Trump's New FCC Chief: Who Wins and Loses in Hollywood

6:15 AM 1/26/2017

by Eriq Gardner and Natalie Jarvey

AT&T cheers and Netflix jeers as Ajit Pai, elevated to chairman Jan. 23, sets the stage for less regulation and lax "net neutrality" rules, and one analyst predicts the move will "make it easier to do M&A."

Ajit Pai
Ajit Pai
bhijit Bhatlekar/Mint via Getty Images
  • Winners: Telecoms

    AT&T, Verizon and Comcast could benefit from "net neutrality" being rolled back. The rules require internet service providers to treat all content equally and prohibit unfairly blocking or slowing access. Pai, 44, a former lawyer for Verizon, believes this is over-regulation and may consider allowing telecoms to charge extra for higher-bandwidth services such as streaming movies or music.

  • Winners: Dealmakers

    Wedbush analyst James Dix predicts the appointment should "make it easier to do M&A, in particular the big deals that have gotten a lot of attention." That bodes well for AT&T's planned acquisition of Time Warner and other mergers that might have seen scrutiny.

  • Winners: Broadcasters

    With less regulation, broadcast and cable networks can push back against arguments that bundling TV stations with co-owned networks is anti- consumer and a threat to program diversity. Cable operators claim forcing unwanted content is unfair to customers.

  • Losers: Streaming Services

    Pai's dismantling of net neutrality would hurt Netflix, Amazon, Hulu and others that might have to pay extra (and presumably charge customers more) to stream high-bandwidth content. But Netflix CEO Reed Hastings tells shareholders his business will have leverage with internet providers because "we are now popular enough with consumers."

  • Losers: Privacy Advocates

    As consumers give over their most sensitive data in an increasingly networked age, privacy laws hardly have been updated. The FCC aimed to step into the void with rules for broadband providers, but Pai's promotion probably renders proposed regulations dead.

  • Losers: Independent Programmers

    The FCC actively has promoted diversity and vibrant competition in programming access. Those unaffiliated with major broadcasters or cable outlets complain they could find a less hospitable forum for grievances and get muscled out of business.