Lawyer: Republican-Controlled FCC to Shift Telecom Landscape

WASHINGTON, Nov. 13, 2024 – As the dust settles from the 2024 U.S. election, a Morgan Lewis analyst predicts significant changes ahead for telecom policy, particularly with a Republican-controlled Congress now at the helm.

The Trump administration’s focus will be “doubling down on taxes, tariffs, immigration, national security, deregulation and cost effectiveness,” said Andrew Lipman, a partner at Morgan Lewis specializing in telecommunications and media, during a webinar Wednesday.

Lipman emphasized that key areas overseen by the Federal Communications Commission likely to be affected include consumer protections, spectrum policy, and mergers and acquisitions.

Part of its anticipated deregulatory approach, analysts predicted the Trump administration will roll back several consumer-protection policies that were enacted to ensure fair internet access and pricing by the Biden administration’s FCC.

These include network neutrality, digital discrimination bans, and broadband labeling rules, which require ISPs to display transparent pricing and service details at the point of sale for internet services. Lipman said the FCC’s all-in pricing rules, which mandate more transparency on bills from cable and satellite TV operators, would also likely be reversed under a Republican-led FCC. Additionally, the FCC’s bulk billing proposal, which drew criticism from stakeholders across the industry but was never enacted, would likely be dropped. 

Lipman expects the Trump administration to favor lower corporate taxes, which would allow certain ISPs, particularly facilities-based providers, incumbents, and carriers actively investing in infrastructure, to retain more of their profits. Additionally, Lipman said new tax provisions, like bonus depreciation and accelerated depreciation, will make it easier for companies to write off the cost of investments more quickly, encouraging further spending in broadband infrastructure. 

Mergers and acquisitions in the telecom sector, including the pending Verizon-Frontier, T-Mobile-US Cellular, and Dish-Direct TV transactions, were likely to experience a smoother approval process, Lipman said.

“M&A is going to change dramatically under the Trump administration. It's not going to be like the Reagan era. Trump is more of a populist. It remains to be seen who will be heading up the antitrust division at the [Federal Trade Commission], but we do expect a somewhat easier road for M&A, quicker and with less conditions imposed, at least by the FCC,” Lipman said. 

Regarding the FCC's media ownership rules, Lipman thinks “we'll see almost a diametrically opposite position [than the current FCC], with much more flexibility on TV and radio” ownership caps, and expects Republicans to loosen restrictions on media consolidation.

As for artificial intelligence, Lipman predicted that the Trump administration will shift away from federal regulation and instead encourage industry standards and voluntary practices, marking a contrast to the current FCC’s focus on tighter AI regulation related to its use on television, radio, and robocalls.

Finally, scrutiny of foreign entities in the telecommunications sector, particularly from China and Russia, was predicted to remain a high priority. This will likely involve expanded foreign ownership scrutiny and export controls on sensitive technologies, Lipman said, reflecting ongoing concerns over national security and foreign influence.