Comcast's stock has been jumping over the last few weeks on the belief that the incoming Trump FCC will be going significantly easier on incumbent broadband ISPs and cable providers. As we've been noting, both of Trump's telecom transition team members have deep ties to the telecom sector and a are eager to see the existing FCC defanged. As a result companies like Comcast can expect significantly less regulatory punishment for bad behavior, as well as a regulator that's more likely to approve major deals (like the acquisition of T-Mobile).
As a result, Comcast stock has seen a
significant, notable jump throughout November, setting an all-time stock high of $69.16 last Friday.
“Comcast is in the right place at the right time in the Trump rally,” MoffettNathanson senior analyst Craig Moffett told Variety. “It is mostly domestic, pays relatively high taxes, and should benefit from deregulation.”
Telecom analyst Amy Yong similarly tells Comcast's hometown paper the Philadelphia Inquirer that the incoming Trump FCC will be strong supporters of "coop-etition" among big media players, despite having indicated during the campaign that massive deals (like AT&T Time Warner) would be blocked. In fact, Trump's advisors have been very vocal in questioning the need for an FCC that protects consumers whatsoever.
“Most of the original motivations for having an FCC have gone away,” Trump telecom advisor and former Sprint lobbyist Mark Jamison said in a blog post last month.
"Telecommunications network providers and ISPs are rarely, if ever, monopolies," believes Jamison. "If there are instances where there are monopolies, it would seem overkill to have an entire federal agency dedicated to ex ante regulation of their services."
That said, Comcast isn't just benefitting from a more big-business-friendly regulatory environment. As AT&T and Verizon back away from unwanted DSL customers they don't want, cable's overall broadband monopoly is growing larger than ever before (despite Jamison's claims such monopoly power doesn't exist). Between this and a more Comcast-friendly FCC poised to roll back previous efforts like net neutrality and privacy rules, the future is looking rosy for Comcast (and its ever-expanding usage caps and overage fees).
Less competition and regulatory oversight than ever may be a boon for investors on Wall Street, but it could spell trouble for Comcast customers.