New FCC chair says no DEI allowed for US mergers and acquisitions

Recent statements from Federal Communications Commission (FCC) Chair Brendan Carr have underscored the importance of companies addressing issues related to Diversity, Equity, and Inclusion (DEI) in the context of mergers and acquisitions. Carr emphasized that companies seeking regulatory approval must prioritize ending any forms of discriminatory practices in relation to DEI.

Carr specifically mentioned several high-profile deals that could face scrutiny due to their DEI implications, including Paramount’s merger with Skydance, Verizon’s acquisition of Frontier Communications, and T-Mobile’s proposed purchase of a significant portion of US Cellular. Highlighting these cases, Carr emphasized the FCC’s commitment to ensuring that transactions demonstrate a genuine commitment to serving the public interest and do not perpetuate controversial DEI practices.

DEI has increasingly drawn attention in the wake of the Trump administration’s efforts to curtail diversity programs and pressure major companies to reevaluate their DEI strategies. Carr’s remarks reflect a broader trend within regulatory bodies seeking to address issues of inequality and discrimination in various business contexts.

According to Carr, companies must demonstrate a clear commitment to addressing DEI concerns to receive regulatory approval. Failure to do so may jeopardize the approval process, as the FCC is tasked with evaluating transactions based on their alignment with the public interest. Carr’s stance indicates a robust approach to scrutinizing companies’ adherence to DEI principles and ensuring that mergers and acquisitions do not perpetuate discriminatory practices.

In his efforts to address DEI-related issues, Carr has initiated investigations into companies such as Comcast, expressing concerns about the adequacy of their efforts to address DEI concerns. Specifically, Carr raised questions about Verizon’s progress in addressing DEI initiatives and urged the company’s executives to engage with FCC officials overseeing their acquisition of Frontier Communications. These actions indicate the FCC’s proactive stance in holding companies accountable for their commitments to DEI and promoting transparency in the regulatory process.

Moreover, Carr announced a comprehensive investigation into the US operations of Chinese companies on the FCC’s “Covered List,” such as Huawei, ZTE, and China Telecom. The probe aims to assess the extent of these companies’ operations in the US and prevent them from circumventing FCC regulations through unregulated practices. By targeting both domestic and international entities, Carr’s investigations underscore the FCC’s commitment to upholding regulatory standards and ensuring compliance across diverse industries.

Overall, Carr’s statements signal a shift towards greater scrutiny of DEI practices in the context of mergers and acquisitions, reflecting broader efforts to promote fairness, transparency, and accountability in business transactions. As regulatory bodies like the FCC continue to prioritize DEI considerations, companies must demonstrate a proactive approach to addressing these issues to navigate the complex landscape of mergers and acquisitions successfully.