AAF: FCC Could Use Merger Conditions to Compensate for Chevron Loss

The FCC could potentially use merger conditions as a replacement for regulations the courts knocked down after the overturning of Chevron deference, said Jeffrey Westling, American Action Forum director-technology and innovation policy. In a blog post Wednesday, he wrote, “If the agency fails to defend its signature rules in court, it could follow the lead of the Biden Administration’s FTC and DOJ and use merger review as a venue for regulation through condition setting.” Westling pointed to device unlocking rules as an example: the agency is considering requiring broadband providers to unlock devices within a certain time frame, but some providers -- including T-Mobile -- are already subject to such requirements because of merger conditions. These conditions let the agency “go around existing rulemaking procedures,” are often negotiated in haste, and aren’t subject to judicial review, Westling said. The agency is reviewing a number of large telecom deals, including DirecTV/Dish, Verizon/Frontier and T-Mobile/USCellular, Westling noted. “How the FCC reviews these transactions can give additional insight into how the agency may approach its merger review process after the overturning of the Chevron doctrine.” If the agency begins using conditions to block acquisitions, then Congress should act to reign in the agency, or even take away the FCC’s merger review authority. Though transactions would still be subject to FTC or DOJ review, those agencies lack the FCC's expansive authority to impose conditions that aren’t related to competition, Westling said.