With Brendan Carr in Charge, FCC Changes are Coming

On November 17, 2024, President-elect Donald Trump selected Republican FCC Commissioner Brendan Carr to be the next chairman of the FCC.  Trump stated that Carr “is a warrior for Free Speech and has fought against the regulatory Lawfare that has stifled Americans’ Freedoms and held back our Economy. He will end the regulatory onslaught that has been crippling America’s Job Creators and Innovators and ensure that the FCC delivers for rural America.”

The selection of Carr is not surprising since sources have said he has been actively campaigning for the job for a long time.  His promotion and the fact that Republicans will have a 3-2 majority at the commission means we will see a complete change in direction, with fewer regulations and more accountability for how funds are spent.

Carr is a controversial choice to lead the commission.  He authored the chapter on the FCC in the infamous Project 2025 playbook, a “think-tank” proposal widely panned by liberals released by the conservative Heritage Foundation, which seeks to widely downsize the government.  In his chapter, Carr indicated that the FCC’s priorities should be “reining in Big Tech, promoting national security, unleashing economic prosperity, and ensuring FCC accountability and good governance.” 

Under Carr, we know the FCC will make a significant effort to modify section 230 of the Communications Decency Act which shields companies such as Google and Facebook from “being held legally liable for content posted by their users.  This means they are not considered the publisher of that content, thus making them immune from lawsuits.  While modifying or even eliminating section 230 will be a long fight involving the courts and Congress, there are other important issues that will directly impact telecom companies and ISPs very quickly.  Here are some of them:

Net Neutrality – The FCC is likely to drop any efforts to impose Net Neutrality and Title II utility-like regulations on broadband Internet access providers.  The latest Net Neutrality Order is already bogged down in the courts and is likely to be rejected there since the FCC’s Chevron deference has been all but eliminated by the Supreme Court.  Carr’s 58-page dissent to the Net Neutrality Order (Docket 23-320) begins with “[t]he Internet in America has thrived in the absence of 1930s command and control regulation by the government.  Indeed, bipartisan consensus emerged early on that the government should not regulate the Internet like Ma Bell’s copper line telephone monopoly.”  This tells you all you need to know about his feelings about Title II regulation and Net Neutrality.

Universal Service – With the Universal Service Fund relying on shrinking telecommunications revenues, Carr is in favor of expanding the contributions base to include “Big Tech” companies such as Amazon Prime, Netflix and YouTube.

Big Tech has been enjoying a free ride on our Internet infrastructure while skipping out on the billions of dollars in costs needed to maintain and build that network. Indeed, one study shows that the online streaming services provided by just five companies—Netflix, YouTube, Amazon Prime, Disney+ and Microsoft—account for a whopping 75 percent of all traffic on rural broadband networks. The same study shows that 77-94 percent of total network costs are related to adding capacity or otherwise supporting the delivery of those streaming services.  Ordinary Americans, not Big Tech, have been footing the bill for those costs.

Ending this corporate welfare is more than fair. It is consistent with the network compact that has prevailed since the earliest days of the Ma Bell telephone network. Historically, the businesses that derived the greatest benefit from a communications network paid the lion’s share of the costs. (Newsweek Op-ed, May 24, 2021.)

Digital Equity – In Docket 22-69, the FCC adopted rules to prevent broadband “digital discrimination.”  It enables the agency to investigate possible instances of discrimination of broadband access, work with companies to solve problems, facilitate mediation, and, when necessary, penalize companies for violating the rules.  Carr opposed the Order, and it now may be changed or not enforced.  He noted that it was a back-door way of imposing Title II regulations by controlling ISP speeds, capacities, latency, data caps, throttling, pricing, promotional rates, imposition of late fees, opportunity for equipment rental, installation time, contract renewal terms, service termination terms, and use of customer credit and account history.

Data Caps – The FCC recently began an Inquiry into ISP data caps, with the clear intent of forbidding them.  Carr is against the Inquiry and supports data caps.  He stated that “with today’s Notice of Inquiry, the FCC itself starts down the path of directly regulating rates.  It does so by seeking comment on controlling the price of broadband capacity (“data caps”).  Prohibiting customers from choosing to purchase plans with data caps—which are more affordable than unlimited ones—necessarily regulates the service rates they are paying for.’

These are only some of the changes we expect to see with the upcoming FCC.  We will continue to keep you informed of all the important changes when they happen.