June 30, 2025

By Matt Wiederrecht, Head of Capstone’s Special Situations Team

We believe the Federal Communications Commission (FCC) will kick off a two-year trend of deregulatory actions at its June open meeting. Broadcasters, such as Sinclair Broadcast Group (SBGI), will be the biggest winners, as the regulatory environment will likely lead to an increasing number of broadcast mergers. Telecommunications companies across the industry, ranging in size from AT&T Inc. (T) to local radio stations, will experience tailwinds too.

• The FCC initiated an inquiry in March entitled “Delete, Delete, Delete,” soliciting comments on regulations seen as obsolete that the Republican-led commission should eliminate. The proceeding has garnered almost 1,200 comments in addition to others filed in various other dockets where stakeholders have asked regulators for relief. The commission met its quorum requirement on June 23^rd, allowing it to start taking action. Chair Carr will start the process of repealing regulations in earnest at the June 26^th open meeting where three rules are on the docket for elimination.
• Capstone believes future FCC open meetings for at least the next two years will continue to include agenda items that either eliminate or ease existing regulations. Media ownership rules, paper-based reporting requirements, outdated technical standards, and other rules that the commission sees as redundant or overly burdensome are all targets for being eased or eliminated.
• The FCC’s deregulatory agenda benefits the entire telecommunications industry. Broadcasters would notably benefit, as we expect the FCC to soften limits on broadcast media ownership rules, making it easier for companies to consolidate their stations.

Trump’s Deregulatory Agenda Aligns with Chair Carr’s

President Donald Trump signed dozens of executive orders in the weeks after he was sworn into office. One of the first was a freeze on all ongoing rulemakings by federal agencies, followed by a subsequent order that asked agencies to repeal 10 regulations for every new one issued. This ten-for-one order is substantially more aggressive than the two-for-one order Trump issued in his first administration. We believe this order is somewhat unrealistic, but it signals the administration’s whole-of-government approach to eliminating regulations.

The administration’s deregulatory push aligns closely with FCC Chair Brendan Carr’s desire to eliminate large number of regulations at the FCC that he believes are overly burdensome and wasteful. Chair Carr initiated this push by eliminating over 2,000 open proceedings launched by prior FCC chairs that were soliciting comments either in connection with notices of inquiry or notices of proposed rulemaking. He followed up by opening a docket requesting comments seeking “to identify outdated and overly burdensome regulations that should be repealed,” though we expect Carr to expand his search for regulations to repeal or ease beyond those identified in docket, as he has always been a proponent of loosening and modernizing FCC regulations.

Trump and Carr both firmly believe in using the federal government’s regulatory authority as leverage to help implement Trump’s political agenda. This can be seen through Carr’s investigations into how the press has covered President Trump and Carr’s threats to block mergers if companies do not eliminate their diversity, equity, and inclusion policies. So, while Trump and Carr broadly support deregulation, both also embrace the use of regulatory authority as a means of imposing their political will over the business community.

The June Open Meeting

On June 4^th, Chair Carr shared the tentative agenda  for the June open meeting the same day the Commissioners Nathan Simington (R) and Geoffrey Starks (D) announced their departure from the FCC at the end of that week, which meant the FCC would not have enough commissioners to meet the quorum and do business. However, on June 18^th, the Senate confirmed Olivia Trusty (R) as commissioner giving the commission a quorum with a 2-1 Republican majority in time for the June meeting.

The three docket items on the June agenda consider eliminating regulations in three different segments of the telecommunications industry.

1. The first item on the agenda would remove certain regulations governing cable television systems, including eliminating forms and regulations surrounding equipment not used to provide the most basic tier of cable service (BST). BST rates have been deemed to be competitive because of streaming and the availability of satellite television, so rate regulations for basic cable service are viewed as no longer necessary.
2. The second item on the agenda would eliminate a requirement that broadband data collection filings be certified by an individual holding a professional engineering certification. Once adopted, these filings could be made by any qualified engineer with a minimum level of relevant work and educational experience.
3. The third item on the agenda would delete a provision requiring that Telecommunications Relay Services (TRS) providers support the American Standard Code for Information Interchange (ASCII) transmission format. TRS devices allow people who have impaired hearing to place and receive phone calls through companies that provide phone service to the hearing-impaired. ASCII is considered an obsolete technical standard, so the FCC is essentially eliminating a requirement that TRS providers cease supporting a technical standard that equipment manufacturers phased out years ago.

Additional Areas of Focus for Deregulation

Capstone believes the FCC under Chair Carr will pursue an agenda of deregulation across all of the various sectors of the economy the FCC regulates, including wireline and wireless telecommunications services, radio and television broadcasters, satellite operators serving the US market, and cable companies. The FCC’s focus will be on eliminating outdated regulations, easing regulations it views as excessively burdensome, and eliminating regulations where the costs associated with a particular regulation far outweigh the potential benefits.

We expect the FCC to focus its efforts on issues including:

• Broadcast media ownership rules, particularly with respect to limits surrounding how many television stations in each market a company can own, and the percentage of households any one group of stations can cover. Easing these rules would make it easier for companies to consolidate their stations, and the FCC is already seeking comment on a 2017 notice of proposed rulemaking on easing media ownership rules.
• The FCC has some vague rules surrounding cybersecurity obligations imposed upon broadband providers, which the wireless industry would like to see eliminated. Vague rules that impose hard to quantify costs for no real benefit are likely a high priority for Carr.
• The FCC has imposed significant paperwork filing requirements on all the various companies it regulates, and many view the rules surrounding these filing requirements as burdensome and redundant. A major focus of the FCC will be on streamlining requirements or eliminating them if they are found to serve no useful purpose. For example, we expect the FCC to eliminate a rule that compels the owners of broadcast licenses to submit biennial ownership reports even when no change in ownership has occurred since the last report was filed.

It is unclear exactly which rules the FCC will eliminate or ease because there are 3,000 rules that have been approved over the last century. However, the request for comments in the “Delete, Delete, Delete” proceeding asked specifically for feedback from stakeholders on the costs and benefits of existing rules to help in identifying those rules not seen as cost effective. The proceeding also asked for feedback on rules that are no longer necessary because of changes in the marketplace and technology, and if the regulations serve as a barrier to entry for new entrants. Finally, the notice seeks for input on regulations that may need to be repealed, either due to recent legislation or because the agency exceeded its authority—putting the rules at risk of being overturned following the Loper Bright decision, which ended judicial deference to agency interpretations and allows courts to exercise their own judgement when interpreting the meaning of legislation.

Risks to Our Thesis

• We believe the primary risk in the short term is the potential resignation or termination of Democratic FCC Commissioner Anna Gomez. If she leaves the commission, the FCC would lack the quorum it needs to move on rulemakings until the Senate confirms a third commissioner.
• Over the longer term, the primary risk is a lack of consensus among a majority of commissioners on which specific regulations to either eliminate or water down. We believe this is only a risk to specific rule changes as Republicans in general have a bias toward deregulation.

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