Carr Already a 'Very Consequential' Chair of the FCC: Levin

“Trump, as a matter of his personality, wants to replace the free market with the market for his affections,” Levin said. “You see it at the FCC in terms of what they are trying to do to change media … content.” Carr has said, in effect, that “Trump attacked the media, and I’m going to carry out that agenda,” Levin said. In Carr’s view, he’s making the media “more fair,” but other people see his actions as making it “more biased.” Basing decisions on the “market for Trump’s affections” isn’t “a conservative principle,” Levin added.

In response to a question from O’Rielly, Levin said that as a longtime Democrat, it isn’t difficult for him to predict what a Republican administration will do. Republicans aren’t “mysterious” about their actions. Washington “rhetoric” is “often very divorced from Wall Street reality,” and an analyst has to translate what Washington says in a way that makes sense for investors, he said.

The biggest issue for investors this year has been EchoStar and its spectrum, Levin said, noting that Carr’s letter in May to EchoStar Chairman Charlie Ergen about the company’s spectrum holdings forced its hand (see 2509090036). If EchoStar had taken the FCC to court, the company would have won, Levin said, but Carr put Ergen in a position where he couldn’t get the refinancing he needed in Q2 of next year, so he was “forced to sell spectrum.”

In another important development, DOJ didn’t oppose T-Mobile’s purchase of spectrum and other wireless assets from UScellular (see 2507110045), but in doing so, it started “a lot of concerns about spectrum aggregation among the top three wireless guys,” Levin said. “That caused huge consternation on Wall Street” and concerns about whether EchoStar’s deals would go through. At the end of the day, DOJ won’t block EchoStar’s sale of spectrum to AT&T or SpaceX “because there are no other options,” he said, predicting that the DOJ will look at and allow both transactions.

Carr argues that selling spectrum to SpaceX will “be great for competition” and create a fourth facilities-based wireless competitor, Levin said. But “I doubt it, and pretty much everyone on Wall Street doubts it.”

Levin said he also continues to believe that Trump's tariffs face legal problems, a view that has nothing to do with being Republican or Democrat. “In fact … litigation is being pushed by very conservative Republicans.” Levin's work as a former Democratic official who is now an analyst is like being a former Los Angeles Dodger who's now a sportswriter, he said. “I was a Dodger, and that’s not what I do anymore. That’s not what people pay me for.”

Investors don’t usually pay much attention to federal regulation, Levin said. “Wall Street cares basically about three things: revenues, margins -- by which I mean cost structure -- and opportunities,” he said. “Policy sometimes changes those.” Carr has “made a big deal” about the commission’s “Delete” proceeding, and there could be “benefits to the companies, but they’re not big.” CFOs will probably never mention the changes that result on financial calls, Levin said.

In addition, broadcast stocks “are incredibly small,” and major telecom companies were huge players in 2001 but are “now much smaller." The stock market is up under Trump in part because of record stock buybacks, and investors rarely sell if they expect a rate cut from the Federal Reserve, Levin noted. “You basically have the magnificent seven” companies and the rest of the S&P 500. “The magnificent seven are doing great. The S&P 493 are not doing so well.”

As for USF reform, every FCC chair kicks it to the next FCC, Levin argued. Carr has said little since he took the gavel, even though USF is “the biggest thing the FCC does,” Levin said. “It’s wildly out of date on both the contribution and distribution side, and there is no debate internally that will help inform Congress” as lawmakers tackle USF issues.