Dish CEO Hopeful About Trump's Impact on Infrastructure, Taxes
November 09 2016 - 5:32PM
Dow Jones News
By Shalini Ramachandran
Dish Network Corp. Chief Executive Charlie Ergen said that a
Donald Trump administration could bring "a lot of potential
positives for business," including infrastructure spending and
reduced tax burden on corporations.
Speaking on the satellite operator's third-quarter earnings call
following Mr. Trump's surprise election to the presidency, Mr.
Ergen said the businessman's ascendance could usher in a "more
rational" tax code, which would incentivize companies to bring back
"billions of dollars" in money they have housed offshore to avoid
U.S. taxes.
"We think there are some positives there," Mr. Ergen said,
noting that could push companies to invest more in American
industry and infrastructure. In addition, he said lighter
regulation broadly and immigration reform in the new administration
could lead to economic growth.
Mr. Ergen also indicated he believes the president-elect is
likely to look kindly on Dish's desire to advance into offering
wireless service. He added that there is likely to be bipartisan
support to invest more in infrastructure, a policy goal Mr. Trump
has highlighted. Mr. Ergen noted that rural America -- which
overwhelmingly supported Mr. Trump -- doesn't have as much internet
connectivity as cities, and he expects "some real initiatives
there."
"This is an election of haves and have-nots, and the have-nots
voted for Donald Trump," Mr. Ergen said.
But there could also be a looming negative for Dish. Mr. Trump
has made statements against the tough, utility-style "net
neutrality" rules backed by the Obama administration, which Dish
supported. Under a Trump administration and GOP-controlled
Congress, "you may see net neutrality be challenged or weakened
going forward," Mr. Ergen said.
A rollback of those rules would be applauded by cable and
telecom companies and fiercely opposed by streaming services like
Netflix and Dish's own Sling TV.
Mr. Ergen said one of Dish's primary concerns about the proposed
AT&T-Time Warner merger is that AT&T plans to exempt its
DirecTV Now streaming service from customers' wireless data caps --
while asking other streaming services to pay for the privilege, an
approach known as "zero-rating."
"We think that's a violation of where net neutrality is today,"
Mr. Ergen said.
AT&T has said its zero-rating practices treat all streaming
services equally, given that its DirecTV Now would be paying
AT&T to waive data caps for its streamers.
Despite his concerns about the deal, Mr. Ergen said a Trump
administration may be benevolent on approving mergers. Mr. Trump
earlier declared that he would oppose the AT&T-Time Warner
merger and look to break up Comcast Corp., which in 2011 bought
NBCUniversal. Mr. Ergen noted that candidates can change their
minds.
"In general, Republican leadership, whether it's been in
Congress or the executive branch, will have a lighter hand to
regulation. I think there is going to be more flexibility in
M&A transactions," Mr. Ergen said, which could help advance
Dish's ambitions if it chose to buy a wireless carrier.
He said that companies will closely watch whom Mr. Trump taps to
lead the Justice Department and Federal Communications
Commission.
More deals may be coming. Mr. Ergen said that the AT&T-Time
Warner deal could be a "catalyst," given that it creates a behemoth
with scale in wireless and video. Dish, he noted, has wireless
spectrum and scale in video but no network to put its airwaves to
use. "If somebody puts all the pieces together -- and AT&T is
on the path to do that -- that makes it tougher," he said. "People
on the sidelines have to do something different."
For the third quarter, Dish reported a profit of $307.4 million,
or 64 cents a share, up from $196.5 million, or 42 cents, a year
ago. It offset steeper pay-TV customer losses with rate increases
and significantly decreased subscriber acquisition costs. The
company lost 116,000 overall pay-TV customers during the quarter,
compared with a loss of 23,000 subscribers last year, as its Sling
TV streaming service didn't make up for traditional pay-TV losses.
Still, revenue edged up 0.3% to $3.75 billion.
Write to Shalini Ramachandran at
shalini.ramachandran@wsj.com
(END) Dow Jones Newswires
November 09, 2016 17:17 ET (22:17 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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