facilities teem with foreign expertise, fret that visa restrictions will hinder business development. Yet not a single major telco has added its name to the list.

Their silence is perhaps not surprising. Telcos including AT&T Inc. (NYSE: T) and T-Mobile US Inc. have already spoken approvingly about some of Trump's other plans. Besides proposals for tax cuts, those include an overhaul of Internet rules that could make it easier for telcos to favor certain web services over others. Telecom sector executives seem unlikely to feel as warmly about the decree on immigration, which has hit opposition from US courts as well as other technology players. Yet none wants to risk upsetting the notoriously thin-skinned tweetaholic.

As well as hoping for tax breaks, and a business-boosting overhaul of "net neutrality," telcos have also been optimistic that Trump's administration will be prepared to wave though takeover deals that were previously blocked. Those could include the sale of T-Mobile US to Sprint Corp. (NYSE: S) or one of the country's cable operators, whose bosses have also been tight-lipped on the ban. Last week, more than 1,000 employees of Comcast Corp. (Nasdaq: CMCSA, CMCSK), the country's biggest cable company, took to the streets of Philadelphia in protest. But Comcast refuses to comment when asked about its response to the ban.

AT&T, meanwhile, is desperate to convince the new president that its $85 billion takeover of media giant Time Warner Inc. (NYSE: TWX) should be allowed. Trump had criticized the proposed deal during the presidential election campaign, describing the mooted tie-up as an example of "the power structure I'm fighting."

To the average telco, the benefits of tax breaks, lightweight net-neutrality regulation and industry consolidation far outweigh any concern about an immigration clampdown. In sharp contrast to some web players, telcos have not drawn a strong link between business success and unfettered access to overseas talent. That seems partly to do with their lack of international presence. With their domestic focus, many look parochial next to the likes of Facebook and Google (Nasdaq: GOOG).


For all the latest news from the wireless networking and services sector, check out our dedicated Mobile content channel here on Light Reading.


Moreover, experience will have taught industry executives that any criticisms of Trump or his policies usually provoke a venomous reaction. Barely a week passes when the president's Twitter feed does not feature some invective about an individual or organization whose worldview differs from his own. And the travel ban, among other moves, proves that Trump is prepared to back up his rabble-rousing rhetoric with punitive measures. Like zookeepers entering a wild animal's enclosure, telcos may be treading very carefully.

If they have decided any resistance is futile, then operators should be fearful. Often depicted as antagonists, telcos and web players prefer to highlight their opportunities for collaboration, insisting they have a symbiotic relationship. If that is so, then what is bad for the web players can hardly be good for the telcos. Heralded as an anti-terrorist measure, the travel ban also hints at Trump's protectionist instincts. In the long term, the trade war he threatens to unleash could have dire consequences for US consumers, squeezing expenditure on telecom services. It could drive up the cost of critical telecom equipment, including the iPhones that have fueled a decade-long boom in the usage of mobile services. Apple Inc. (Nasdaq: AAPL), unsurprisingly, is one of the companies that have not been afraid to challenge Trump's travel ban.

By tiptoeing around the immigration issue, telcos are also drawing attention to the gulf that still exists between them and the rest of the technology industry. Despite wanting to emulate the success of the web players, and adopt their cultural norms, telcos are still operating along very different principles. But as software expertise and so-called "DevOps" capabilities become more important in the telecom industry -- as many executives insist they must -- telcos may come to share Google's outspoken concern that immigration controls will lock out valuable skills. They might eventually wish they had lent their considerable weight to the Trump opposition.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

brooks7 2/9/2017 | 6:41:14 PM
Re: Pragmatism vs virtue-signalling wanlord,

The reason I say that is that the entire point of the the H1-B is the old PhD for $48K.  These positions have to be advertised knowing that nobody will take them.  It is required by law that Americans must be offered the position before an H1-B worker be hired.  The way around it is to offer the position dramatically below market.  Otherwise all US citizens that apply must be screened before an H1-B is used.

That is why this notion of low cost is interesting.

seven

 
wanlord 2/9/2017 | 5:14:48 PM
Re: Pragmatism vs virtue-signalling no, I didn't say that. You are inferring it. My point is they tend to find and employ the cheaper and lower caliber engineers, while you look at companies (like in Silicon Valley) with the best software engineers in the world it's because they recruit globally for the best talent, pay well for it, offer outstanding relocation packages, etc. I don't see telcos doing that.
brooks7 2/8/2017 | 10:00:30 AM
Re: Pragmatism vs virtue-signalling So Wanlord...you basically just posted that Americans are cheap, terrible Engineers.  That seems rather over the top right?

seven

 
wanlord 2/7/2017 | 7:45:05 PM
Re: Pragmatism vs virtue-signalling Telcos like Verizon don't hire much from outside of the US because they don't like sponsoring visas.  They prefer to get cheaper and faster labor locally, even though the calibar of talent may be lower. And they are highly regulated so want to stay on Trumps good side. They are happy about this adminstrations view of Net Neutrality as well. 

 

 
yarn 2/7/2017 | 9:56:00 AM
Re: Pragmatism vs virtue-signalling That deserves a T-shirt:-)
sbicheno 2/7/2017 | 5:05:27 AM
Pragmatism vs virtue-signalling It's a tough call and, as you say, dependent largely on where your interests lie. I loved the alliteration in the headline and it inspired me to try to take it even further: Telcos Tongue-Tied on Trump Travel Tiff as Tech Titans Turn Tables. Somewhat forced, I admit.
Carol Wilson 2/6/2017 | 2:52:12 PM
No-Win Situation President Trump is certainly willing to call out specific companies on Twitter and has impacted stock prices using that bully pulpit. I am not surprised that US-based companies are taking careful heed of that. I think there is a fair amount of foreign-born talent inside the telcos as well, however, so it will be interesting to see how their employees respond if they perceive there is a lack of support for their ongoing freedoms at the top. 

This is one more indication of the unfamiliar turf on which we are all treading. 
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