- Enhanced Scrutiny of Foreign Ownership in
Telecommunications Assets. The Federal Communications
Commission (FCC) will continue to increase its attention on its
oversight of foreign-owned telecommunications assets and
infrastructure. This scrutiny extends beyond direct ownership into
secondary market arrangements, including Indefeasible Rights of
Use, which are particularly common for submarine cable systems. By
way of example, in November 2024, the FCC launched its first comprehensive review of
licensing rules for submarine cables in decades. The review
aims to modernize regulations for this critical infrastructure,
introducing new periodic reporting requirements and potentially
shortening the current 25-year license terms to encourage more
frequent renewal applications. We expect this trend of the FCC
enhancing its national security assessment portfolio to continue
under the next administration.
- Increased Support for Direct-to-Device Satellite
Technology. The telecommunications landscape is being
transformed by the rapid advancement of direct-to-device satellite
technology. This technology represents a significant shift from
traditional satellite phone services, offering potential for
enhanced voice and video capabilities directly from space to
consumer devices without requiring specialized hardware, and
it's becoming more feasible to incorporate into consumer level
tech. The FCC, particularly under new leadership, is expected to
work toward streamlining approval processes for satellite
applications and support broader implementation of these services.
The commission's support for U.S. leadership in space and
greater efficiency in processing applications could also impact
satellite services more broadly, including commercial lunar
missions and low Earth orbit mega-constellations providing
broadband services.
- Broadcast Industry Consolidation. In 2025 we
are likely to see a push to change broadcast ownership regulations
either through legislation or regulatory action, potentially
leading to increased industry consolidation. The national
television broadcast ownership cap currently limits station
ownership to coverage of 39% of the country, and there are signs we
may see that cap lifted or modified. Brendan Carr, President-elect
Donald Trump's announced appointee for chair of the FCC,
mentioned the desire to loosen the agency's ownership rules in
a chapter he wrote on the FCC for Project 2025. The ultra-high
frequency discount policy for full-power broadcast television
stations, which is generally considered unnecessary today, is also
expected to be revised or eliminated as part of this regulatory
evolution. Radio broadcast ownership regulations had survived
revisions during the Biden administration but efforts to loosen
those regulations are likely under new FCC leadership during the
second Trump administration. A significant enough regulatory shift
would trigger a wave of mergers and acquisitions in both broadcast
radio and television sectors.
- Global Security Standards Alignment. U.S.
telecommunications security policies are increasingly influencing
global regulatory frameworks, particularly in Europe. This trend
encompasses both operational security requirements and ownership
restrictions. The focus extends beyond traditional infrastructure
security to include cybersecurity requirements for carriers. The
U.S. federal government has designated communications as a critical
infrastructure sector, and we've seen other bodies only
recently begin to follow suit. The European Union's Critical
Entities Resilience Directive came into effect in October 2024,
requiring EU countries to carry out risk assessments on essential
services and to identify critical entities by July 2026. Digital
Infrastructure and Space are among the 11 sectors covered by the
directive. Around the same time, the United Nations released its
Technical Guide on Protecting Critical Energy Infrastructure, which
in part reads, "The interdependencies between CEI and other
critical sectors, such as transportation, communication, and water
supply, exacerbate the impact of attacks, potentially leading to
cascading failures across multiple infrastructures." As
investment in digital infrastructure and telecommunications
continues to grow on a global scale, regulatory scrutiny will grow
with it.
- Future of Section 230. When Trump identified Carr as the next FCC chair, Carr posted on social media that he would "dismantle the censorship cartel and restore free speech rights for everyday Americans." This statement was directed at Big Tech and Section 230 of the Communications Act, which protects online platforms from civil liability. Carr has been an unequivocal supporter of efforts to reign in Section 230's protections, and it will likely be a top priority of his at the helm of the FCC to enact those changes within its authority. We also expect efforts from the Republican-controlled Senate under the leadership of Sen. John Thune (R-SD) to propose changes to that provision to hold platforms more accountable.
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