Over the past few months, the Federal Communications Commission has been using its power in what legal experts say are unprecedented ways to take aim at one of the president’s top vexations: Diversity and inclusion initiatives.
FCC chair Brendan Carr warned in March that businesses promoting DEI may not receive approval from the agency for their merger and acquisition deals. He specifically called out Paramount, Verizon and T-Mobile, all of which had M&A agreements before the agency at the time. “Any businesses that are looking for FCC approval, I would encourage them to get busy ending any sort of their invidious forms of DEI discrimination,” Carr told Bloomberg in an interview.
That’s exactly what has played out. All three businesses have rolled back their DEI policies. Just days after doing so, Verizon and T-Mobile were both given the green light by the FCC for major acquisitions. “I’ve never seen this happen before,” says Michael Elkins, partner and founder at MLE Law. The agency is using “their leverage to get rid of whatever they deem unlawful.”
T-Mobile, Paramount, Verizon, and the FCC did not respond to Fortune’s request for comment.
DEI watchers Fortune spoke with say they’re not shocked that the federal government is taking an active interest in these policies—President Trump, after all, has been explicit in speeches and executive orders about wanting to do away with DEI. But they add that the FCC’s actions show how far the administration is willing to go outside traditional norms to accomplish its anti-DEI agenda.
“I think what we’re seeing from this administration is an attempt to be as creative as possible in thinking widely about what other agencies they can bring into this anti-DEI operation,” says David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion, and Belonging at New York University. “What other tactics they can use that haven’t been done before.”
The FCC DEI rollbacks
The FCC dealings of Verizon, Paramount, and T-Mobile all follow a familiar pattern.
Verizon sought approval from the FCC earlier this year for a $20 billion deal to buy broadband provider Frontier Communications. But in a February letter, the agency raised concerns over the telecommunication company’s DEI programs, warning that they didn’t meet the standards set by the Trump administration.
Verizon responded to the agency in May, pledging to remove DEI from its training materials, modify its supplier networks as well as its employee resource groups (ERGs), and remove hiring goals aimed at increasing the representation of women and minorities. “[V]erizon recognizes that some DEI policies and practices could be associated with discrimination,” wrote Vandana Venkatesh, executive vice president and chief legal officer for the company. “For that reason Verizon reaffirms its commitment to equal employment opportunity and nondiscrimination and is modifying its practices and ending its DEI related policies.”
The day after Verizon sent that letter,the FCC approved the merger, and specifically pointed to Verizon’s decision to discontinue its DEI initiatives as a key factor for giving its approval.
Entertainment giant Paramount also has an $8 billion deal with media producer Skydance pending review by the FCC. In February the company announced it was pulling back on DEI initiatives, including certain hiring goals and data collection around diversity and gender, the New York Timesreported. Paramount is still awaiting FCC approval.
Most recently,T-Mobile asked for the FCC’s approval to buy almost all of U.S. Cellular’s wireless operations in a deal valued at $4.4 billion, as well as acquiring internet service provider Metronet in a separate deal. Mark Nelson, executive vice president and general counsel of T-Mobile, sent a letter to FCC Chairman Brendan Carr on July 8, announcing the end of all of the company’s DEI programs. That includes ensuring the company will no longer “have any individual roles or teams focused on DEI,” removing references to DEI on its website as well as training materials, and making changes to supplier diversity commitments.
“[W]e recognize that the legal and policy landscape surrounding DEI under federal law has changed and we remain fully committed to ensuring that T-Mobile does not have any policies or practices that enable invidious discrimination whether in fulfillment of DEI or any other purpose,” wrote Nelson.
The FCC cleared the merger three days later on July 11. Brian Carr called T-Mobile’s decision a “good step forward for equal opportunity, nondiscrimination, and the public interest,” on X on Wednesday.
Weighing the risks
Legal experts are not shocked that T-Mobile, Verizon and Paramount have all bowed to FCC pressure and changed their DEI programs. These are companies that are looking to “get these deals done as quickly as possible,” says Elkins.
But they might have had a legal case against the agency if they had chosen to fight for their DEI programs, according to Paul Goodman, a lawyer at the Center for Accessible Technology, an organization that works to support equitable consumer access to public utilities and telecommunications. While companies often agree to certain conditions set by the FCC in order to secure approval, it’s rare for those conditions to fall outside of the potential impacts to everyday consumers.
“I think there’s a very strong legal case to push back against the FCC, because the FCC is not using the proper legal standard,” he notes.
DEI watchers warn that rolling back DEI programs could also lead to future problems for these corporations. Around 68% of business leaders say that moving away from their DEI policies would actually impose more risk for their companies, according to a recent study from the Meltzer Center and non-profit Catalyst.
“These companies have made a huge mistake in deciding that they’re going to appease the FCC with these demands rather than pushing back,” says Goodman. “I think we’re looking at potentially Target-level consumer response.”
