The eight-year bromance between Barack Obama — who appointed the first chief technology officer for the US — and the tech industry is ending. Now what?
That’s the question the tech industry has been asking since a real-estate mogul turned reality star, with a spotty reputation with tech, was voted in as 45th president of the United States.
President Obama, a self-proclaimed geek and Trekkie, was the most tech-focused president in modern history, committing billions of dollars to support initiatives to spur tech innovation, improve education and encourage exploration and discovery. Unlike Democratic rival Hillary Clinton, Donald Trump said very little during the campaign about where he stands on most tech-related issues — though he did call for a boycott of Apple products over the company’s stance on privacy in its fight with the FBI.
One thing is clear. Silicon Valley in general isn’t excited about the next four years. In July, 150 tech leaders, including Apple co-founder Steve Wozniak, Reddit co-founder Alexis Ohanian, Wikipedia founder Jimmy Wales and Vint Cerf, considered the “father of the Internet,” wrote an open letter calling a Trump presidency “a disaster for innovation.” Some in the industry, notably broadband service providers, criticized him for policies they believe would stifle investment in infrastructure.
The outlook is “beyond grim,” weighted down by fear that the industry and world would suffer from this election, the New York Times reported Thursday.
Since Trump, 70, didn’t say all that much about tech during the campaign (he did call out “the cyber” when talking about cybersecurity concerns during one debate), industry watchers are left reading whatever tea leaves they can find until the president-elect reveals more-definitive policies.
Given that the tech industry accounts for 12 percent of all jobs, according to the US Bureau of Labor Statistics, and given Trump’s message about improving America’s economy and competitiveness, his technology policies will have a long-lasting impact.
“The onus is on him to convince us that what we have seen in the past, the erratic behavior that has been defining character of the campaign, is not what will lead policy and that we’ll see a more pragmatic approach,” said Evan Swarztrauber, communications director for the DC-based think tank TechFreedom.
Here’s what little we do know about Trump’s stand on some important tech issues.
Net neutrality became a relatively big deal in the 2008 election, but little was said during this election cycle about last year’s policy.
Net neutrality is the idea that all traffic on the internet should be treated equally. This means your broadband provider, which controls your access to the internet, can’t block or slow down the services or applications you use over the web.
That said, we do know Trump isn’t a fan of the FCC’s current regulations. In 2014, at the height of the debate to rewrite the rules around Net neutrality, he tweeted, “Obama’s attack on the internet is another top down power grab. Net neutrality is the Fairness Doctrine. Will target conservative media.”
It’s possible that an FCC led by Republicans could eliminate all or part of the rules and strip the FCC of some of its authority. If that happens, broadband providers could create so-called fast lanes and charge internet companies, like Netflix, different rates to deliver their services.
Loosening regulations around telecom will likely benefit broadband and wireless carriers. The NCTA, the Internet and Television Association, which lobbies for the cable industry, said it’s eager to work with President-elect Trump.
“We look forward to participating in a constructive and robust discussion about policies that will continue to make America a global technology and entertainment leader,” they said in a statement Wednesday.
Industry Consolidation and Broadband
Trump also seems to have taken a populist view against mergers and acquisitions. That could spell trouble for big pending mergers, including AT&T’s $85 billion takeover of entertainment giant Time Warner. When that deal was announced last month, Trump vowed to block the merger if he was elected.
“As an example of the power structure I’m fighting, AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it’s too much concentration of power in the hands of too few,” he said.
AT&T’s executives still like their chances of getting the deal approved by the US, pointing to statements Trump made in his victory speech about investing in “infrastructure.”
“His policies and his discussions about infrastructure investment, economic development and American innovation all fit right in with AT&T’s goals,” Chief Financial Officer John J. Stephens said Wednesday. “We’ve been the leading investor in this country for more than five years running, and our Time Warner transaction is all about innovation and economic development, consumer choice, and investment in infrastructure with regard to providing a great 5G mobile broadband experience.”
Encryption and Cybersecurity
The president-elect has made only vague statements about privacy and security, and downplayed Russia’s alleged hacking into the Democratic National Committee and Clinton’s campaign email servers. Still, when the Justice Department tussled with Apple over unlocking the iPhone of the terrorist suspect in the San Bernardino shooting, he called for a boycott of Apple products.
What he has said about cyber security is that there should be a review of US cyber defenses by a “Cyber Review Team.” He also told the The New York Times in July that “certainly cyber has to be in our thought process, very strongly in our thought process… Inconceivable the power of cyber… you can make countries nonfunctioning with a strong use of cyber.”
The biggest boost to the tech industry could come from Trump’s plans to lower corporate tax rates to encourage companies to invest their money in the US.
There’s a good chance that money could be invested in the US, said Rob Atkinson, president of the Information Technology & Innovation Foundation (ITIF). But it’s not a given. In 2004, the US allowed American companies to bring in the profit they’d earned overseas in the hope they would hire more workers. Most of the money went to executives and shareholders, instead.
Trump has also called for high import taxes on products, which could drive up prices for consumers on tech goods. In January, Trump said in a stump speech, “We’re going to get Apple to build their damn computers and things in this country instead of in other countries.”
Apple, which declined to comment on Trump’s statements at the time, designs its products at its Silicon Valley headquarters, but uses a Chinese contractor to build them. If Apple products were manufactured in the US, the price of an iPhone could rise to as much as $900 to offset worker wages versus the $650 cost of an iPhone today.
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Additional Reporting by CNET