Panel: FCC's Anti-DEI Effort Unlikely to Prevail in Court

“I can't tell you how it would fare under a particular standard until you tell me what the supposedly invidious discrimination is. And I just don't see a lot of there there,” said Free Press General Counsel Matt Wood. “I think it would be very hard to win that case for the government,” even assuming targeted companies were violating discrimination laws internally, said James Copeland, director of legal policy for the Manhattan Institute.

“What crimes are these companies accused of committing when we talk about invidious discrimination?” Wood asked. “I think that [FCC Chairman Brendan Carr] and others have gotten away with just kind of waving this around and rattling the saber and saying, ‘We're going to come after you for breaking the law,’ without actually articulating what that might mean.”

While Carr has cited the agency’s equal employment opportunity policies and language in the Communications Act about the FCC ensuring service on a nondiscriminatory basis, there isn’t a clear basis in those rules for the FCC to threaten action over the internal policies of private companies, Wood said. The successful conservative campaign against Chevron deference is likely to lead to court defeats for the FCC, he said, adding that the agency is likely to have trouble showing that any harms from corporate diversity, equity and inclusion programs are transaction-specific.

Copeland said that while he has long believed the federal government should act to rein in discriminatory behavior cloaked as supporting diversity, Carr’s methods and lack of specificity on what is allowed aren't how it should be done. “I think it's long past time that our executive branch got serious about enforcing the law in this space and reining in overt race discrimination in this industry particularly, and so I would applaud Chairman Carr for having that sort of focus,” Copeland said. “All that being said, I wish it were done in a more targeted way.”

Rather than vague threats, the FCC should use careful analysis and investigation to target specific practices, he said. “There's a vague, sort of diffuse nature to the way this is being positioned. I don't generally like that,” Copeland said. “I don't like regulatory threat efforts by tweet or press conference.”

Panelist Timothy Simon, a former member of the California Public Utilities Commission, said FCC pressure on companies over DEI policies could put them in an awkward spot with local officials. “You may comply with Chairman Carr's edict,” but “now you're going to have to report to that local planning commission, that local permitting process. And if you're in large metro areas ... then you're going to have to explain to that Latino or African American or woman chair why you've taken the position that DEI is illegal.”

Simon, who worked in former California Gov. Arnold Schwarzenegger’s administration, said he agreed in part with critics of DEI programs. “I will be the first to say that D, E and I were co-opted, and my community, the African Americans, has been the least of the beneficiaries." However, it benefits the government and companies to ensure there's broad access and engagement with communications platforms, even in historically underserved communities, he said. “The expansion that we're going to need in broadband infrastructure ... we're going to need everyone, all hands on deck.” If there isn’t enough American know-how to handle broadband infrastructure, “we will see that we're bringing in foreign employees, foreign expertise, and that, I will say, is a national security risk.”

Copeland and Simon were critical of the idea of using the FCC’s approval authority over mergers and acquisitions to pressure companies on their diversity policies. Carr has said the agency won’t approve deals for companies with DEI programs (see 2503210049). Zeroing in on DEI policies means regulators won’t be focusing on how a merger affects consumers, Simon said. “I don't like using M&A as the linchpin here,” Copeland added. Antitrust law shouldn’t be “used as a weapon, because the next administration can have a diametrically opposite view on many of these questions and do the exact same thing in reverse."

Unfortunately, the FCC doesn’t need to be able to prevail in court to block deals from happening, Copeland said. The agency is “relying on the fact that the government can basically kill the merger anyway” simply by “delaying it and hanging it up.”