With Companies Under Pressure to Scrub DEI Efforts, FCC Guidelines Unclear

Telecom carriers are under pressure from the FCC to end their diversity, equity and inclusion programs, with Chairman Brendan Carr saying last week that the FCC won’t bless mergers by companies that have DEI policies in place. Carr sent a warning letter Friday to Disney on its DEI programs. Industry officials say companies have no choice to comply, though the FCC moves have created regulatory uncertainty. T-Mobile explained in a letter to the FCC how it’s getting rid of DEI.

It’s not clear how the FCC is defining DEI, Commissioner Anna Gomez said at a news conference Thursday. “What we have right now is an undefined, unproven and indistinguishable standard of invidious discrimination being used to target these companies,” she said. “It is incumbent on this commission to define what invidious discrimination even is” and explain what evidence the agency has “that it even exists” at the targeted companies.

“What you are seeing is private businesses under attack for promoting fairness,” Gomez said. “Some would like to claim that fairness for all requires discrimination against some. That's simply not true.”

Robby Starbuck, an anti-DEI influencer who has met with Carr, said via email that DEI programs "limit people’s potential by making value judgments about their immutable characteristics." In "a merit-based system, the best of all races can and will succeed," said Starbuck, who identifies as Latino. "The FCC has sweeping powers that they can and should use to stop these activists from corrupting the telecommunications industry."

In his own news conference Thursday, Carr defined “invidious discrimination” as “when you're dividing and discriminating [against] people based on race and gender.” While “really unobjectionable” human resources policies could be classified as DEI efforts by some companies, he said the FCC would seek to use its equal employment opportunity rules to “root out where people are discriminating based on race and gender.”

“Carr has not defined DEI, nor do I think he ever will,” New Street’s Blair Levin told us Friday, building on an investor note he posted last week (see 2503240005). “Carr has not clarified why he is bringing DEI into a merger review, instead of bringing an enforcement action, nor do I think he ever will.”

Levin said the reason the chairman prefers to act through transaction policy is that in a merger review, “he has lots of cards” to play, versus “no cards” in an enforcement action. However, “as a legal matter, he has more authority” in an enforcement proceeding, he said.

Levin, a former FCC chief of staff, also questioned how the FCC is proceeding. “Carr is publicly accusing the companies of violations of law before the investigation,” which is “contrary to prior FCC practice, which was to investigate first before … public announcements.” Carr also hasn’t cited any evidence of employment actions “that constitute invidious discrimination,” he said.

A second analyst said Carr wants companies to “self-police, self-censor.” Carr is saying “why don’t you guys figure it out,” the analyst said, noting that the changes expected are “significant” for covered companies.

Disney Under Fire

Carr sent a warning letter to Disney CEO Robert Iger over the company’s DEI programs, he announced Friday in a post on X. Carr said in an interview last week that he was working on the letter (see 2503250062), which is similar to previous warnings sent to Verizon (see 2502270072) and Comcast (see 2502110063). “I am concerned that ABC and its parent company have been or may still be promoting invidious forms of DEI in a manner that does not comply with FCC regulations.” The letter points to Disney’s offering employees “racially segregated” affinity groups, alleged race-based hiring by ABC, and inclusion standards for Disney’s content that required characters to be from underrepresented groups.

The letter said that though Disney may have recently walked back some of those efforts, “it is not clear that the underlying policies have changed in a fundamental manner, nor that past practices complied with relevant FCC regulations.” The FCC’s Enforcement Bureau “will be engaging with your company to obtain an accounting of Disney and ABC’s DEI programs, policies and practices.” ABC didn’t comment.

T-Mobile, which is seeking various regulatory approvals, including for its buy of wireless assets from UScellular (see 2412270031), told the FCC it has changed its DEI policies in response to Carr's questions. Its filing was made Thursday in docket 24-151, the docket on the carrier’s proposed joint venture to acquire fiber provider Lumos (see 2404250047). That deal was approved Friday following receipt of the letter (see 2503280023).

“We recognize that the legal and policy landscape surrounding [DEI] under federal law has changed,” said the filing by T-Mobile General Counsel Mark Nelson, which noted recent U.S. Supreme Court decisions and two executive orders from President Donald Trump. “DEI has become a politically charged topic because some interpret it as sanctioning preferential treatment of some Americans based on impermissible distinctions.”

“Let me be clear: T-Mobile is fully committed to identifying and rooting out any policies and practices that enable such discrimination, whether in fulfillment of DEI or any other purpose,” Nelson wrote. T-Mobile modified its approach to supplier diversity, “which in the past was subject to directives from the prior administration that were recently rescinded by the President’s Executive Orders and subsequent agency actions.”

The carrier “eliminated specific targets or goals for diverse spend in our procurement policies and instead made clear that it is T-Mobile’s policy that purchases and contracts are awarded based on the best qualified and most competitive suppliers,” the filing said, adding that the “External Diversity & Inclusion Councils” were also dissolved. The Lumos buy will result in the “formation of a new company that we have determined from its inception will not promote invidious forms of discrimination.”

Defining Discrimination

Painting efforts to mitigate historical discrimination as discriminatory is an old tactic that dates back to the administration of President Ronald Reagan, said Atinuke Adediran, a Fordham law professor who studies corporate diversity programs. Such programs have had only mixed success in leading to more diverse companies, but there's likely to be a regression if regulatory pressure forces companies to drop them, she said.

“I don't think there will be progress made without some either regulatory pressure or societal pressure, and now ... the society pressure is going the other way,” Adediran said. Companies that react to FCC or White House pressure to scrub mention of DEI from their materials are likely to handicap their ability to address issues related to diversity among their employees. “If you don't talk about the problems, you're not going to be able to fix them,” she said.

Summit Ridge Group President Armand Musey said companies could look for guidance in U.S. Supreme Court decisions in two cases brought by Students for Fair Admissions (SFFA), which rejected affirmative action programs by Harvard University and the University of North Carolina. Both were decided in 2023.

“Carr may be looking at the equal protection clause of the 14th Amendment” in light of those court rulings, Musey said in an email. “A reasonable approach for a company seeking to comply with an unclear directive” would be to read the decisions “and substitute ‘admission’ with ‘hiring’ and ‘promoting’ and adjust their internal practices accordingly.”

In practice, the FCC’s definition of discriminatory DEI programs appears to be broad.

Carr’s letter to Comcast called out mentions on its website of DEI as a core value and DEI training for executives. His letter to Verizon called out website mentions of DEI as well, but also mentioned reports that Verizon diversity training programs include mentions of systemic racism and white privilege. Carr’s letter called that training “an extensive race reeducation program based on the core tenants of critical race theory.”

On the FCC website, most pages containing information on the FCC’s now-dissolved diversity advisory committee have been scrubbed. Its Office of Workplace Diversity still has a website, though FCC employees have told us the staff has been put on administrative leave.

Free State Foundation President Randolph May said there isn’t “inherently” a legal problem with examining a regulated company’s DEI activities as part of an FCC public interest determination, since the FCC’s original anti-discrimination regulations “were enforced under its public interest authority.”

“I do think it would be wise for the commission to set forth more clearly what conduct related to DEI activities would be considered inconsistent with the public interest,” May added in an email: “Ultimately, that’s a matter of fair notice and due process.”

Numerous companies in the communications space take broadly supportive stances on their websites about the general notions of DEI, but at the same time, some have rolled back specific efforts.