Capstone expects the Republican-led Federal Communications Commission (FCC) to continue rolling back regulations and take a more welcoming approach to mergers in 2026. The agency is also likely to use its broad authority over what qualifies as “in the public interest” to push companies for certain concessions during reviews. Overall, we anticipate a surge in consolidation across both broadcast media and the broadband industry through 2027.
Outlook at a Glance
- FCC Will Leverage Public Interest Standard as a Tool to Force Companies to Adopt Policies Trump Administration Supports
- Spectrum Policy Will be a Key Area of Focus in 2026 as the FCC Moves Forward on Preparing for a Series of License Auctions Starting in 2027
- Accelerating Growth of Domestic LEO Satellites to Remain FCC Priority of FCC, with Faster Licensing, Pro-Business Attitude, and Reduced Interference Protections for GEOs
Federal Communications Commission to be Friendlier to Mergers, License Transfers, Waivers, Other Approvals, and Move Ahead on Scrapping Most Media Ownership Rules
| Winners | EchoStar Corp. (SATS), T-Mobile US Inc. (TMUS), Verizon Communications Inc. (VZ), AT&T Inc. (T), Nexstar Media Group Inc. (NXST), Tegna Inc. (TGNA), Charter Communications Inc. (CHTR), SpaceX, Cox Communications, and deals expected to be announced in 2026 |
| Losers | None |
The Trump-era FCC will continue to be more accommodating to mergers and license transfers than it was under the Biden administration and we expect all the transactions currently under consideration to be approved. The FCC will continue to evaluate each transaction on its individual merits and subject them all to a thorough review process, but will not reflexively block transactions that lead to greater industry consolidation. Major transactions involving the sale of wireless licenses by EchoStar to the other major wireless carriers, the merger of Charter Communications and Cox Communications, and the merger of Nexstar and Tegna should all be approved in 2026.
Capstones notes, however, that mergers in the broadcast television market could face a slightly longer approval process in the year ahead since current FCC rules limit the number of stations and audience households one broadcast television station group can own in a given market. FCC Chair Brendan Carr views media ownership rules as outdated, with broadcast television in direct competition with streaming services, virtual multichannel video programming distributors (vMVPD), cable companies, and other business models. These non-traditional business models now represent more than half of all TV viewership and pose an existential threat both to over-the-air broadcasters and cable companies, which helps to explain why Carr supports easing or eliminating the FCC’s television broadcast media ownership rules. Eliminating, easing, or waiving media ownership rules is critical in approving transactions between television broadcast station groups as it will be nearly impossible for larger transactions like the Nexstar/Tegna acquisition to close under the current rules.
We also believe a Carr-led FCC in 2026 will more strictly define what is in the public interest when evaluating transactions and not reflexively block deals that could lead to hypothetical harms or greater industry concentration, which was the case under the Rosenworcel-led FCC during the Biden administration. A more pragmatic FCC under Carr should easily approve the sale of EchoStar’s spectrum licenses in 2026 to the three major wireless carriers and other similar transactions.
There appears to be a general recognition by Carr that some level of consolidation in both the wireline and wireless broadband industry will be beneficial, particularly if it does not lead to excessive consolidation at the local level and leads to better service or to scarce resources like wireless spectrum being more efficiently used to serve the needs of subscribers. One could even argue that the FCC’s dissatisfaction with how inefficiently EchoStar was using its wireless spectrum is a major reason why these licenses were sold to the other wireless carriers, which are likely going to use the spectrum more intensely than EchoStar could.
The FCC’s scrutiny of EchoStar and whether the company was meeting its network buildout requirements and actually using the spectrum it held licenses to operate on generally are cited as a major reason why the company divested these licenses.
FCC Will Leverage Public Interest Standard as a Tool to Force Companies to Adopt Policies Trump Administration Supports
| Winners | Broadcast television station groups like Nexstar and Sinclair, broadband providers like Verizon, and other companies seeking to get mergers approved that have proven willing to engage with the Trump administration. |
| Losers | Companies unwilling to engage with the Trump administration |
The FCC must approve all transactions and license renewals involving telecommunications companies and broadcasters, as they hold FCC licenses and fall under the commission’s regulatory jurisdiction. An FCC license can be transferred only in a merger or an asset sale if it is deemed to be in the public interest. The FCC also approves or eliminates regulations based only on this public interest standard. However, the public interest standard is ambiguous and can mean different things to different people.
Democrats used the public interest standard to help block transactions that did not seem to be traditionally anti-competitive. For example, the Biden-era FCC refused to approve Standard General’s acquisition of television station operator Tegna, contending that the transaction could lead to higher cable subscription prices for consumers and a loss of jobs in newsrooms. The FCC under Democrats also imposed onerous rules, including broadband nutrition labels on internet service providers (ISPs), and slashed per-minute calling rates for Incarcerated Peoples’ Communications Services (IPCS), maintaining that these regulatory changes were in the public interest.
A Carr-led FCC in 2025 saw the FCC using its broad discretionary authority in interpreting the public interest standard. An example of this was when Chair Carr signaled that he would use the FCC’s authority over mergers in the telecommunications and broadcast media space to block transactions that had adopted diversity, equity, and inclusion (DEI) polices. This led Verizon and T-Mobile, which had transaction reviews before the commission, to eliminate their DEI programs.
Capstone believes DEI, which the White House perceives as anti-Trump bias in the media, and the contentious relationship between local broadcasters and major networks will all be areas of focus in 2026, when the FCC under Carr will likely seek to extract concessions from companies seeking approval for deals or rulemaking. Broadcast television stations and both wireline and wireless broadband service providers are probably most at risk as the FCC is most active in these sectors with respect to merger approvals, license transfer requests, and deregulation.
Spectrum Policy Will be a Key Area of Focus in 2026 as FCC Prepares for a Series of License Auctions Starting in 2027
| Winners | AT&T, Verizon, T-Mobile, SES SA, Intelsat |
| Losers | Comcast Corp. (CMCSA), NextNav Inc. (NN), Charter |
We believe identifying and clearing spectrum for auction for flexible use is top of mind for the Carr-led FCC following the passage of the One Big, Beautiful Bill Act (OBBBA) in July. The legislation requires the commission to auction 800 MHz of flexible-use spectrum by 2034, most of which we anticipate will be won by large wireless carriers for 5G network deployments.
The first milestone will be an auction of upper C-band (3.98-4.2 GHz) spectrum, which must be completed by July 2027. The FCC recently issued a proposed rule to begin reshaping the band—which is currently occupied by satellite operators for content distribution—to flexible use by using funds raised from the imminent auction to pay existing operators to relocate. This will have read-throughs for incumbent Intelsat, which has contingent value rights (CVRs) to the proceeds from repurposing the band. It remains to be seen how much the FCC will pay operators to incentivize accelerated clearing of the band, a detail crucial for bondholders. Most of the total 800 MHz of spectrum required to be auctioned still must be identified.
Spectrum will continue to be a key priority for this FCC, and we believe these auctions will take up a significant amount of the commission’s bandwidth in 2026. Additionally, satellite spectrum reform and license transfers resulting from the sale of EchoStar’s spectrum assets are high priorities. We believe that less time-bound issues, such as NextNav’s petition for a lucrative spectrum swap in the lower 900 MHz band (902-928 MHz), will land on the back burner, increasing the likelihood that operators that already own the spectrum needed to back up the Global Positioning System (GPS) will be awarded licenses.
Accelerating Growth of Domestic LEO Satellites to Remain FCC Priority, with Faster Licensing, Pro-Business Attitude, and Reduced Interference Protections for GEOs
| Winners | SpaceX, AST SpaceMobile Inc. (ASTS), Amazon.com Inc. (AMZN), other low earth orbit (LEO) operators |
| Losers | EchoStar, Viasat Inc. (VSAT), DirecTV, other geosynchronous (GEO) operators |
We believe the FCC will continue to be proactive in efficient licensing and revamping interference protections in 2026 to ensure that relatively new competitors—massive LEO satellite constellations—can scale quickly to increase US soft power abroad. The commission views the LEO satellite race against China as the “second space race” and aspires to finalize its current proposed reforms.
To boost domestic LEO satellite broadband providers SpaceX and Amazon Leo (formerly Project Kuiper), the FCC has introduced reforms to 1) create an “assembly line” process for licensing satellite and earth station licensing; 2) free up 20,000 MHz of spectrum ranging from 12.7 GHz to 114.25 GHz for satellite broadband use; and 3) reshape how spectrum sharing between LEO and GEO operators functions by changing how harmful interference is measured. For massive LEO operators that are constantly launching; require new licenses for larger constellations; and operate using free, shared spectrum in the Ka-/Ku-bands, these reforms will increase both total constellation and per-satellite throughput. While these reforms are positive for LEOs and the broader race against China, decreased interference protection for GEOs to increase LEO bandwidth is indicative of the competitive shift toward lower orbits seen in recent years.
On the direct-to-device (D2D) side, the FCC has been highly permissive and flexible with its goals for intensive spectrum use and reducing launch delays. This would include granting AST SpaceMobile broad authority to launch into orbit 20 of the largest satellites (~2,400 square feet each) instead of evaluating the performance of the first satellite and then deciding on further launches. We anticipate this permissive attitude to apply to spectrum issues as well, with SpaceX likely to receive a waiver under the Supplemental Coverage from Space (SCS) framework to use terrestrial midband spectrum purchased from EchoStar for D2D. It remains to be seen how the FCC will handle D2D spectrum harmonization in other countries and whether it will wield the US’s soft power to do so, similar to how Starlink broadband access reportedly became a part of the Trump administration’s tariff negotiations with Lesotho and other countries. A prime indicator of this will be the European Union’s upcoming 2 GHz reallocation decision. With SpaceX now technically an incumbent after purchasing EchoStar’s S-band licenses, the European Commission now must decide whether to preference quality of service for its citizens or sovereignty and support of its IRIS2 initiative. The license winners will gain access to the EU market and significantly increase revenue as LEO satellites will be orbiting the continent regardless—a huge boon to profit margins.
