What does a Trump presidency mean for tech?

Some say it might not be as bad you think. Others say Donald Trump's potential influence on the industry is "alarming."

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
7 min read
Neilson Barnard, WireImage

The eight-year bromance between Barack Obama -- who appointed the first chief technology officer for the US -- and Silicon Valley is over. Now what?

That's the question the tech industry has been asking since a real estate mogul turned reality TV star, with a spotty reputation on technology, 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 innovation, improve education and encourage exploration and discovery.

On the eve of Inauguration Day, it's still unclear where Trump stands on most tech-related issues. He said very little during the campaign about the tech industry, though he did call for a boycott of Apple products over the company's stance on privacy in its fight with the FBI.

Initially, it looked as though Silicon Valley was less than thrilled 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 the prospect of 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.

But the chilly relationship has thawed since the election. In December, Trump met with more than a dozen executives from the biggest tech companies in the US -- a roundtable fraught with potential for awkwardness given Trump's repeated attacks on tech and the philosophical disagreements he has with some of the executives. But instead, the president-elect pledged to do "anything we can do" to help continue the industry's success. Several prominent execs, such as Tesla CEO Elon Musk and Uber CEO Travis Kalanick, have even joined on as advisers.

See also: Now begins the @realDonaldTrump era

Telecommunications companies, in particular, could see big benefits during Trump's presidency. Trump's transition team is full of critics of the Federal Communications Commission's net neutrality rules, which imposed old-style telephone regulation on the internet. There are indications a Trump administration may be much friendlier to big mergers and acquisitions than Obama's team.

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 in a 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

Net neutrality was a relatively big deal in the 2008 election, but little was said during this election cycle about last year's policy changes.

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."

Now that Chairman Tom Wheeler, an Obama appointee, has stepped down -- and since Commissioner Jessica Rosenworcel, another Democrat, wasn't reconfirmed by the Senate at the end of last year -- the FCC will have a 2-1 Republican majority while it waits for Trump to nominate a new chairman. It's likely that an FCC led by Republicans will 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 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," the group said in a statement in November.

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 in October, Trump vowed to block the merger if he was elected.

Enlarge Image

Trump did call out "the cyber" when talking about cybersecurity concerns during one presidential debate.

Mark Ralston/AFP/Getty Images

"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."

AT&T CEO Randall Stephenson, who met with Trump last week, said he didn't discuss the merger with the president-elect. But he told lawmakers during a Senate hearing last month that he's confident based on the facts of the case that the government will approve the deal.

Encryption and cybersecurity

The president-elect has made only vague statements about privacy and security, long downplayed reports on Russian hacking into the Democratic National Committee and Clinton's campaign email servers, and remains skeptical about US intelligence agencies' findings on Russia's cybermeddling. 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 cybersecurity is that there should be an examination of US cyberdefenses 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."

Earlier this month, Trump promised a "major report on hacking defense" within 90 days and appointed former New York City mayor Rudy Giuliani to shepherd his cybersecurity efforts with US businesses.

Science and STEM education

Experts who've looked at Trump's economic agenda suggest that deficits will explode, which could lead Congress to trim budgets. That could mean heavy cuts to funding for science programs and education, which runs counter to the tech industry's call for more tech-savvy workers in today's digital age.

What's more, Trump has publicly supported views that are not backed by the scientific community. He's repeated unfounded connections between vaccinations and autism. His meeting earlier this month with Robert F. Kennedy Jr., an environmental lawyer who has long been known as supporting the antivaccination cause, has also raised eyebrows as it's said that Kennedy may head up a task force to look into the safety of vaccinations. Trump has also dismissed reports of climate change as a myth perpetuated by the Chinese to undermine the economy. He's tried to appeal to voters in coal country by supporting energy policies that encourage the use of more fossil fuels and downplayed investment in renewable energy, like solar.

H-1B visas and immigration

Immigration has been one of the hallmark issues of Trump's campaign, but most of his policies center on what he'd do to reduce illegal immigration. When it comes to legal immigration of skilled workers, Trump said he wants to increase pay for people holding H-1Bs as part of a plan to steer more work to Americans. That's because some consider H-1B visa holders a cheaper source of highly skilled labor for US companies.

"Raising the prevailing wage paid to H-1Bs will force companies to give ... coveted entry-level jobs to the existing domestic pool of unemployed native and immigrant workers in the US, instead of flying in cheaper workers from overseas," his policy says.

Tax policy

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 ofthe 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.

First published Nov. 10, 2016.
Updated Jan. 19 at 5:00 a.m. PT:
Added information about Trump's meeting with technology executives and other developments since the election.