The Federal Communications Commission is one of the U.S.’s most powerful agencies, with vast powers to regulate some of the largest corporations in America, and with a gridlocked Congress likely to prevent President-elect Joe Biden from advancing his economic agenda through legislation, it could become an epicenter of policymaking during the next four years.
Here’s what investors and consumers should expect from a Biden FCC:
Who will be the next FCC Chairperson ?
Biden’s choice to lead the agency will be critical to determining how aggressive it will be in the coming years. The most obvious candidates include Mignon Clyburn, former FCC Commissioner and acting chair and Jessica Rosenworcel, a current Democratic FCC commissioner.
Cameron Kerry, Brookings fellow and former acting secretary at the Commerce Department told MarketWatch that because of the power of the agency, it’s unlikely that the Senate will move quickly to nominate a new commissioner.
“We’re going to see what’s likely to be a 2-2 commission for a while,” he said, after the Senate Republicans confirmed Nathan Simington in the current lame duck session of Congress, leaving the body with 2 members from each party. A key argument for why Republicans made this a priority was so that Democrats would not have the power to “immediately get to work,” as a Wall Street Journal editorial warned they might before his confirmation.
A key variable here is the Georgia Senate runoff races : If Democrats are able to pick up two Senate seats in that contest, Biden will be able to confirm his nominees with the tie-breaking vote of Vice President-elect Harris, assuming his party can avoid any defections in an evenly split upper chamber.
A likely goal for a Democratic FCC, especially if a Democratic majority delivers for Biden his ideal pick for chairperson, is the return of so-called “net neutrality” rules that prohibit internet service providers from discriminating against certain content, by providing it to consumers at different speeds or by charging content producers — Netflix Inc. /zigman2/quotes/202353025/composite NFLX +0.58% or Walt Disney Co. /zigman2/quotes/203410047/composite DIS +3.33% — for the right to deliver their product to consumers.
In order to bring back such rules, the FCC would have to reclassify internet service providers as a “Title II” telecommunications service that gives the agency broad regulatory powers over them.
Net neutrality has been hotly debated for years, especially after the FCC implemented the rules in 2015 under President Barack Obama, only to have those rules and the Title II classification that authorized them, repealed in 2018 under President Donald Trump and current FCC Chair Ajit Pai.
Pai has defended his decision, arguing that broadband speeds have increased over the past two years and that consumers have faced no decline in the quality of their experience on the internet. “The American people can still access their favorite websites,” he said in October . “They don’t pay extra to avoid the slow lane.”
Internet service providers have thrived under the new rules. Pure-play broadband providers Charter Communications Inc. /zigman2/quotes/201656355/composite CHTR -1.12% , Altice USA Inc. /zigman2/quotes/207426329/composite ATUS -1.30% and Cable One Inc. /zigman2/quotes/207363308/composite CABO +2.28% have all greatly outperformed the S&P 500 index since the beginning of 2018, according to FactSet.
Other major broadband providers Comcast Corp. /zigman2/quotes/209472081/composite CMCSA +2.07% , Verizon Communications Inc. /zigman2/quotes/204980236/composite VZ +0.28% and AT&T Inc. /zigman2/quotes/203165245/composite T +1.67% have fared less well, but their struggles cannot be attributed to their broadband businesses.
“The only reason you’re seeing any kind of downturn for them is the bigger conglomerates have sometimes taken a bath on their media properties,” said Matt Wood, vide president of policy and general counsel at Free Press, nonpartisan group that advocates for affordable internet access.
Wood argued that the reason consumers haven’t seen an appreciable degradation in service after net neutrality’s repeal is that service providers are still operating under the threat of state-level regulation and because companies like Charter have been operating under merger conditions that have continued to impose net-neutrality like regulations.