Trump's Plans to Shake Up the Tech World - Scientific American

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Donald Trump’s ascension to the White House had very little to do with his views on the spread of high-speed broadband, wireless spectrum allocation—or any number of other eye-glazing but important issues impacting technology in the country he will soon lead. Granted, there was no public thirst for a heated, televised debate over how to keep next-generation 5G wireless devices from overwhelming older networks. Yet these and other tech-related topics are closely connected with much of the rhetoric that ultimately won Trump the presidency.

Some expect Trump’s opposition to immigration will have a ripple effect through the tech industry. He plans to scale back the H-1B visa program—which is critical to many high-tech companies finding the talent needed to develop products and services that today exist only in some entrepreneur’s imagination. As a candidate Trump also attacked many taxation and trade policies that have encouraged tech companies to outsource production overseas. Although short on details, he promised several times over the past year and a half to bring manufacturing jobs back to the U.S.

Scientific American spoke with Robert Atkinson, president of the non-partisan think tank Information Technology & Innovation Foundation (ITIF), to better understand where Trump stands on technology and innovation policy.

[An edited transcript of the interview follows.]

What are the most pressing tech-related issues for the Trump administration?

After he appoints a new Federal Communications Commission [FCC] chairman, the first thing on the docket will be to repeal FCC Chairman Tom Wheeler’s Open Internet Order, also known as Net neutrality. The second will be to repeal Wheeler’s Internet Service Provider privacy rules, which limit how ISPs can use and sell customer data. I don’t think the new administration will feel a sense of urgency beyond that, because tech is not going to be a top priority.

How will the Trump administration’s other priorities influence (or be influenced by) technology?

Three of Trump’s top priorities for 2017 are related to tech. Trump has said his administration will build new infrastructure that’s going to be the best in the world. You cannot have the world’s best infrastructure unless it is infused with technology, whether that’s cutting-edge construction materials or sensors that connect to the Internet of Things. The second thing: he cannot be a successful president—as he has defined success—if he’s not a lot tougher on trade restrictions, and that will affect the tech industry potentially in a very positive way if he does it right. The tech industry is subject to an array of unfair and harmful trade practices. Trump says he’s going to do something about that.

The third area is taxes—more specifically, whether the Trump administration jettisons research and development tax credits in favor of a lower tax rate as they reform the corporate tax structure. If you get rid of the R&D tax credit, you can lower the rate one percentage point. Or do they expand the R&D tax credit and put in place what’s called an innovation box—a special, lower tax rate for income derived from intellectual property that Sen. Chuck Schumer (D–N.Y.) has supported?

Who’s on the short list to potentially replace Wheeler as FCC Chairman?

Jeff Eisenach is the name that’s been most talked about. He has been leading the Trump campaign in telecom and tech issues, and may be leading Trump’s transition team in that area. Jeff, who is on ITIF’s board, has a longtime conservative pedigree. He ran a think tank that was affiliated with Newt Gingrich back in the '90s and he worked in the first Bush administration. More recently he’s been at the American Enterprise Institute, which is a center-right conservative group. I think there’s a chance that Jeff could head up the FCC. He would be a strong appointment; he knows the issues very well.

How might Eisenach’s appointment impact FCC policy?

If it is Jeff, then broadband access will no longer be classified as a Title II service that’s subject to a wider range of rules and is much easier to regulate. Instead, it will once again be considered a Title I service, making it harder for the government to get legal approval to do price or privacy regulations. With Jeff, you’d also see a push for ending what we might call government overbuilding, such as federal grants for local communities that have access to commercial broadband but decide it’s not fast enough and want to build another network on top of or alongside it. And you’d see a big push for freeing up space on the radio spectrum to pave the way for a transition to 5G next-generation networks.

Does the U.S. president have the power to change telecommunications policy?

The president cannot make changes to telecommunication policy because the FCC is an independent agency. The FCC itself has to go through a rigorous notice and rule-making process, and take a vote on policy before making any changes. That’s why it was so controversial when Obama publicly said that he thought that Wheeler should change broadband access’s designation to Title II. That was really unprecedented. The way the president influences telecommunication policy is through the appointment of the chairman to lead the agency.

Could the Trump administration reverse the decision to give the Internet Corporation for Assigned Names and Numbers (ICANN) autonomy from the U.S. Department of Commerce?

I don’t know if the president has the power to change this, but even if they had the power, I don’t think they’d do it. The horse has left the barn. There would be too much outrage on the Hill and internationally. This isn’t a fight they’re going to take on. ICANN had an agreement with the U.S. government where the government had some control in the background over ICANN’s role of managing the internet’s domain name system (DNS). [DNS stores the information needed to match a Web site address with its corresponding internet protocol (IP) address, which Web browsers need in order to find and connect to the server hosting that site’s content.]

That tether has been cut, but I think the Trump will monitor them to make sure ICANN lives up to what they said they would do and not allow other countries to take a larger role in internet governance.

How might Trump’s relationship with high-tech companies compare with the way Obama has dealt with Silicon Valley?

The funny thing about Obama is that he likes technology, and is pro-tech and has a bromance with the Valley; but his policies weren’t always pro-tech. His stances on the Stop Online Piracy Act (SOPA) and Title II for broadband were pro-Silicon Valley, but others took the more traditional liberal side. To Trump, tech is just another industry and those companies will have to come to Washington to make their case and try to get access to influence just like everyone else. They will not have the privileged position they had with Obama’s administration.

The states that Trump won during the election are for the most part not new economy states with lots of high-tech jobs. That’s a big deal and exactly the opposite of Obama, whose core states have a lot of tech companies, research universities and tech workers. Tech companies will have to show that they’re doing a better job in creating new jobs in places where you wouldn’t normally expect them. Saint Louis, for example, is becoming a hub for software development, so maybe Google needs to put some of its offices in Saint Louis.

Does the president have the power to bring outsourced high-tech manufacturing jobs back to the U.S.?

There are certain jobs that are really, really hard to bring back—nor should we bring them back to the U.S. Could the government convince Apple to make iPhones here? Maybe not. But you could bring back jobs making semiconductors or machine tools or even PCs, if you give companies incentives that allow them to build state-of-the-art facilities here.

The better question, though, is how can the Trump administration reduce the trade deficit, with a lot of that made up by stronger tech exports? If we had a lower corporate tax rate, and he pushes back against all of these foreign trade innovation mercantilist policies—such as the Trans-Pacific Partnership (TPP) agreement—then absolutely you could grow tech exports. The sort of goal of saying we want to make two million more jobs is not unreasonable. Trump has to work with Congress on the tax issue, though, for that to happen—because on his own he can’t get money for, for example, the U.S. Trade Representative, which acts as the country’s chief trade negotiator.

What impact might Trump’s administration have on tech companies’ need for skilled workers from other countries?

The tech industry has wanted an expansion of programs that enable the immigration of high-skilled workers, particularly immigrants well educated in STEM, but that won’t happen in the Trump administration. There’s also a chance that Trump will restrict the H-1B visas that many companies in the tech industry rely on to attract talent. Those types of policies are going to be a problem for tech companies.

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