Public Interest Groups Say New Trump Mobile Raises Ethical Concerns
The Trump Organization announced Monday that later this year, it will launch Trump Mobile, a mobile virtual network operator, and a gold-colored smartphone, which it said will eventually be made in the U.S. The launch would create ethics concerns regardless, but even more so given the Trump administration's pressure for the FCC to answer directly to the White House, public interest groups said.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
“Trump Mobile is a next-generation wireless provider with bold ambitions and a customer-first mission,” said a press release. The MVNO will offer 5G service “through all three major cellular carriers. At the heart of Trump Mobile is its flagship [plan], which is available for only $47.45 per month.”
The monthly price is higher than what’s offered by low-cost competitors, such as Mint Mobile, which features service at $30 a month, or Verizon prepaid, which starts at $35 a month for talk and text.
“This is a mainstream mobile offer,” Recon Analytics' Roger Entner told us. “It’s not going to change the market.” Subscribers will likely be measured in the hundreds of thousands, he added. “It’s the golden phone that makes it different. Everything else is the same.” Entner predicted the offering may prove popular for some supporters of President Donald Trump who want to show off their branded phones.
Public Knowledge Legal Director John Bergmayer said it’s hard to know “where to start” in delineating potential conflicts of interest. “I would certainly not want to be an MVNO in the position of competing with one of the president's companies.” It would be difficult for FCC Chairman Brendan Carr to rule objectively on any issues raised by the MVNO, he added.
“There would be a potential conflict of interest there even in normal times,” Bergmayer told us. “But with the Trump administration arguing against the independence of independent agencies and claiming them all to be under direct White House control, will Trump Mobile get special treatment?” He also asked if Trump's phones, which may be manufactured in China, would be exempt from tariffs imposed on other companies. “What about favoritism, if not toward Trump Mobile, then to the carriers who provide the network capacity” or the companies that make the phones?
“While the details of the Trump phone plan remain murky, the plan appears to be far more expensive than options available from existing competitors,” Public Citizen co-President Robert Weissman said in a statement. That suggests Trump Mobile “will join a long line of Trump consumer scams and ripoffs. And good luck getting a federal agency to hold the company accountable if service fails or things go off the rails.”
The gold phone "is, at minimum, likely to rely heavily on imported parts, raising questions about how Trump’s chaotic tariffs will apply to any imported parts for the Trump phone,” Weismann said.
The president owning a company in a heavily regulated industry overseen by an agency head he appointed “poses incredible corruption risks," said Meghan Faulkner, of Citizens for Responsibility and Ethics in Washington, in an interview. While past presidents divested from their personal businesses and even stock holdings, Trump has repeatedly violated the Constitution’s emoluments clause through his business entanglements, she said. Faulkner said that the mobile phone venture stands out from Trump’s other businesses because telecom companies are much more regulated by the federal government than the hotel or golf course industries.
“There really aren’t a lot of tools to enforce ethics rules against the President,” Faulkner said. Congressional lawmakers should scrutinize Trump’s foray into phones and enforce the emoluments clause, she said. Federal ethics officials at the FCC and other agencies should also weigh in on any FCC matters involving the company, she said. The phone business -- with Trump’s social media and cryptocurrency projects – creates an easy pathway for interested parties to line Trump’s pockets with little transparency, she said.
Ethics concerns are probably similar to those raised by other businesses launched by the Trump family, emailed Andrew Schwartzman, senior counselor at the Benton Institute for Broadband & Society. Since the Trump Organization says the MVNO would use the networks of all the major carriers, that “raises the possibility of a reverse auction” in which the major carriers “compete to offer the best deal,” he said, calling that hypothetical scenario "little more than a barely concealed bribe.”
“There is no way to offer a phone ‘built in the U.S.,’ of gold or any other color, today or at any time in the near future,” Schwartzman said. “Other than the case and the glass, and perhaps a few chips, there is probably no other component in a phone made in the U.S. right now.”
Trump Mobile “is going to revolutionize cellphones [and] mobile calling,” Trump Organization Executive Vice President Eric Trump said on Fox Business Monday. “We’re going to do it better, we’re going to do it safer, we’re going to have more functionality, more features.” He noted that the call center will be located in St. Louis. He said only that the phone would eventually be made in the U.S. but didn’t offer details on manufacturing.