August 8, 2025 • 29 mins
President Donald Trump’s second term is bringing heightened focus on the regulatory environment and prospects for mergers. In the week’s Votes and Verdicts podcast, Bloomberg Intelligence analysts Jennifer Rie and Justin Teresi discuss catalysts related to the emerging antitrust approaches under Trump, including M&A trends at the DOJ stemming from the settlement of a merger case on Hewlett Packard Enterprise and Juniper Networks, and the latest on the FTC’s case against pharmacy benefit managers owned by UnitedHealth, Cigna and CVS. Holly Froum provides an update on this week’s tariff developments, with court challenges around the legality of reciprocal and fentanyl-related tariffs, and how rulings could affect new tariff mandates. Matthew Schettenhelm highlights activity at the FCC tied to the national television-ownership cap and comments by Newsmax opposed to deregulation.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
Welcome to Votes and Verdicts, the podcast of the litigation
and policy team at Bloomberg Intelligence. I'm justin terracy in
this week for Elliott Stein, who's taking some very well
deserved time off. But don't worry, We've got a great
episode for you today. I'll be joined by my colleague
Jennifer Ree. We'll talk all things the summer season of Antitrust.
(00:36):
Holy Frome joins us for an update on the ever
changing landscape of tariffs this week, and Matt Shettenhelm also
tunes in about FCC regulation on broadcasting and what's changing there.
But first, before we jump into today's episode, a quick
word about Bloomberg Intelligence. We're the investment research platform on
the Bloomberg terminal with five hundred analysts and strategy is
(01:00):
working across the globe and focus on all major markets.
Our coverage includes over two thousand equities and credits, and
we have outlooks on more than ninety industries and one
hundred market industries, currencies and commodities. So leading off this week,
I thought we'd start with antitrust. I might be a
little bit biased since it's my own coverage area, but
(01:20):
there definitely has been quite a bit going on, I'd say,
as us of late out of the Department of Justice
and starting things off, I think we'll turn to generate. So, Jen,
there's been a lot of controversy in the news the
last few weeks over a settlement that the Department of
Justice entered with Hewlett Packard over its acquisition of Juniper Networks.
This was entered on the eve of trial from what
(01:41):
I understand, So you give us a bit of a
sense of what's going on with that one over.
Speaker 2 (01:45):
There, Yeah, sure, thanks, justin you know, really definitely, we're
seeing some things happening in the antitrust world that are
troubling from an enforcement perspective, and you know, you put
your finger on it. The first one is this deal.
So just as a little bit of background on this deal,
it was fourteen billion dollars signed back in January of
twenty twenty four. So what happened with it, as happens
(02:06):
with many deals, is the Department of Justice investigated and
then sued to block the deal about a year later,
that was in January of this year, and the concern
in the DOJ had was that the combination was going
to harm what they called enterprise customers for w land solutions.
So what that is is really just basically wireless networks
for really huge entities like a big business, a hospital,
(02:28):
or a university, you know, much like we all have
Wi Fi at home. This is just a larger network
for these really large spread out entities. And they're basically
three main competitors that provide this product Hulot, Packard, Juniper,
and then Cisco. Cisco's actually the biggie in the market.
And the products you look, Packard and Juniper had that
overlap that compete were called Aruba and missed. So trial
(02:53):
was supposed to start in early July of this year.
But on June twenty seventh, this this settlement that you
referenced was announced, and what it included, right, is a divestiture. Oftentimes,
as you know, merger settlements include selling off some small
piece of the business to eliminate the overlap. That's really
what it's supposed to be. But in this case, the
divestiture was a small part of Hewlett Packard's networking business
(03:16):
and also a limited bit of license to some technology
that comes from Juniper. Now here's the rub. The allegation,
as I mentioned, was that it's large enterprise consumers that
would be harmed. But the divestiture was not a product
sold to large enterprise consumers. It was for very small businesses.
Speaker 1 (03:35):
Interesting, interesting and a lot of products most people have
probably never heard of either, but really interesting.
Speaker 2 (03:40):
That wrinkle there, Yeah, the business to business products, it's
a whole world and we're not always familiar with those.
But really, at the end of the day, it doesn't
resolve the overlap that caused concerns. You still have this
problematic competitive overlap between MYST and Aruba. So now here's
the thing that after this very odd settlement that surprised
most of us, I mean I was getting ready to
(04:01):
go to travel to this trial to listen, in all
of a sudden we see news reports. So it's news reports.
I can't confirm this, but what these reports have said
is that Hewlett Packard hired these lobbyists very close to
the president, and that these settlements were pushed on the
DOJ anti trust staff very much against their will. So
what you have then is a decision that's not based
(04:23):
on anti trust expertise, but based on influence and sort
of the transactional nature of this administration. And that's not
the way it's supposed to be right.
Speaker 1 (04:31):
Hearing a lot about things like that, as I've laid
out of DC for sure, right right.
Speaker 2 (04:35):
And so we know that Gail Slater, who is the
Assistant Attorney General in charge of anti trust at the DJ,
that would be the leading person for decision maker for
anti trust at the DJ, pushback, but she was overruled
by those senior to her, including Pambondi, who are not
anti trust experts. And then two of her deputies, who
also apparently objected to the settlement, were fired. And what
(04:59):
was report is that HPE had hired non the antitrust
but very politically connected lawyers to negotiate the settlement. These
are people who are close to Trump or have worked
for them in the past. And the Wall Street Journal
even just reported, by the way that one of these
politically connected lawyers appeared to take it on as a
personal challenge to get this settlement done after the anti
trust enforcers questioned his role in the process.
Speaker 1 (05:22):
Oh boy.
Speaker 2 (05:23):
Yeah. So this is a real divergence from how things
have been done in the M and A anti trust
world essentially since the Nixon administration, and it's not good
news for enforcement, our consumers.
Speaker 1 (05:33):
Yeah, Yeah, that sounds like a pretty complicated situation there.
You know, hard to read the tea leaves too, obviously
when we're talking about news reports, and not necessarily a
confirmation about how things have necessarily rolled out by the
actual folks at the DOJ either. But I guess you know,
is there any recourse for this? I mean, the deals closed,
what happens now?
Speaker 2 (05:52):
Well, so what happens now is that it has to
go through what's called a Tunny Act procedure. That's a
little bit of a safeguard for this kind of political influence,
but really, honestly, it's very limited. And what that means
is that the settlement isn't final until a judge has
reviewed it and signed off. And this happens, by the way,
for all Department of Justice anti trust settlements and not
(06:13):
for the FTC. And the reason, by the way, it
was because it was passed during the Nixon administration and
after allegations that ITT, a company that had been sued
under anti trust by the anti trust enforcers at that time,
basically got their case dropped by paying a lot of
money to the nineteen seventy two Republican National Convention and
(06:33):
then Congress, which actually got things done in a bipartisan manner.
BacT passed the Tunny Act, and that says that judges
are supposed to ask whether a DOJ anti trust settlement
is in the public interest. But I said it's limited right.
The judges are supposed to give deference to the DOJ's
expertise and can't really unwinded merger. The judge can approve, reject,
(06:58):
or require modifications to the settlement. The courts can solicit
public comments, they can hold hearings, they can require the
DOJ to respond to criticisms. But I would say in
ninety nine percent of the cases the judge just sign off.
It's kind of pro forma. And in a very very
few rare circumstances, settlements have been sent back to the
DOJ to supplement them or to revise them. But the
(07:21):
thing is justin it's a little bit backwards because if
the judge doesn't like the settlement and the companies in
the DJ can't agree to a new one, there's not
that much that can be done because then the companies,
because the companies, as soon as they settle with the
DOJ are allowed to close and integrate. So if these companies,
HPNG know, we are already closed, they're already integrating before
the tiny A procedure's done. So if you end up
(07:43):
with a scenario where there's no settlement because the judge
is sent it back but they can't agree to a
new one, and now all you have is litigation. Now
the case has to be tried, it's extremely highly unlikely
that any judge is going to unwind a finished deal.
So it's not really it's very messy, right, So that's
what we're where we are now in this case. We're
we're going to wait and a lot of people are
(08:04):
pushing this judge to really give this a solid review
under the tiny Act.
Speaker 1 (08:09):
Got it, got it? So you know, you know, we
were saying too just with what's happening at DOJ, you
know a lot of what we're we're depending on our
news reports right about how things are actually rolling out, right,
And we've seen a few companies under a scrutiny by
antitrust enforcers these days, right, whether it be from the
previous administration or companies you know that were looked at
under the Biden DJ that maybe we're continuing an investigation
(08:33):
into today, right, You know, but you know, actions to
kind of you know, sport those investigations or cases, you know,
whether it be hiring lobbyists, making payments to Trump causes.
You know, dropping DEI programs has been a big one too,
you know, investment development in the US. All these different
ways it seems like to create favor with the administration.
(08:53):
I mean, what do you think, Jen, do you think
the new approach really is just to transact with the
president rather to you know, mount an actual a trust
defense or to actually explain, you know, your business practices
to the authorities. What do you think about all that?
Speaker 2 (09:05):
Well, you know, we have this Hewlett Packard example, but
I think based on news reports that a pattern actually
really is emerging because you know, another sort of oddity
that happened in the M and A world, The DOJ
had sued in January twenty twenty five to block a
deal between American Express Global Business Travel and Carson Wagon
lit Travel. Right, right, that case, very recently and without
(09:27):
any explanation, was dropped. Now there was no settlement here,
it was just dropped so doesn't go through a tiny
AC procedure. And then it was reported that AMX GBT,
the Global Business Travel had hired a guy called Brian Ballard,
a longtime Trump becker who had raised fifty million in
his twenty twenty four election. So we see that, and
(09:49):
then I read, which is no surprise to me, that
antitrust lawyers are basically advising clients now that maybe an
M and A or maybe facing monopolization charges to find
lawyers or obvious that are close to Trump. So we
are moving toward this sort of position of defending deals
as an influence maneuver and as a transactional thing, rather
(10:10):
than and resolving the antitrust problems and getting real deal resolutions.
Speaker 1 (10:15):
God, what definitely a headache, I would say, And you know,
I mean, I don't know if that makes the whole
situation easier to comprehend what's going to happen for a client,
or make some more difficult. I mean, it's really hard
to say. But you know, I guess, you know, trying
to apply this to what we could what else we
could be seeing, you know, for the second half of
the year.
Speaker 2 (10:34):
What other deals are.
Speaker 1 (10:34):
Pending right now at DOJ R FTC that still need clearance?
Speaker 2 (10:38):
You know, there are quite a few. Because all of
a sudden, we had a little bit of as pause
in the market with deal making, but now things are
kind of flowing, and we do have some pretty big
pending deals. Google's trying to buy Whiz Charters trying to
buy cocks. You have Baker Hughes buying a company called
Chart Industries, and of course probably everyone's right about Dixon Footlocker.
(10:58):
Those are products we all understand, and you know, justin
and you know this because you're covering some of these cases.
They are also a whole bunch of pending monopolization suits. Absolutely, yeah, Google, Meta, Amazon, Apple,
Live Nation. I mean, if they're a big, huge platform,
they've probably been sou so you know, and I read
read that recently Live Nation put a Trump loyalist on
(11:20):
its board, and also that Apple has announced just the
other day a major investment in US manufacturing one hundred billion.
So I think we're beginning to see all sorts of
movements sort of in this influence peddling area, and we'll
have to see what happens because we know before the
election that some of the CEOs of these big tech
companies like Mark Zuckerberg, we're donating money to Republican causes.
(11:45):
We're there with Trump at the inauguration, and it hasn't
really seemed to help them yet. But maybe the tide
is turning now justin sure.
Speaker 1 (11:52):
Sure, I mean it's you know, some days it seems
that way, Jen, in another days it doesn't, right, And
I think maybe we can touch upon this a little
bit later with Holly. But you know, even think about
companies like Nvidia, right, and you know, there were news
reports last year of that that investigations had started at
DOJ related to anti trust issues, you know. And then
you know, just two weeks ago, we have President Trump saying,
(12:13):
you know, quite quite frankly, at at at an event
that you know, we considered breaking up the company and
opted against it once he you know, found out how
difficult that would be to do. Then yesterday we see
tariffs of maybe one hundred percent on chips that are
imported into the United States. Right, So that it seems
like things are making some movements in one direction. Then
you know, a week goes by and perhaps things move
(12:35):
backward to another.
Speaker 2 (12:36):
But I think you're right.
Speaker 1 (12:37):
I think we're definitely seeing this interplay between folks in
the White House that that certainly seems to be a
growing trend. There's there's no doubt about that, right.
Speaker 2 (12:45):
Right exactly, and it's it's it's going to be interesting
to see the next three and a half years here.
But you know, I have been saying for quite a
long time about the Google Search case that if a
remedy comes down, which we expect any day, which is
that Google has to sell Chrome, I don't think that's
what's going to be in the remedy, but let's just
say it is. There is a chance, about a forty
(13:07):
percent chance I think that that could be in the remedy.
And then Google appeals that the Trump administration then settles
the case with Google for something less, and we'll we'll
have to see because that would be sort of history
replaying itself, because that's kind of what happened with the
Microsoft situation. But I could talk about this all day.
Speaker 1 (13:24):
Let's move on.
Speaker 2 (13:25):
Let's move on to some of the anti trust topics.
Sticking with antitrust, let's move on topics you're covering and
it so that you don't have to talk to yourself
and ask yourself questions. I'll take over here, perfume many.
Speaker 1 (13:38):
I appreciate that any help I can get as well
as much appreciated Jed.
Speaker 2 (13:42):
So, justin let's move on to other anti trust matters
that you're covering, since we've kind of split stuff up here,
since there's so much going on in PBMs, that's a
really big area that's been a focus all over the place.
These are pharmacy benefit managers, and you've been covering the
litigation been ongoing against these middlemen in the pharmaceutical area.
(14:05):
So we have a case at the FTC that's in
what's called a Part three which is litigation but different
than in the federal courts. Why don't you explain all
that to us?
Speaker 1 (14:14):
Yeah, definitely, J. And So this one really started bubbling
up last fall. I think it's probably the last real
significant Part three enforcement action outside of a merger context
that we have kind of as a hangover, if you will,
from the con FTC right before the Trump administration in January.
But what the case is is really built upon these
reports and investigations that were conducted at the FTC, and
(14:37):
it basically alleges that these middlemen, these drug middlemen, if
you will, the pharmacy benefit managers that sit between the
pharmaceutical companies, the insurance companies and consumers, really what they
have done is in order to place a particular drug
on a formula ay at an insurance company. It's alleged
that they demand these high rebates from the drug manufacturers
(14:57):
in order to do so. The alligation is that they
might pocket those rebates not pass them onto consumers, and
as a result, the list prices for drugs that are
paid by folks who are uninsured are perhaps underinsured, are
astronomically high, way higher than they need to be. That
is the chief allegation of the case is that drug
prices are driven up by the practices of these PBMs
(15:20):
who sit in the middle of the chain. So what
happened though, the case was brought, as you said, internally
as a part three preceding case at the internal Tribunal
over at the FTC and not in a federal court.
And right now, you know, it seems like all roads
eventually lead to a federal court on this one, and
there are a few reasons why. But you know, Jen,
(15:41):
I know we've talked about this before, but it seems
like every last kind of constitutional issue or you know,
new way of thinking I would say about the FTC's
scope of power and how broad it should be really
seems to be triggered by this litigation. And right now
the reason why I'm this up today is that there's
been a motion to lift a stay of the case.
(16:04):
Chair Ferguson at the FTC and Commissioner Mater had proved,
you know, Chair Ferguson had been recused from the case.
We now have Commissioner Major in at the FTC. There
are two FTC commissioners who are now available to participate
in the litigation. There were none before. That's why this
day was issued. So the reason for issuing that sday
is now gone. I think for that reason, the state
(16:25):
probably becomes lifted. But the PBMs have indicated they're going
to file a motion to dismiss very shortly at the
FTC in this tribunal, and I think the effect of
that is to push the case up to Chair Ferguson
and up to Commissioner Mater. It frankly give them some
kind of an opportunity to say whether bringing this case
in a part three was really the way to proceed
(16:46):
in the first place. I think we're going to have
to see that some decision making made around that concept.
Does it get refiled in federal court maybe, does it
have different claims than those assert it. Maybe it does
to Both Chair Ferguson and Commissioner Mater have been somewhat
critical of this expansive view of Section five of the
FTC Act, which is the actual way the claims are structured.
(17:06):
Here there could be some changes made to how they're
actually pursuing this from an anti trust perspective.
Speaker 2 (17:11):
Okay, so remains to be seen then, whether this continues
on as a Part three, whether it gets moved to
Federal Quarter, whether it continues at all.
Speaker 1 (17:20):
Right, yeah, I think that's right, you know. But even
if it continues as a Part three. You know, there
are our broader problems, I would say, with the litigation
outside of the claims itself, and those really lie in
the area of some Supreme Court precedent that's been handed
down the last couple of years. In the first case,
there is the Darquesy decision from last year that took
(17:42):
issue with the litigation of private rights right in an
actual internal preceding itself. And that's a pretty complicated concept,
I'd say. But the argument basically is, look, there are
too many big things, big ticket items being litigated as
part of this case for it to be litigated at
the agency belong in a federal court. That's the really
basic way to kind of paint the picture around that.
(18:04):
And the other issue is this whole discussion we've seen
about whether or not the president can remove FTC commissioners
and thereby the judges that sit under them. Is there
if the removal is not allowed, can this court then
be hearing Is it constitutional for this internal court to
be hearing the case? Those are some really big questions.
They're currently on appeal to the Eighth Circuit in this case,
(18:27):
and we'll probably have a hearing on that this fall,
and that could also be determinative of whether or not
the litigation can continue as a Part three even if
the commissioners do you want it to continue it that way?
Speaker 2 (18:38):
So what about some of the other cases I know
that you were following, starting kind of late in the
Biden administration when we still had Lena Khan as the
chair of the FTC. I know that they brought some unusual,
somewhat novel cases against Pepsiico and also Deer I know
as John Deere, but I think they go by Deer
in company they do. Yeah, those Part threees are what's
going on? With those cases.
Speaker 1 (19:00):
Yeah, So interestingly enough, neither of those were brought as
a Part three But you know, we've already kind of
seen these these developments and changes the cases, frankly along
with the changes in ideology that we have running the Commission. Right,
So the PEPSI case, Commissioners Ferguson and Holyoak were really
critical of that litigation when it was filed. The case
(19:20):
has been since dismissed. The FTC which volunteerily withdrew that matter.
They're not pursuing it anymore. It was a Robinson Patment
Act case, right, which we could see it's complicated statute
for sure, but we could see more attempts to bring
a case under that law in the future. And the
deer case that's continuing on as part of a multi
district litigation and federal court in Illinois so alive and well,
(19:41):
probably see a settlement there later on. But you know,
to your point, we haven't seen a new Part three
action from an enforcement perspective outside of mergers with this
new commission, and I think there really is there are
a lot of valid questions to be asked as to
whether the current makeup of the Commission is really interested
in you using that tool for an enforcement matter outside
(20:02):
of merger clearance.
Speaker 2 (20:04):
Well, you know, justin I know, you and I could
sit around and talk for like the next two hours
just about anti rust matter and everything that's happening in
the antrust world because it's so interesting to us. But
maybe it's time to move on to some other legal
subjects and policy subjects.
Speaker 1 (20:19):
Our listeners might appreciate that.
Speaker 2 (20:20):
I might appreciate that, and our colleagues that are waiting
patiently might also. So I'm going to turn the moderator
roll back to you and you can move on to
some of the other subjects.
Speaker 1 (20:29):
Sounds great, thanks, Jen. So let's bring in Holly from
now to talk a little bit about tariffs this week. Holly,
I feel like we could have a weekly podcast just
about tariffs and everything that you're covering week to week.
It seems to be the perennial topic. Although something perennial
is the word if it's every week there's something new
that's happening. But uh yeah, let me start just asking you.
(20:51):
You know, so you've been following a bunch of lawsuits
right recently that challenge the reciprocal tariffs and fentanyl tariffs.
Can you just give us a quick update about what
the STAF is on that litigation?
Speaker 2 (21:01):
Thanks, Justin.
Speaker 3 (21:02):
I think you could safely say that it's the daily
changes on tariffs. So what's happening now in the courts
are there are various appeals making their way around the
appellate court. So the most advanced case is the one
before the Federal Circuit, and that's the Appellate court for
the International Trade Court. And as some of you may know,
(21:24):
that court found reciprocal and pentanal trafficking tariffs unlawful. It
found the reciprocal tariffs the president posed were unbounded and
so it said that the statute doesn't allow them, but
if it did, the statute would be an unconstitutional delegation
of Congress's power. And with regard to fentanyl teriffs, it
(21:45):
found those terriffs weren't sufficiently related to the emergency. The
presidents cited the fentanyl emergency as the basis for them.
So the Federal Circuit heard oral argument on the appeal
of that ruling on July thirty first, and based on
that hearing, we think they may agree the tariffs are unlawful.
We think their opinion could come in late August. And
(22:08):
there are also appeals before other circuits. So there's an
appeal of a Washington District court's ruling finding tariffs unlawful
that appeals before the Washington d c. Circuit. So the
district court found tariffs unlawful on different grounds than the
International Trade Court and basically said the statute the President used,
which is the International Emergency Economic Powers Act or AIPA,
(22:31):
it doesn't allow tariffs at all, and so struck the
tariffs on those grounds. So a hearing on that appeal
is set to be heard September thirtieth. And then the
third appeal is before the Ninth Circuit, and that arises
from a California federal court's ruling that it doesn't have
jurisdiction to hear challenges to the tariffs, only the International
(22:54):
Trade Court does. So we expect that this Supreme Court
will ultimately have to decide this case, and we'll render
an opinion relatively quickly, possibly as early as four Q.
And what we said is that the Supreme Court may
find reciprocal terrorists lawful, but may say that the fentanyl
tariffs are lawful.
Speaker 1 (23:11):
Okay, got it? And holiday President Trump was in the
news this week because he's pledged to impose tariffs of
up to two hundred and fifty percent on pharmaceuticals.
Speaker 2 (23:21):
What is that?
Speaker 1 (23:21):
What would that would that also fail if the reciprocal
tariffs are deemed unlawful? Is there a tie in there
between the two?
Speaker 3 (23:28):
Well, not necessarily, because the statute the president would you
would likely use to impose the terriffs on pharmaceuticals is
section two thirty two of the Trade Expansion Act. And
what that section allows is if the President's Commerce Department
finds imports threatened to impair national security, the president can
quote adjust imports, and the statute also mentioned in the
(23:50):
headline duties, so that language is arguably a lot clearer
than the language and the emergency Statute, which merely says
the President can regulate imports but never mentions the word tariffs.
And so courts have held that section two thirty two
allows president to impose tariffs, and that section has been
used by multiple presidents to do so, whereas President Trump
(24:10):
is the first president to use the emergency statue to
imposed tarffs. So even if reciprocal tariffs are deemed unlawful,
it doesn't mean that the section two thirty two terraffs
will be deemed unlawful.
Speaker 1 (24:24):
Okay, got it, Thanks, Holly. Really appreciate the updates on tariffs,
and I'm sure we'll be talking about them again next week.
That seems to be the name of the game right now,
but right now turning over last, but it's certainly not
leads to Matt shutting Helm down in DC. So, Matt,
I know you've been tracking developments at the Federal Communications
Commission related to broadcasting, including some significant deregulatory moves down there.
(24:48):
You've had some action there this week related to national
TV ownership cabs and could you tell us a.
Speaker 2 (24:52):
Bit about that.
Speaker 4 (24:53):
Yeah, thanks, justin. Yeah, a lot of client interest around
the potential for deregulation for the broadcast TV industry, which
has for decades been subject to these FCC rules that
all of their competitors that you know, over the Internet,
all these new ways we get video, they don't face
these sorts of limits, and yet broadcasters are still stuck
(25:18):
with these these these limits on how many stations they
can own and how big they can get that that
date back from from a different time, and there's a
considered push from this administration to ease those rules. We
saw the first steps towards that goal this week when
comments were filed. When the FCC asked, how should we
(25:40):
ease the national ownership cap. The national ownership cap is
this thirty nine percent limit on how many households TV
broadcasters can reach. We're talking about companies like Nextstar, Sinclair, Tegna,
Disney Fox, companies that own your local broadcast TV stations,
and how many stations they can own. As I said,
(26:03):
right now, it's thirty nine percent of the US subject
to a limit. The FCC asked for comments on how
and whether it should ease that limit or remove it entirely,
and we saw this week the every interested party filing
their opening comment about what the FCC should do, And
(26:24):
as I went through those, I'm not really surprised by
anything that I saw there. The broadcast broadcasters pushed strongly
for elimination of the national ownership cap. People the interests
on the other side of the negotiating table, the cable
groups that have to negotiate with the broadcasters, they say, no,
(26:46):
we need to keep this rule in place. It still
serves an important value. Public interest groups that like to
protect localism also defended the rule. All of that was expected,
and so I wasn't really surprised by anything we saw there.
The one thing I wanted to footnote and keep an
eye on was the opposition from Newsmax and its potential
(27:10):
ties to President Trump. And so the one thing I'd
be a little bit cautious of from the broadcasters perspective
is if President Trump suddenly jumps in the middle of
this in a way that we don't expect and and
so right now, I don't think that's going to happen.
But when you see Newsmax pushing hard against the deregulation,
(27:32):
it does make you, you know, want to keep an
eye on whether President Trump might get involved here.
Speaker 1 (27:38):
Interesting it sounds like Newsmax might have the Trump card,
so to speak, at us, at least.
Speaker 4 (27:43):
You want to be watchful of that possibility the day.
Speaker 1 (27:47):
Yeah, and I personally can't believe we haven't made that
pun on this podcast before now, either, But there you go.
Speaker 4 (27:53):
I'm glad you brought us there. Yeah.
Speaker 1 (27:55):
Yeah, So, Matt, what happens next with all of this?
Speaker 4 (27:59):
Yeah? So, so I don't think the FCC is going
to take real long. Sometimes these FCC rulemakings can can
drag out for months or years. Formally, we have reply
comments due in a couple of weeks. August twenty second
is the final deadline for filing. Typically the FCC will
keep the docket open after that and take meetings with
(28:22):
interested parties. But I think the FCC is, you know,
not going to sit around real long on this. So
I think action in the fourth quarter is a real
possibility when the FCC will adopt a final order easing
or eliminating this national ownership cap. October twenty eighth meeting
looks like a real possibility to me. So after that,
(28:45):
what we're inevitably going to have a court fight about
whether the FCC can do it or not, or only
Congress can can remove this national ownership cap. I think
the FCC can win that fight. I'd give the FCC
a slight edge in that court case, but it's a
tough issue. It might depend on what court ends up
hearing this, what three judge panel ends up hearing it.
(29:07):
So a lot of moving pieces to come, but I
don't think we'll be waiting long. I think the FCC
will move on this by the end of the year.
Speaker 1 (29:13):
Got it, Got it all right?
Speaker 2 (29:14):
Thanks? So much.
Speaker 1 (29:15):
Matt really appreciate that update. So thanks to all my
colleagues for joining me today. Really appreciate that. And thanks
most especially to you the listener for tuning in I'm
justin trecy and for Elliott Segin this weekend. This with
votes and verdicts.
Welcome to Votes and Verdicts, the podcast of the litigation
and policy team at Bloomberg Intelligence. I'm justin terracy in
this week for Elliott Stein, who's taking some very well
deserved time off. But don't worry, We've got a great
episode for you today. I'll be joined by my colleague
Jennifer Ree. We'll talk all things the summer season of Antitrust.
(00:36):
Holy Frome joins us for an update on the ever
changing landscape of tariffs this week, and Matt Shettenhelm also
tunes in about FCC regulation on broadcasting and what's changing there.
But first, before we jump into today's episode, a quick
word about Bloomberg Intelligence. We're the investment research platform on
the Bloomberg terminal with five hundred analysts and strategy is
(01:00):
working across the globe and focus on all major markets.
Our coverage includes over two thousand equities and credits, and
we have outlooks on more than ninety industries and one
hundred market industries, currencies and commodities. So leading off this week,
I thought we'd start with antitrust. I might be a
little bit biased since it's my own coverage area, but
(01:20):
there definitely has been quite a bit going on, I'd say,
as us of late out of the Department of Justice
and starting things off, I think we'll turn to generate. So, Jen,
there's been a lot of controversy in the news the
last few weeks over a settlement that the Department of
Justice entered with Hewlett Packard over its acquisition of Juniper Networks.
This was entered on the eve of trial from what
(01:41):
I understand, So you give us a bit of a
sense of what's going on with that one over.
Speaker 2 (01:45):
There, Yeah, sure, thanks, justin you know, really definitely, we're
seeing some things happening in the antitrust world that are
troubling from an enforcement perspective, and you know, you put
your finger on it. The first one is this deal.
So just as a little bit of background on this deal,
it was fourteen billion dollars signed back in January of
twenty twenty four. So what happened with it, as happens
(02:06):
with many deals, is the Department of Justice investigated and
then sued to block the deal about a year later,
that was in January of this year, and the concern
in the DOJ had was that the combination was going
to harm what they called enterprise customers for w land solutions.
So what that is is really just basically wireless networks
for really huge entities like a big business, a hospital,
(02:28):
or a university, you know, much like we all have
Wi Fi at home. This is just a larger network
for these really large spread out entities. And they're basically
three main competitors that provide this product Hulot, Packard, Juniper,
and then Cisco. Cisco's actually the biggie in the market.
And the products you look, Packard and Juniper had that
overlap that compete were called Aruba and missed. So trial
(02:53):
was supposed to start in early July of this year.
But on June twenty seventh, this this settlement that you
referenced was announced, and what it included, right, is a divestiture. Oftentimes,
as you know, merger settlements include selling off some small
piece of the business to eliminate the overlap. That's really
what it's supposed to be. But in this case, the
divestiture was a small part of Hewlett Packard's networking business
(03:16):
and also a limited bit of license to some technology
that comes from Juniper. Now here's the rub. The allegation,
as I mentioned, was that it's large enterprise consumers that
would be harmed. But the divestiture was not a product
sold to large enterprise consumers. It was for very small businesses.
Speaker 1 (03:35):
Interesting, interesting and a lot of products most people have
probably never heard of either, but really interesting.
Speaker 2 (03:40):
That wrinkle there, Yeah, the business to business products, it's
a whole world and we're not always familiar with those.
But really, at the end of the day, it doesn't
resolve the overlap that caused concerns. You still have this
problematic competitive overlap between MYST and Aruba. So now here's
the thing that after this very odd settlement that surprised
most of us, I mean I was getting ready to
(04:01):
go to travel to this trial to listen, in all
of a sudden we see news reports. So it's news reports.
I can't confirm this, but what these reports have said
is that Hewlett Packard hired these lobbyists very close to
the president, and that these settlements were pushed on the
DOJ anti trust staff very much against their will. So
what you have then is a decision that's not based
(04:23):
on anti trust expertise, but based on influence and sort
of the transactional nature of this administration. And that's not
the way it's supposed to be right.
Speaker 1 (04:31):
Hearing a lot about things like that, as I've laid
out of DC for sure, right right.
Speaker 2 (04:35):
And so we know that Gail Slater, who is the
Assistant Attorney General in charge of anti trust at the DJ,
that would be the leading person for decision maker for
anti trust at the DJ, pushback, but she was overruled
by those senior to her, including Pambondi, who are not
anti trust experts. And then two of her deputies, who
also apparently objected to the settlement, were fired. And what
(04:59):
was report is that HPE had hired non the antitrust
but very politically connected lawyers to negotiate the settlement. These
are people who are close to Trump or have worked
for them in the past. And the Wall Street Journal
even just reported, by the way that one of these
politically connected lawyers appeared to take it on as a
personal challenge to get this settlement done after the anti
trust enforcers questioned his role in the process.
Speaker 1 (05:22):
Oh boy.
Speaker 2 (05:23):
Yeah. So this is a real divergence from how things
have been done in the M and A anti trust
world essentially since the Nixon administration, and it's not good
news for enforcement, our consumers.
Speaker 1 (05:33):
Yeah, Yeah, that sounds like a pretty complicated situation there.
You know, hard to read the tea leaves too, obviously
when we're talking about news reports, and not necessarily a
confirmation about how things have necessarily rolled out by the
actual folks at the DOJ either. But I guess you know,
is there any recourse for this? I mean, the deals closed,
what happens now?
Speaker 2 (05:52):
Well, so what happens now is that it has to
go through what's called a Tunny Act procedure. That's a
little bit of a safeguard for this kind of political influence,
but really, honestly, it's very limited. And what that means
is that the settlement isn't final until a judge has
reviewed it and signed off. And this happens, by the way,
for all Department of Justice anti trust settlements and not
(06:13):
for the FTC. And the reason, by the way, it
was because it was passed during the Nixon administration and
after allegations that ITT, a company that had been sued
under anti trust by the anti trust enforcers at that time,
basically got their case dropped by paying a lot of
money to the nineteen seventy two Republican National Convention and
(06:33):
then Congress, which actually got things done in a bipartisan manner.
BacT passed the Tunny Act, and that says that judges
are supposed to ask whether a DOJ anti trust settlement
is in the public interest. But I said it's limited right.
The judges are supposed to give deference to the DOJ's
expertise and can't really unwinded merger. The judge can approve, reject,
(06:58):
or require modifications to the settlement. The courts can solicit
public comments, they can hold hearings, they can require the
DOJ to respond to criticisms. But I would say in
ninety nine percent of the cases the judge just sign off.
It's kind of pro forma. And in a very very
few rare circumstances, settlements have been sent back to the
DOJ to supplement them or to revise them. But the
(07:21):
thing is justin it's a little bit backwards because if
the judge doesn't like the settlement and the companies in
the DJ can't agree to a new one, there's not
that much that can be done because then the companies,
because the companies, as soon as they settle with the
DOJ are allowed to close and integrate. So if these companies,
HPNG know, we are already closed, they're already integrating before
the tiny A procedure's done. So if you end up
(07:43):
with a scenario where there's no settlement because the judge
is sent it back but they can't agree to a
new one, and now all you have is litigation. Now
the case has to be tried, it's extremely highly unlikely
that any judge is going to unwind a finished deal.
So it's not really it's very messy, right, So that's
what we're where we are now in this case. We're
we're going to wait and a lot of people are
(08:04):
pushing this judge to really give this a solid review
under the tiny Act.
Speaker 1 (08:09):
Got it, got it? So you know, you know, we
were saying too just with what's happening at DOJ, you
know a lot of what we're we're depending on our
news reports right about how things are actually rolling out, right,
And we've seen a few companies under a scrutiny by
antitrust enforcers these days, right, whether it be from the
previous administration or companies you know that were looked at
under the Biden DJ that maybe we're continuing an investigation
(08:33):
into today, right, You know, but you know, actions to
kind of you know, sport those investigations or cases, you know,
whether it be hiring lobbyists, making payments to Trump causes.
You know, dropping DEI programs has been a big one too,
you know, investment development in the US. All these different
ways it seems like to create favor with the administration.
(08:53):
I mean, what do you think, Jen, do you think
the new approach really is just to transact with the
president rather to you know, mount an actual a trust
defense or to actually explain, you know, your business practices
to the authorities. What do you think about all that?
Speaker 2 (09:05):
Well, you know, we have this Hewlett Packard example, but
I think based on news reports that a pattern actually
really is emerging because you know, another sort of oddity
that happened in the M and A world, The DOJ
had sued in January twenty twenty five to block a
deal between American Express Global Business Travel and Carson Wagon
lit Travel. Right, right, that case, very recently and without
(09:27):
any explanation, was dropped. Now there was no settlement here,
it was just dropped so doesn't go through a tiny
AC procedure. And then it was reported that AMX GBT,
the Global Business Travel had hired a guy called Brian Ballard,
a longtime Trump becker who had raised fifty million in
his twenty twenty four election. So we see that, and
(09:49):
then I read, which is no surprise to me, that
antitrust lawyers are basically advising clients now that maybe an
M and A or maybe facing monopolization charges to find
lawyers or obvious that are close to Trump. So we
are moving toward this sort of position of defending deals
as an influence maneuver and as a transactional thing, rather
(10:10):
than and resolving the antitrust problems and getting real deal resolutions.
Speaker 1 (10:15):
God, what definitely a headache, I would say, And you know,
I mean, I don't know if that makes the whole
situation easier to comprehend what's going to happen for a client,
or make some more difficult. I mean, it's really hard
to say. But you know, I guess, you know, trying
to apply this to what we could what else we
could be seeing, you know, for the second half of
the year.
Speaker 2 (10:34):
What other deals are.
Speaker 1 (10:34):
Pending right now at DOJ R FTC that still need clearance?
Speaker 2 (10:38):
You know, there are quite a few. Because all of
a sudden, we had a little bit of as pause
in the market with deal making, but now things are
kind of flowing, and we do have some pretty big
pending deals. Google's trying to buy Whiz Charters trying to
buy cocks. You have Baker Hughes buying a company called
Chart Industries, and of course probably everyone's right about Dixon Footlocker.
(10:58):
Those are products we all understand, and you know, justin
and you know this because you're covering some of these cases.
They are also a whole bunch of pending monopolization suits. Absolutely, yeah, Google, Meta, Amazon, Apple,
Live Nation. I mean, if they're a big, huge platform,
they've probably been sou so you know, and I read
read that recently Live Nation put a Trump loyalist on
(11:20):
its board, and also that Apple has announced just the
other day a major investment in US manufacturing one hundred billion.
So I think we're beginning to see all sorts of
movements sort of in this influence peddling area, and we'll
have to see what happens because we know before the
election that some of the CEOs of these big tech
companies like Mark Zuckerberg, we're donating money to Republican causes.
(11:45):
We're there with Trump at the inauguration, and it hasn't
really seemed to help them yet. But maybe the tide
is turning now justin sure.
Speaker 1 (11:52):
Sure, I mean it's you know, some days it seems
that way, Jen, in another days it doesn't, right, And
I think maybe we can touch upon this a little
bit later with Holly. But you know, even think about
companies like Nvidia, right, and you know, there were news
reports last year of that that investigations had started at
DOJ related to anti trust issues, you know. And then
you know, just two weeks ago, we have President Trump saying,
(12:13):
you know, quite quite frankly, at at at an event
that you know, we considered breaking up the company and
opted against it once he you know, found out how
difficult that would be to do. Then yesterday we see
tariffs of maybe one hundred percent on chips that are
imported into the United States. Right, So that it seems
like things are making some movements in one direction. Then
you know, a week goes by and perhaps things move
(12:35):
backward to another.
Speaker 2 (12:36):
But I think you're right.
Speaker 1 (12:37):
I think we're definitely seeing this interplay between folks in
the White House that that certainly seems to be a
growing trend. There's there's no doubt about that, right.
Speaker 2 (12:45):
Right exactly, and it's it's it's going to be interesting
to see the next three and a half years here.
But you know, I have been saying for quite a
long time about the Google Search case that if a
remedy comes down, which we expect any day, which is
that Google has to sell Chrome, I don't think that's
what's going to be in the remedy, but let's just
say it is. There is a chance, about a forty
(13:07):
percent chance I think that that could be in the remedy.
And then Google appeals that the Trump administration then settles
the case with Google for something less, and we'll we'll
have to see because that would be sort of history
replaying itself, because that's kind of what happened with the
Microsoft situation. But I could talk about this all day.
Speaker 1 (13:24):
Let's move on.
Speaker 2 (13:25):
Let's move on to some of the anti trust topics.
Sticking with antitrust, let's move on topics you're covering and
it so that you don't have to talk to yourself
and ask yourself questions. I'll take over here, perfume many.
Speaker 1 (13:38):
I appreciate that any help I can get as well
as much appreciated Jed.
Speaker 2 (13:42):
So, justin let's move on to other anti trust matters
that you're covering, since we've kind of split stuff up here,
since there's so much going on in PBMs, that's a
really big area that's been a focus all over the place.
These are pharmacy benefit managers, and you've been covering the
litigation been ongoing against these middlemen in the pharmaceutical area.
(14:05):
So we have a case at the FTC that's in
what's called a Part three which is litigation but different
than in the federal courts. Why don't you explain all
that to us?
Speaker 1 (14:14):
Yeah, definitely, J. And So this one really started bubbling
up last fall. I think it's probably the last real
significant Part three enforcement action outside of a merger context
that we have kind of as a hangover, if you will,
from the con FTC right before the Trump administration in January.
But what the case is is really built upon these
reports and investigations that were conducted at the FTC, and
(14:37):
it basically alleges that these middlemen, these drug middlemen, if
you will, the pharmacy benefit managers that sit between the
pharmaceutical companies, the insurance companies and consumers, really what they
have done is in order to place a particular drug
on a formula ay at an insurance company. It's alleged
that they demand these high rebates from the drug manufacturers
(14:57):
in order to do so. The alligation is that they
might pocket those rebates not pass them onto consumers, and
as a result, the list prices for drugs that are
paid by folks who are uninsured are perhaps underinsured, are
astronomically high, way higher than they need to be. That
is the chief allegation of the case is that drug
prices are driven up by the practices of these PBMs
(15:20):
who sit in the middle of the chain. So what
happened though, the case was brought, as you said, internally
as a part three preceding case at the internal Tribunal
over at the FTC and not in a federal court.
And right now, you know, it seems like all roads
eventually lead to a federal court on this one, and
there are a few reasons why. But you know, Jen,
(15:41):
I know we've talked about this before, but it seems
like every last kind of constitutional issue or you know,
new way of thinking I would say about the FTC's
scope of power and how broad it should be really
seems to be triggered by this litigation. And right now
the reason why I'm this up today is that there's
been a motion to lift a stay of the case.
(16:04):
Chair Ferguson at the FTC and Commissioner Mater had proved,
you know, Chair Ferguson had been recused from the case.
We now have Commissioner Major in at the FTC. There
are two FTC commissioners who are now available to participate
in the litigation. There were none before. That's why this
day was issued. So the reason for issuing that sday
is now gone. I think for that reason, the state
(16:25):
probably becomes lifted. But the PBMs have indicated they're going
to file a motion to dismiss very shortly at the
FTC in this tribunal, and I think the effect of
that is to push the case up to Chair Ferguson
and up to Commissioner Mater. It frankly give them some
kind of an opportunity to say whether bringing this case
in a part three was really the way to proceed
(16:46):
in the first place. I think we're going to have
to see that some decision making made around that concept.
Does it get refiled in federal court maybe, does it
have different claims than those assert it. Maybe it does
to Both Chair Ferguson and Commissioner Mater have been somewhat
critical of this expansive view of Section five of the
FTC Act, which is the actual way the claims are structured.
(17:06):
Here there could be some changes made to how they're
actually pursuing this from an anti trust perspective.
Speaker 2 (17:11):
Okay, so remains to be seen then, whether this continues
on as a Part three, whether it gets moved to
Federal Quarter, whether it continues at all.
Speaker 1 (17:20):
Right, yeah, I think that's right, you know. But even
if it continues as a Part three. You know, there
are our broader problems, I would say, with the litigation
outside of the claims itself, and those really lie in
the area of some Supreme Court precedent that's been handed
down the last couple of years. In the first case,
there is the Darquesy decision from last year that took
(17:42):
issue with the litigation of private rights right in an
actual internal preceding itself. And that's a pretty complicated concept,
I'd say. But the argument basically is, look, there are
too many big things, big ticket items being litigated as
part of this case for it to be litigated at
the agency belong in a federal court. That's the really
basic way to kind of paint the picture around that.
(18:04):
And the other issue is this whole discussion we've seen
about whether or not the president can remove FTC commissioners
and thereby the judges that sit under them. Is there
if the removal is not allowed, can this court then
be hearing Is it constitutional for this internal court to
be hearing the case? Those are some really big questions.
They're currently on appeal to the Eighth Circuit in this case,
(18:27):
and we'll probably have a hearing on that this fall,
and that could also be determinative of whether or not
the litigation can continue as a Part three even if
the commissioners do you want it to continue it that way?
Speaker 2 (18:38):
So what about some of the other cases I know
that you were following, starting kind of late in the
Biden administration when we still had Lena Khan as the
chair of the FTC. I know that they brought some unusual,
somewhat novel cases against Pepsiico and also Deer I know
as John Deere, but I think they go by Deer
in company they do. Yeah, those Part threees are what's
going on? With those cases.
Speaker 1 (19:00):
Yeah, So interestingly enough, neither of those were brought as
a Part three But you know, we've already kind of
seen these these developments and changes the cases, frankly along
with the changes in ideology that we have running the Commission. Right,
So the PEPSI case, Commissioners Ferguson and Holyoak were really
critical of that litigation when it was filed. The case
(19:20):
has been since dismissed. The FTC which volunteerily withdrew that matter.
They're not pursuing it anymore. It was a Robinson Patment
Act case, right, which we could see it's complicated statute
for sure, but we could see more attempts to bring
a case under that law in the future. And the
deer case that's continuing on as part of a multi
district litigation and federal court in Illinois so alive and well,
(19:41):
probably see a settlement there later on. But you know,
to your point, we haven't seen a new Part three
action from an enforcement perspective outside of mergers with this
new commission, and I think there really is there are
a lot of valid questions to be asked as to
whether the current makeup of the Commission is really interested
in you using that tool for an enforcement matter outside
(20:02):
of merger clearance.
Speaker 2 (20:04):
Well, you know, justin I know, you and I could
sit around and talk for like the next two hours
just about anti rust matter and everything that's happening in
the antrust world because it's so interesting to us. But
maybe it's time to move on to some other legal
subjects and policy subjects.
Speaker 1 (20:19):
Our listeners might appreciate that.
Speaker 2 (20:20):
I might appreciate that, and our colleagues that are waiting
patiently might also. So I'm going to turn the moderator
roll back to you and you can move on to
some of the other subjects.
Speaker 1 (20:29):
Sounds great, thanks, Jen. So let's bring in Holly from
now to talk a little bit about tariffs this week. Holly,
I feel like we could have a weekly podcast just
about tariffs and everything that you're covering week to week.
It seems to be the perennial topic. Although something perennial
is the word if it's every week there's something new
that's happening. But uh yeah, let me start just asking you.
(20:51):
You know, so you've been following a bunch of lawsuits
right recently that challenge the reciprocal tariffs and fentanyl tariffs.
Can you just give us a quick update about what
the STAF is on that litigation?
Speaker 2 (21:01):
Thanks, Justin.
Speaker 3 (21:02):
I think you could safely say that it's the daily
changes on tariffs. So what's happening now in the courts
are there are various appeals making their way around the
appellate court. So the most advanced case is the one
before the Federal Circuit, and that's the Appellate court for
the International Trade Court. And as some of you may know,
(21:24):
that court found reciprocal and pentanal trafficking tariffs unlawful. It
found the reciprocal tariffs the president posed were unbounded and
so it said that the statute doesn't allow them, but
if it did, the statute would be an unconstitutional delegation
of Congress's power. And with regard to fentanyl teriffs, it
(21:45):
found those terriffs weren't sufficiently related to the emergency. The
presidents cited the fentanyl emergency as the basis for them.
So the Federal Circuit heard oral argument on the appeal
of that ruling on July thirty first, and based on
that hearing, we think they may agree the tariffs are unlawful.
We think their opinion could come in late August. And
(22:08):
there are also appeals before other circuits. So there's an
appeal of a Washington District court's ruling finding tariffs unlawful
that appeals before the Washington d c. Circuit. So the
district court found tariffs unlawful on different grounds than the
International Trade Court and basically said the statute the President used,
which is the International Emergency Economic Powers Act or AIPA,
(22:31):
it doesn't allow tariffs at all, and so struck the
tariffs on those grounds. So a hearing on that appeal
is set to be heard September thirtieth. And then the
third appeal is before the Ninth Circuit, and that arises
from a California federal court's ruling that it doesn't have
jurisdiction to hear challenges to the tariffs, only the International
(22:54):
Trade Court does. So we expect that this Supreme Court
will ultimately have to decide this case, and we'll render
an opinion relatively quickly, possibly as early as four Q.
And what we said is that the Supreme Court may
find reciprocal terrorists lawful, but may say that the fentanyl
tariffs are lawful.
Speaker 1 (23:11):
Okay, got it? And holiday President Trump was in the
news this week because he's pledged to impose tariffs of
up to two hundred and fifty percent on pharmaceuticals.
Speaker 2 (23:21):
What is that?
Speaker 1 (23:21):
What would that would that also fail if the reciprocal
tariffs are deemed unlawful? Is there a tie in there
between the two?
Speaker 3 (23:28):
Well, not necessarily, because the statute the president would you
would likely use to impose the terriffs on pharmaceuticals is
section two thirty two of the Trade Expansion Act. And
what that section allows is if the President's Commerce Department
finds imports threatened to impair national security, the president can
quote adjust imports, and the statute also mentioned in the
(23:50):
headline duties, so that language is arguably a lot clearer
than the language and the emergency Statute, which merely says
the President can regulate imports but never mentions the word tariffs.
And so courts have held that section two thirty two
allows president to impose tariffs, and that section has been
used by multiple presidents to do so, whereas President Trump
(24:10):
is the first president to use the emergency statue to
imposed tarffs. So even if reciprocal tariffs are deemed unlawful,
it doesn't mean that the section two thirty two terraffs
will be deemed unlawful.
Speaker 1 (24:24):
Okay, got it, Thanks, Holly. Really appreciate the updates on tariffs,
and I'm sure we'll be talking about them again next week.
That seems to be the name of the game right now,
but right now turning over last, but it's certainly not
leads to Matt shutting Helm down in DC. So, Matt,
I know you've been tracking developments at the Federal Communications
Commission related to broadcasting, including some significant deregulatory moves down there.
(24:48):
You've had some action there this week related to national
TV ownership cabs and could you tell us a.
Speaker 2 (24:52):
Bit about that.
Speaker 4 (24:53):
Yeah, thanks, justin. Yeah, a lot of client interest around
the potential for deregulation for the broadcast TV industry, which
has for decades been subject to these FCC rules that
all of their competitors that you know, over the Internet,
all these new ways we get video, they don't face
these sorts of limits, and yet broadcasters are still stuck
(25:18):
with these these these limits on how many stations they
can own and how big they can get that that
date back from from a different time, and there's a
considered push from this administration to ease those rules. We
saw the first steps towards that goal this week when
comments were filed. When the FCC asked, how should we
(25:40):
ease the national ownership cap. The national ownership cap is
this thirty nine percent limit on how many households TV
broadcasters can reach. We're talking about companies like Nextstar, Sinclair, Tegna,
Disney Fox, companies that own your local broadcast TV stations,
and how many stations they can own. As I said,
(26:03):
right now, it's thirty nine percent of the US subject
to a limit. The FCC asked for comments on how
and whether it should ease that limit or remove it entirely,
and we saw this week the every interested party filing
their opening comment about what the FCC should do, And
(26:24):
as I went through those, I'm not really surprised by
anything that I saw there. The broadcast broadcasters pushed strongly
for elimination of the national ownership cap. People the interests
on the other side of the negotiating table, the cable
groups that have to negotiate with the broadcasters, they say, no,
(26:46):
we need to keep this rule in place. It still
serves an important value. Public interest groups that like to
protect localism also defended the rule. All of that was expected,
and so I wasn't really surprised by anything we saw there.
The one thing I wanted to footnote and keep an
eye on was the opposition from Newsmax and its potential
(27:10):
ties to President Trump. And so the one thing I'd
be a little bit cautious of from the broadcasters perspective
is if President Trump suddenly jumps in the middle of
this in a way that we don't expect and and
so right now, I don't think that's going to happen.
But when you see Newsmax pushing hard against the deregulation,
(27:32):
it does make you, you know, want to keep an
eye on whether President Trump might get involved here.
Speaker 1 (27:38):
Interesting it sounds like Newsmax might have the Trump card,
so to speak, at us, at least.
Speaker 4 (27:43):
You want to be watchful of that possibility the day.
Speaker 1 (27:47):
Yeah, and I personally can't believe we haven't made that
pun on this podcast before now, either, But there you go.
Speaker 4 (27:53):
I'm glad you brought us there. Yeah.
Speaker 1 (27:55):
Yeah, So, Matt, what happens next with all of this?
Speaker 4 (27:59):
Yeah? So, so I don't think the FCC is going
to take real long. Sometimes these FCC rulemakings can can
drag out for months or years. Formally, we have reply
comments due in a couple of weeks. August twenty second
is the final deadline for filing. Typically the FCC will
keep the docket open after that and take meetings with
(28:22):
interested parties. But I think the FCC is, you know,
not going to sit around real long on this. So
I think action in the fourth quarter is a real
possibility when the FCC will adopt a final order easing
or eliminating this national ownership cap. October twenty eighth meeting
looks like a real possibility to me. So after that,
(28:45):
what we're inevitably going to have a court fight about
whether the FCC can do it or not, or only
Congress can can remove this national ownership cap. I think
the FCC can win that fight. I'd give the FCC
a slight edge in that court case, but it's a
tough issue. It might depend on what court ends up
hearing this, what three judge panel ends up hearing it.
(29:07):
So a lot of moving pieces to come, but I
don't think we'll be waiting long. I think the FCC
will move on this by the end of the year.
Speaker 1 (29:13):
Got it, Got it all right?
Speaker 2 (29:14):
Thanks? So much.
Speaker 1 (29:15):
Matt really appreciate that update. So thanks to all my
colleagues for joining me today. Really appreciate that. And thanks
most especially to you the listener for tuning in I'm
justin trecy and for Elliott Segin this weekend. This with
votes and verdicts.
Host
Elliott Stein
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