My Telecom and IT Wish List for the Trump Administration
As Trump is getting ready to take his place in the White House as the next U.S. President, a timely topic lies at the intersect of where the world of mobile / wireless / IT and politics collide. I’d like to address the many ways in which Trump can initiate, foster, and accelerate IT growth in the U.S.
Here are the items I would like to propose to Trump to help build innovation and growth in the information technology sector:
1. Alter net neutrality rules for mobile content delivery Allow wireless operators to provide separate wired and wireless tollways in which content suppliers pay a premium price for guaranteed delivery of their content. This will help companies like Netflix, Amazon and Hulu offer better quality delivery of their video content through broadband providers like Verizon, AT&T and Comcast and provide better service to customers.
2. Alter rules for wireless auctions I’ve never understood why the spectrum auctions require money up front. It would be more beneficial to the government to have the spectrum auctions bid on the percentage willing to pay as a tax along the way. Today, the bid amount is paid up front. In the new plan, companies (through their executives) would be bidding for the percent of revenue generated that would be paid as a tax. This lowers the amount to be paid up front that could be better utilized on CAPEX improvements to the network.
3. Reduce regulation When you stop and think about regulation in any industry, the burden often falls on the demands of new information technology to support the regulation. We know that Trump may reduce regulation in areas such as the Dodd-Frank Act which requires additional financial reporting. The legislation, enacted in July 2010, was designed to prevent a significant future financial crisis by creating new financial regulatory processes that enforce transparency and accountability while implementing rules for consumer protection. The challenge for change is to reduce regulation but, at the same time, preserve the goals to prevent a financial disaster. A good example that could positively affect the startup segment of IT is to make it much easier for entrepreneurs to get a loan backed by the SBA. As it currently stands, the processes is both time and labor intensive and is all based on the credit of the entrepreneurs. It’s not money from the SBA; it’s money from banks. The changes should make the SBA resource easier for entrepreneurs.
4. Set up an Angel Venture Capital fund The VC industry has migrated by and large to focus on bigger deals, as the funds have been able to raise more money based on past successful exits. Thus, the early stage companies have had a harder time finding the first money that typically is done via Angel investors. It’s harder to raise the first institutional Series A round now than it was 10 years ago. We now have a ‘startup to VC’ gap. I recommend that Trump set up an Angel Fund. Put a reasonable amount (say $5-$10 billion) in a private fund. Hire a small number of people with VC experience to run it as a fund for startups. Funding would be miniscule compared to the potential impact, as it would accelerate the creation of good startups which would then qualify for a Series A investment. In the end, the Angel Fund should generate more financial return than what was invested.
Here’s how it might work:
- Setup an Angel Venture Capital Partnership with $5 billion to $10 billion.
- Angel qualified investors (by standard terms) then apply to this Angel Fund to get an investment up to $500,000.
- The Angel investor matches the funds put in by the Angel Fund at the same terms as the Angel. Thus, the government gets a stake in the new company and will experience the same results, with the assumption that some will fail but others will become very successful.
- A second investment up to the same $500K can be obtained if the company achieves minimum milestones.
- One half of the available funds can go into Silicon Valley, but the other half must be put into startups outside of Silicon Valley.
5. Migrate startups to full tax burden Once startups become profitable, allow them to slowly migrate into the tax system over four years: 25% of calculated taxes the first profitable year, 50% the next and finally, 75% in the third year followed by standard corporate taxation after that.
6. Create a private company liaison to the government market Set up a small team of folks who can visit startups that are trying to break into the government market. If qualified, those companies can be put on a fast track partnership with larger firms and facilitate government agencies to buy products and services from these smaller firms.
7. Require foreign students to stay Simply have foreign students who study in the U.S. stay in the U.S. for the same number of years that they are studying. After they meet the requirement, they should be offered a Green Card so they can stay indefinitely, if they so choose.
8. Embrace foreign high-tech immigrants One way to truly make America great is to seek out and secure the best and brightest qualified people to immigrate to the U.S. (as long as a company sponsor agrees to hire them). Let them work to help create the best information technology nation in the world. After three years, they are given a Green Card so that they may stay longer if they desire.
9. Support advanced technology President Trump needs to back support for the National Science Foundation, DARPA, NASA and other groups that have the capabilities to advance science with the potential to deliver impactful innovations. Such arenas for innovation would be Artificial Intelligence (AI), Internet of Things (IoT), Cloud and security.
In the near future, I look forward to seeing Trump address some of the initiatives, changes, and hopefully, advancements in the IT area. I’m in great hopes they will become feathers in the cap of his administration.