FCC composition remains ‘murkier than ever,’ says NSR analyst

FCC meeting room
All remains quiet on the FCC nomination front. (BRENDAN SMIALOWSKI/AFP via Getty Images)

Few probably would have guessed that the industry would still be waiting around in late July for the Biden Administration to name a permanent FCC chair, but that’s where things stand.

The FCC majority traditionally mirrors the party of the sitting president. Today, it’s led by Acting Chairwoman Jessica Rosenworcel, a Democrat, who many expected would be named the permanent chair. Her fellow Democrat at the agency is Commissioner Geoffrey Starks, who joined the commission in 2019.  

Commissioners Brendan Carr and Nathan Simington are the two Republicans on the commission, leaving one seat vacant for a Democrat. Biden has yet to nominate the person to fill that seat, as well as the permanent chair position. More about Biden’s FCC nomination process is covered in depth here by Via Satellite.

One name that has been floated in recent weeks is that of long-time public activist Gigi Sohn, who was on the staff of former Chairman Tom Wheeler and led the consumer group Public Knowledge for more than a decade. New Street Research public policy analyst Blair Levin recently noted that Sohn was the subject of a trial balloon.

“We understand that effort led to enough Senatorial opposition that she is no longer at the top of the rankings leaving the situation murkier than ever,” Levin wrote in a July 26 note for investors. “While interim Chair Rosenworcel continues to have significant Senate support, her inability to obtain the nomination after more than six months suggests to us that there is some internal White House opposition. But there is no clear front-runner for replacing her.”

Earlier this month, Bernstein analyst Peter Supino downgraded Charter Communications, citing concerns about the potential for rising competition from fixed mobile and possible new leadership at the FCC, according to this Multichannel News report. The thought was that if Sohn were appointed chair, she would probably pursue a form of broadband price regulation, negatively affecting cable stocks.

In a July 23 report for investors, Cowen analysts said their colleague, Paul Gallant, previously noted that Rosenworcel “probably remains the slight favorite given her deep Democratic connections and the ‘tryout’ that she’s getting right now.” But if it’s not her, some progressive names they believe are in the mix include Sohn, as well as Jessica González, co-CEO of Free Press.

A possible compromise scenario would be Rosenworcel for chair and a progressive for the open Democratic seat; Parul Desai, a former FCC staffer with activist roots, may be a candidate, they said.

“A progressive in that slot probably would still exert influence on controversial items like Title 2/price regulation, since his/her vote is essential for passage given the two Republicans won't be supporting any new broadband regulation,” the Cowen analysts wrote. “That said, we do believe the regulatory climate has become 'less bad' or 'better than feared' over the past month as we note (1) the Biden competition executive order did not indicate any heavy-handed rate regulation (when it could have done so) and (2) the $65B broadband infrastructure funding has Republican support, which may provide a place at the table for Cable to help draft up more favorable policy.”

RELATED: More than 50 groups press Biden to fill open FCC seat

Last month, a coalition of 57 public interest groups pressed President Biden to fill the open FCC seat, arguing the move is necessary to break the political deadlock and make progress on key issues. The groups specifically pointed to the need for action to reform the Lifeline program, provide guidance for new broadband infrastructure deployments and reclassify broadband internet as a Title II service.