Telecom Deregulation, Consolidation Among Key 2017 Market Factors, Analysts Say

positive for all telecom and cable fixed and wireless broadband providers including AT&T, Verizon, Comcast, Charter, Sprint, T-Mobile, CenturyLink, Frontier, Windstream and Cincinnati Bell," they wrote investors Tuesday. But they said the biggest factor affecting industry valuations was "the rate at which the market believes video is migrating to broadband (OTT) and specifically to mobile broadband." Another significant factor is "the interplay of fiscal forces on interest rates, taxes and the dollar," they said, suggesting AT&T "is poised to be among the biggest beneficiaries of corporate tax reform." The analysts said Commissioner Ajit Pai is likely to become acting chairman and "at a minimum refuse to enforce rules he opposes and possibly go further and officially forbear from all aspects of Title 2 price and other regulation of broadband." Some sort of bipartisan compromise could be attempted to codify net neutrality principles, "but to what degree they ban services like 'paid prioritization,' 'zero rating' and other related services remains a very open question with positive optionality for carriers," they wrote. In the incentive auction, the analysts said the most they expect industry to bid collectively is $20 billion, with cable, and particularly Comcast, the biggest swing factor. They believe AT&T buying Time Warner will likely win approval. But "the market is vastly over-reacting" to the prospect of a Sprint/T-Mobile materializing, though odds of regulatory approval under the Republicans would be better than they were under the Democrats, they wrote: And 5G fixed wireless broadband is coming, with Verizon having the most aggressive deployment schedule.