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Cable Technology Feature Article

November 10, 2008

Expert: Smaller Telecom Companies, Green Technology to Benefit under Obama

By Michael Dinan, TMCnet Editor

With a weak economy and two wars on his plate, it’s unlikely that President-elect Barack Obama is spending much time agonizing over the telecommunications space as his inauguration approaches.
Yet rumors already are swirling about whom the Illinois Democrat will name as the nation’s first chief technology officer and new Federal Communications Commission chairman.

As TMC President Rich Tehrani (News - Alert) says in a video interview here, the “new” federal government may already be viewing technology in an entirely new way. Obama used technology in ways that politicians never have, Tehrani said, to mobilize his campaign through innovative integration of communications and marketing.
Now, telecommunications companies – especially larger ones that enjoyed wide deregulation under President George W. Bush – are trying to figure out how they’ll fare during Obama’s presidency.
According to one expert, smaller telecommunications companies are more likely to prosper than large operators, though businesses of all sizes could see new opportunities arise from the nation’s push toward environmental sustainability.
Jan Dawson, vice president at international consulting firm Ovum (News - Alert), said today that efforts to substitute innovations such as telecommuting, telepresence and telemedicine for less carbon-friendly options – combined with Obama’s promise to invest in clean energy and other technology to reduce emissions – may benefit all kinds of telecom companies.
Dawson says the telecom space is likely to see the end of the Bush administration’s hands-off, deregulatory approach. That approach has led to large mergers in the industry, Dawson said, but also resulted in duopolies and oligopolies in the cable and large enterprise markets, so that only SMBs have seen real competition.
That’s probably going to change, Dawson said, as the new FCC (News - Alert) likely will take a “much more skeptical of further concentration of market power in the hands of a small number of players, and much less likely to lift regulation.”
“Indeed, it is also much more likely than the outgoing administration to finally tackle the issue of net neutrality decisively, something the (FCC Chairman Kevin) Martin administration dodged for a long time and then handled only half-heartedly earlier this year,” Dawson said.
As a result, smaller players are more likely to be heard.
Also, with a focus on environmental issues, Obama’s administration likely will put out more strict emissions standards – a move that could hurt the larger telecom companies, with their large fleets of specialized trucks.
“Tax rates on corporations may have to be raised to pay for some of the income tax cuts and increases in spending proposed by the Obama campaign,” Dawson writes.
Yet, much of this will be offset by Obama’s push for sustainability – a push that’s expected to invest and support technologies such as telepresence, that reduce carbon footprints.
“Larger telcos are likely to feel the impact of the change in administrations more than their smaller brethren, but all telcos are likely to have to make some adjustments and concessions under the new regime,” Dawson writes.

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Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael’s articles, please visit his columnist page.

Edited by Michael Dinan