Hello and welcome to the Votes and Verdicts podcast, hosted by the Litigation and policy team at Bloomberg Intelligence, the investment research platform of Bloomberg LP on the Bloomberg Terminal. Bloomberg Intelligence has five hundred analysts and strategists working across the globe and focused 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. This podcast series examines the intersection of business policy and law, and today's our weekly check in on the litigation and policy catalysts that we're watching, or at least some of them, and that we think will impact companies across a number of different sectors. My name is Elliott Stein. I'm an analyst with the Bloomberg Intelligence covering litigation in the financials sector. I'm delighted today as always, to be joined by a handful of my colleagues who
cover litigation and policy for BI. As always, you can find all of our research on the Bloomberg terminal at big and more specifically, you can find our litigation and policy research on the Bloomberg terminal at BI laws go. Today is June twenty sixth, twenty twenty five. It's about nine am here in New York. And with that, let's get started. I want to bring in my colleague Tamlin Basin, who covers techp issues that are being litigated or in
some sort of policy development. So, Tamlin, you have been covering a bunch of cases related to AI, artificial intelligence and potential copyright infringement. Super interesting issue. Just this week, in fact, I think just yesterday we got a really big decision involving META. A couple of days before that
we got another sort of groundbreaking decision. I think, why don't you come in sort of give us, you know, the layer of the lay and what the overall context is here and what these decisions mean.
Yeah, sure, thank you, Ellia, And you're right. So in the US alone, there's over forty lawsuits and these are lawsuits that are being litigated by copyright owners content owners. So this is print media, authors, books, films, music recordings, and they've sued developers of large language models. Now this includes both some of those pure play large language model firms like open AI, Anthropic Perplexity Stability AI as well as some of the larger tech firms that have also
tried their hand in developing large language models. So Meta, Google, Microsoft have all been sued. Now, No, I have been covering this for a while, and just a few weeks ago we put out a deep dive report that really examines in more detail all of these issues that are at play. As you mentioned this week, there was sort of an acceleration moving this legal forward. And so first
what we had was Anthropic. This was a case that was brought by a group of authors claiming that by training Anthropics large language model claud on these publications, that that was copyright infringement. Now, there was a summary judgment hearing that was held in the spring, and on I believe it was Monday night, the judge in that case came out and found in favor of Anthropic.
On fair use.
Now, I think it's important to note that there are four fair use factors. Really, what courts are looking at are sort of factors, one which is looking at whether this was a transformative use. In factor four, which is whether or not the way that the defendant used the
content impacted the market for the original. So the judge in that case found in anthropics favor on both of those issues, but really focusing more on the transformative use side, saying this was highly transformative and sort of waved away the market harm issue. Then we had last night in the Meta case, and this was also a case it was brought by another group of authors challenging Meta's development
of its own large language model Lama now Here. Although the court did again find in favor of Meta, he focused really a lot of attention on this potential market harm aspect, on the fourth factor, and he made it very clear that this was a ruling in metas favor, not necessarily because the overall law the landscape for use it self dictates that, like he said, the evidentiary record
before him was not showing any impacts of mark harm. However, he sort of went to grow the great lengths to say that this might be an outlier overall in terms of these AI copyright cases, and if there had been a better record of market harm that this would go differently. So I think the broad takeaway is that this is a positive development for AI firms, at least in terms
of whether inputs used to train large language models were infringing. However, I don't think it was quite a resounding victory that those firms would have been looking.
For somewhat of a victory for this, and that it sounds like the judge in the medic case sort of gave a like a playbook for future plaintiffs to potentially prevail.
Yeah, he really did, and it was quite interesting to see him do that. He really took quite a bit of issue with sort of the lack of evidence on this in this case about potential market harm, and I think what he was really concerned about was whether or not the proliferation of AI generator materials could down the
line be rode demand for those original content works. And he sort of explicitly said that maybe you're not going to see that in something like fiction works, where people might not be turning to a fiction book that was written by AI firm. However, he's had in other instances something like news paper reporting also sort of photographic imagery, where there might be a much stronger case for market harm.
So I think we'll get the There are other cases that do alleged things closer along those lines, and I think if this judge's reasoning has followed, then those firms might have a much more difficult time getting somewhere in judgement on fair use, especially with respect to market impact.
Yeah, and in this case against Meta, is that is that the case for Sarah Silverman's one of the planiffs.
She is, well, she's one of the planeffs. In an interview, they've also sued I believe Google. Certainly they've sued open Ai. So yes, a lot of authors sort of had joined together on this and teamed up to follows a lot of the lms.
And do you think the planeffs in the case against Mata are they gonna have another shot to bolster their record, to maybe show some of the facts that the judge said they needed to show.
I'm not sure if on this they are.
However, the case isn't actually over because specifically summary judgment was only on the reproduction of their works. That is, when when the Large Language Model reproduced the works to train. There's actually another issue where Meta sort of admittedly turned to BitTorrent to get a lot of these books, and is sue there was whether they subjected those books that they downloaded to BitTorrent.
In doing that process, you can subject those works to other people who might be engaging in BitTorrent.
So I think there's still going to be a potential distribution claim, and he's going to hold a hearing later in the summer.
I believe, to decide what to do with that. I think it's relatively likely that he.
May allow this to be appealed as it is, and I also think there's a potential that we might have a quick appeal of that anthropic case. Both of they're more in different courts, but both we'll go up to the Ninth Circuit.
Right yeah, they're both in the Northern District of California, right yeah, yeah, yeah, And just give us a flavor, I mean, and I know you sort of quantified this in your research decks. Give us a flavor of how much does at stake here?
I mean, truthfully, it's potentially trillions of dollars and the reason for that sort of eye popping number that we're highly unlikely to see, but just because statutory images under the US Copyright Act can be up to one hundred and fifty thousand dollars per copyrighted work, and in the sort of anthropic case alone, we know that they also turned a bit torrent, and the allegation was that they downloaded as many as seven million books to that BitTorrent,
So if you add statute or damages across all of that, you could get really eye popping numbers. These are sort of just related to inputs, and again, I think both of these cases found fair use on inputs. I think it's going to be a much more challenging issue when you're looking at outputs. This is when a generative AI producer's output that more closely mimics what it trained on. I think that might be not only a reproduction, but a potential distribution.
And we have later cases that are going to test that.
I think both of if you read both of these decisions, they make it clear that if outputs were alleged in these cases and they weren't, that it would have been a much different outcome on fair use. So I think we're going to be paying a lot more attention to how.
That's going to develop.
One of the major cases that's going to be testing that is the New York Times first Open AI and Microsoft case. It's being litigated in New York, but that's gonna be quite a bit more delayed in terms of this, just because you have so many different more parties are litigating that one.
Such an interesting issue and sounds like it's going to play out for a while. I guess just given how many different cases there are, and you mentioned your deep dive earlier, I just want to plug that again for our listeners. This is Talent's really put out a comprehensive, very comprehensive report covering all these issues that he's talking about.
You can get a hard copy version, just reach out to us if you're interested, and then if you're a terminal subscriber, there's a report as well on the terminal. All right, Talent, thank you so much. Speaking of deep dives, let's turn to Jen ree are one of our anti trust gurus here, because Jen is also working on a deep dive related to antitrust enforcement under the Trump administration
and what that looks like. So Jen, why don't you you come in and maybe give us a sense of you know, what you are writing in your report about what we know so far in terms of anti trust enforcement under President Trump.
Yeah, thanks, Elliott.
I mean this has really been the subject of a lot of speculation because, you know, stepping back, you know, antitrust for many many years was really predictable I mean really, particularly with respect to how mergers and acquisitions that need to be filed with the government in reviewed, the way
they would be treated. It's kind of been the same and the same changes since nineteen seventies, since the nineteen seventies, and you know, we would expect when a new administration would come in there would be slight changes a matter of degree. The Republicans tended to be a little bit more business friendly in certain ways to deal treatment, and the Democrats tended to be just slightly tougher, but again
a matter of degree. Everybody kind of knew what the play of the land was and how things were going to go, and that all change changed. And that's why we've been watching so carefully what's going to happen with Trump's because it all changed when Biden was elected president and he put in place enforcers that were really on
a mission. They wanted to revitalize antitrust enforcement. They really thought big was bad, they didn't like deals in combinations, and they wanted to do whatever they could to slow consolidation.
And I think that after Trump was elected in the fourth quarter of twenty twenty four, there was kind of a reaction of glee for you know, those interested in deal making because of this expectation, well, everything was going to go back to the way that it was before Biden, and now we're going to get predictability again, and these deals are going to go through. And honestly, you know, we took the position here that that's probably not the case,
that it's still going to be sort of heightened. There's still going to be this heightened level of aggression. And we saw that President Trump appointed people who are professed economic populists, right, so they are a little bit different than some of the Republicans of old that have run the Trade Commission and Department of Justice, and so we've been watching carefully to see what they're going to do
with deal making. And now we've got a few months of track record, right, so we're watching to see what they're going to do. It's been very unclear based on their speeches and what they've said, Hey, we're going to continue to be aggressive. But I am beginning to see some of the pathways opening up to deals getting done, and I think that's going to be you know, all of those companies out there looking have a lot of money, looking to do a combination are going to be very
happy about it. And what that is is a renewed acceptance of remedies to resolve otherwise problematic deals. So when I'm talking about remedies, when merging companies come together, let's say they have one product line, they each have the same product line, they compete, they're going to bring those product lines together in a concentrated market. So even for that one product line, and let's say they have thirty product lines, you're going to have a problematic anti trust issue.
So what with a remedy. You can sell off that one product line, remove that overlap, and then get the bigger underlying deal closed, get rid of the bad part, hold on to what's good about the deal, and let it go forward. And likewise, if they don't compete, but they're vertically related and the merger would result in vertical integration.
And if the deal raises a concern that companies that come together like that could foreclose their rivals because they secure a needed input for their rivals, so long as they made a commitment that they'd make that input available on a non discriminatory, fair and reasonable basis, they could
usually get the deals closed. So the vast majority of deals that raised antitrust problems for many, many many years closed during the Biden administration, though instead the vast majority either got student court or were abandoned or this is what they really wanted. Deals didn't get signed to begin with because the companies realized this is going to be a tough road. We don't have the time, we can't do it. Deals can't really last the long road of
litigation in most cases. So we had this huge spike and abandoned deals. But what we've seen now is that President Trump's FDC and DJ have cleared with remedies for deals in the last two months. That is more than occurred under the Biden administration in his last two years.
And for three of those deals there were divestitures.
That was Synopsis Ansis Key Sites Byront and Saffron, which acquired some assets from RTX formerly Raytheon.
After litigation has already been commenced. This is in lieu of litigation.
So it's in lieu of litigation.
I think sometimes there's confusion, to be honest, because a complaint has to be filed in order for it to be settled.
There's a settlement.
So what happens is the agencies file a complaint, but simultaneously with that complaint, they file a settlement what's called a consent agreement, which shows what the companies agreed to do that allowed them to settle this complaint. It's interesting that you say that because the ones that were settled under Biden actually went into litigation. They've got sued, they started the litigation, they might have even gotten into trial.
I think the FDC or DJ whoever it was that was responsible was reading the tea leaps seeing they probably weren't going to win, and ended up settling mid litigation. But these are pre litigation settlements simultaneous is with the complaint. And the interesting thing too, is that there was one
other deal that was cleared with the behavioral commitment. That was Omnicom, Interpublic, two huge ad agencies, which was a particular interesting circumstance because these enforcers have said that they don't like behavioral commitments, but they went ahead and accepted
that one. So we're getting to it's a pretty significant rollback, in my mind, slightly back to that more conventional approach, because it does allow a way for deals that might raise some minor problems or problems with pieces of their business to actually have a way to convince the agencies
to let them get the deal closed. And I think that there are many factors in the economy that caused deal making to pause, such as inflation and tariffs and interest rates and things like that, but antitrust has also been a contributor, and I think that's going to sort of fall to the wayside Aside from that, you know, we're still reading the tea leaves with respect to how aggressive they're going to be, And we have a bunch of pretty interesting deals that are pending, like Google Whiz,
which will be a really good one to watch because these agencies have said we're going to be really tough on big tech platforms. But I really don't think the facts in that case support any theory of harm that would hold up in court. So we'll have to see what happens there.
Remind us what Whiz is.
So Whiz is cloud security, cybersecurity and the cloud. So you have a Google which has a cloud, have cloud business, and then you have their buying cybersecurity for that cloud, and Whiz right now is free to be used by any cloud company, any.
Company that has a cloud business.
But then they will be again, it's, as I said, Google is going to be taking on the ownership of an input needed by some of its competitors, and so there's always that possibility of foreclosure. But the reason I say there's not really a good theory here is because usually that kind of harm can only occur when the company has market power in one or in both of
the markets that we're talking about. And Google is third buy and has a less than twenty percent share in the cloud market, and wiz has a lot of big competitors in cybersecurity, and so when there are a lot of other options out there in the market, they usually don't have the ability to do something that would harm the market.
Interesting at Google's thurn, who are the top two?
Amazon and Microsoft?
Yeah, yeah, that makes sense.
And okay, what other interesting deals are you watching?
Right?
So you mentioned well the other the other deals really interesting Dick's foot locker.
Which is you know, Weekend.
Yeah, everybody knows those companies, So not for myself, that's going to be an interesting one. I do think they're probably going to have to divest some stores, but as I said, under Biden, that wouldn't have been an option for them. But under Trumpet looks like that will be an option. So, you know, this is one of those things where if this deal had been struck during the Biden administration, I would have said, I don't think it
can get closed without litigation. But today I'm saying I do think it can get closed if they're willing to invest the stores that need to be sold.
Charter Cox cable companies. That's another big one.
It's going to be interesting to see if the agencies acknowledge the way the industry changed with respect to how people view view content, video content and the way they can access it. You know, we have five G now, which we didn't have in the past when broadband companies came together. We have Getty Images, shutter Stock they supply stock photographs, but they're the two really Biggies and Disney Fubo.
Which is really interesting.
So, and we had mars Kelenova, which I've been writing about in the FTC cleared that last night. Oh really yeah, chocolate company buying prinkles.
I know.
The European Union actually just opened up an in depth investigation for that one. The Commission is concerned about something called portfolio effects, which we do not think is a viable theory here in the US. But they're worried that the company is going to have too many must have products and it will give them leverage because they'll have that big bundle and they can engage in like full
line forcing for the supermarkets that buy the products. But it's interesting to me that they think that, you know, Pringles is a must have product or grain bars or kind bars, which are the products that these companies own. Obviously Mars, we all know owns a lot of chocolate and candy.
And just one last question, are you I know, like in the monopolization cases, there are some differences between the industries and it seems like they're more aggressive against tech, but maybe less AGGRESSI against other industries. Are you seeing anything some like that in the M and A space, Well not yet.
I mean I sort of suspect that we will, but we haven't yet. And I say that because I do think that there could be some political influence, more so than in the past, on the outcome of these deals. I say that because we saw it during Trump's first term where it seemed that it deals he took a particular interest in that he wanted to get cleared. He pushed his regulators to clear them, and the deals that he wanted to have blocked, he pushed the officials to
try to block them. And so I think if you have companies that he are his favorites or donated a lot of money or something, and he wants their deal cleared, you'll push for that. And if we see companies that are engaging in M and A that are not his favored industries or companies, then maybe he'll push them to block it.
We'll have to see what happens there.
That makes sense. I mean, it doesn't really make sense, but yeah, but I think that's probably a fair assessment. All right, Cool, So you're just again for listeners, look out for a deep dive report that Jenre and Justin Taresi, who we're going to talk to in a second, are putting out on all this, on all things anti trust under the Trump administration. But if you are a terminal subscriber, there's already a version on the terminal that you can read, and if you can't find it, just reach out to
any of us. All right, thanks, Jen, Justin, let's bring you in. We're going to stick with anti trust, but switch industries, switch sectors, to pharma. Here, you're following a case by CBS and signa express Scripts challenging in Arkansas law that would ban operators of PBMs pharmacy benefit managers from holding pharmacy licenses. Hopefully I got that all right, but you'll correct me if I'm wrong. Come in, tell us what this case is about in why it matters?
Yeah, you bet, thanks Elliott.
And you know so easy to follow a discussion of snack foods with a discussion of pharmacy benefit managers.
So try to bear with me, folks.
But in a nutshell, what's happened here is just in April of this year, Sarah Huckapee Sanders, a governor of Arkansas, signed into law the first of its kind, first of its kind bill across the nation.
And what it would do, basically.
Is prevent any company with a direct or indirect interest in a pharmacy benefit manager from being issued a pharmacy license in the state of Arkansas.
Well what does that mean?
So we're talking about folks like CVS, who operates those brick and mortar retail locations that most of us are familiar with. They also operate mail order pharmacies sick as express Scripts operates a mail order pharmacy, many of which do business with the federal government through other trycare or other kinds of employee benefit programs. There and then there's also United Health often which operates a mail order service as well, so making these companies also operate large PBMs.
They are the largest three PBM operators in the United States today, having over eighty six percent of the actual market share in that space from what I believe combined.
So what this does though, is it basically if it polled licenses from pharmacy licenses from folks who operate a PBM, what that would mean was that would be the closure of CVS physical retail locations within the state of Arkansas, and also would apply to mail order services coming into the state as well, so these PBMs would be these companies would be prevented from operating any pharmacy services within
the state. The argument behind the law is that, look, what this is really doing is these companies who operate the PBMs are funneling or steering business into their own pharmacies and away from local independent pharmacies, cutting off their ability to survive. No surprise here, the law assigned in April it's it's set to take effect in January, but there are significant lawsuits with a significant number of issues that have been filed to halt implementation of that law.
A bunch of different grounds here, one being a dormant commerce clause, one being their Privileges and Immunities clause. Like all all this really scintilating constitutional law. But I think at the end of the day, what's most applicable here probably is this really evolving case law right now around federal preemption for ARISA plans, for Medicare plans, and for Tricare the Militaries Pharmacy plan for service members and former service members. So why is that important or why is
that what's really relevant here? The statutes are really broad with their federal preemption powers, and basically, whenever anything starts to touch the design of plans that operate under Medicare or Tricare, then it's preempted under federal law. Here, the question is does this actually touch that issue of plan design, right?
And I think probably it does.
But there's really avolving precedent here too, And really what it would do is it would restrict who these folks could contract with and providing their services under the plants. I think that probably crosses the threshold throw the necessary threshold for it to become an interference with the plan of the design of the planet itself. Other arguments though, too,
and one other wrinkle to point out here. You know, I don't think the legislature in Arkansas necessarily did itself any favors with some of the history that I've read in coming about to pass the bill. But they did include an exception for pharmacy employers who operate at PPM only for the benefit of their own employees. I know that's a mouthful, but you know they're exempted from this law.
And what that does basically is it exempts Walmart, the largest corporation in Arkansas that also operates pharmacies, from coverage under the statute. So they'd still be able to operate their pharmacies from a retail perspective even though they operate at PBM, but only for their employees. It is, it is, and you can imagine that that's what folks are screaming about and all of the complaints that have been filed
against the law. However, there's a couple of wrinkles here though, and I don't think that's necessarily the issue that's going to carry water the way folks think it's going to. It's not just Walmart that would be exempted. There is a grocery store called Harps, for example, which would also be exempted.
Under the law.
And also, you know, there are all of these other mail order pharmacies who have business coming from out of state who don't operate a PBM, and the statute does nothing on its face to stop them from joining business in Arkansas. So you've got folks like Amazon Pharmacy, even does a substantial amount of business in all fifty states now, don't operate a PBM, so they would likely.
Be exempted as well. And you've got Walgreens right who.
Operates, so it's physical retail locations too, but they don't own a PBM. So I think again that those physical locations are fine. The whole argument that is just to protect in state interest really has a hard time carrying water when you have facts I like that standing in the face of the law.
That's interesting on the federal preem SERSU has the federal government weighed in on that at all.
Not in this case, but they have went in another case right now that that's been filed with the Supreme Court for Sircherai right, and it's been conference now. I think we're tended to its third conference today June twenty sixth,
after the federal government filed position in that case. And what happened there is the Tenth Circuit struck down an Oklahoma law that kind of dealt with certain aspects of how a PBM does business, basically requiring PBMs to open up, you know, their their plans to any willing pharmacies or pharmacies they might not want to include as part of
their preferred their preferred networks. That the Tenth Circuit struck down that law in Oklahoma as saying that that actually was a preemption issue in terms of ARISA and medicare. There seems to be some disagreement with us obviously, some interest in the court here to hear the case. They've conferenced it so many times. The federal government says, no, that's actually should not have been upheld. You know, it's fine to toss it away because it does have this
preemption issue going on. But those issues there are part and part of what the we're seeing in this case in Arkansas.
I think so if.
The Supreme Court does take the case, everything, that really could have a huge impact on the direction of the litigation there in Arkansas.
Oh interesting, So is that what you're looking for next or is there some other catalysts you're watching in the Arkansas case?
So I think that's the biggest one, you know, and we might know by Monday even whether or not the Supreme Court will plan to take that case, you know, in the coming term, So that that's one catalyst, you know.
I think, you know.
It's likely that we're going to see a preliminitary injunction at least issued with regard to the Arkansas Statute. I think there's just too much on the table, and there is you know, may perhaps not a high likelihood that these companies would win, but a likelihood for sure. Right, So I think that all being what it is, we're likely to see a preliminary injunction issue before the law can go into effect, probably sometime this fall, you know, but we've got years ahead here, I think for how
this ultimately plays out. This certainly is not an issue that's going to be designed at the district court level and finality, and.
Just one last question, are do you expect other states to pass similar laws.
I do, and I think, you know, obviously what happens in Arkansas is going to be influential. What happens at the Supreme Court, whether or not they take this case, the Mulready case, is going to be influential. But just just last month or this month actually in Louisiana, at the close of their legislative session, there was a huge push to pass a similar bill in Louisiana. Donald Trump Junior gun involved on Twitter and advocated for the passage
of that legislation. CVS CBS Health is actually now accused of texting its customers within the state to encourage their state legislators to vote no on the bill. And you know, whether or not that actually happened, that's that is up for debate. But Louisiana Attorney General has actually filed suit against CVS for a violation of privacy, privacy laws and all these other things. Now, you know, I was saying, hey, you can't do that, that's not the reason you collected those phone numbers for.
So there's a lot rolling out, you know, I.
Think Louisiana, there there's talk of a special session even to pass legislation that would do the same there.
I think likely it spreads. It's a hot button issue.
Everybody seems to want to do something about PBMs, but the one actor who probably should and has the power to Congress, has yet to do so.
Shocking. All right, good stuff, thanks justin. All right, let's bring in Matt Sentenhelm. We're gonna pivot back to TMT. I guess in some ways, so Matt. Last week, the Senate confirmed President Trump's Republican nominee to the FCC, Olivia Trustee. Great last name. I know you've been tracking the potential for major changes to broadcast regulation. You know, just give us the brief overview of where things stand now.
Yeah, that's right, Elliott.
The Senate confirmed trustee on June eighteenth, and as a result of that move, Republicans now have an advantage. There's a two to one advantage at the FCC. Brendan Carr and Olivia Trustee are the two Republicans. There's one Democrat, Ana Gomez. So that frees up Republicans to move ahead with some of the more aggressive moves that they couldn't do when the f CC was evenly split. The FCC requires three members to have a quorum, so they have three,
and so pretty much they're good to go now. And so one of the most significant issues to watch, I think for investors in the space are people that watch TV and radio broadcast companies. The FCC's had media ownership limit dating from the nineteen seventies that limit how many stations these companies can own. They're very different from the environment faced by new media companies like internet platforms or
streaming platforms. They offer very similar services, they don't face any of this regulation, and so Republicans have been calling for years for an easing or an elimination of those rules for the traditional broadcasters. I think it may now
get done in a significant way. And so the same day the Senate confirmed Olivia Trusty, the FCC put out a public notice on this issue for TV broadcasters and it said, we'd like to refresh our record on this rule making about the rule that limits how many TV stations a company can own right now, the rule says you can only reach thirty nine percent of US households, subject to a discount and a little tinkering around the edges, but it's a significant limit on how many stations one
company how many households one company can reach, how many stations they can own effectively. NAB National Association of Broadcasters has asked the FCC scrap.
That rule, get rid of it, no limit.
And so what that means for companies like Nextstar, Sinclair Tegna is that while they're limited now to only reaching a small fraction of US households, after this change is adopted, they could reach every US household In theory, it's a huge change, enormous economies of scale, opportunities to buy up stations across the country if this goes ahead. And as I said, two to one, now Republicans are in the driver's seat and they can move ahead with this sort of sort of change.
And that give us a sense of the time. And I mean, how quickly you know is this going to happen? I assume they have to go through the normal rule making notice time.
Yeah, So in twenty seventeen they put out a notice of proposed rulemaking and never closed it. So they kind of took that initial step already. What they put out last week is a call for a refresh of the record on that old notice of proposed rulemaking. And so the timing there when you sketch out how long those comments will be filed, it takes you to about mid August. We're waiting for publication in the Federal Register, so a little little movement around the edges, but basically mid August
they'll be done with the record. Then it's just a question of how quickly car wants to call it for a commission vote. Typically you'd wait a couple of months well, you know, while you put together a final decision. He could move faster or slower on this, but I i'd ballpark October as a good good time to you.
Know, a reasonable target for this.
The FCC often acts that it's monthly meetings on these things, So October twenty eighth is the one to circle. And if that's correct, you want to really want to watch three weeks before it is when he'll release the agenda. So October seventh is what I'll be circling on my calendar as the date where you could see, you know, a major driver for companies like like Next Star, Sinclair Tegna.
That's pretty quick.
Yeah, that would be fast and so and and it's off in a good bet with the FCC that things take longer than you think so I might might be regretting that, but that's but I do think car wants to move quickly on this stuff. He seems to be aggressive on this front, so it seems reasonable. But the whole fourth quarter is a possibility. There there are monthly
meetings in November and December. It's also hosip he tries to do this outside of a monthly meeting that usually still takes thirty to forty days.
So fourth quarter is likely, I.
Think to see action, then you're gonna have litigation over it going into next step.
That was going to be my nice question. Do you expect anyone to see Yeah?
Absolutely.
There's a big question about whether only Congress can change that thirty nine percent limit or whether the FCC can do it. And that's really what stemy the FCC in twenty eighteen. The Republicans couldn't agree on this, and so there's there's inevitably going to be a big fight over that. I think the FCC can win it and say that the FCC has the power to change the rule itself, but it might who who would see So you're likely to see opposition from public interest groups on this who
defend these rules. You're likely to see opposition from the companies that sit across the table from broadcasters in negotiations about carriage of their station. So cable companies have to pay the broadcasters for distribution rights. And if the broadcasters are suddenly much bigger players, they have much more leverage over the distributors, and so the cable companies, you know, resist these changes in the rules as much as they can.
So there's definitely going to be oppositioned from from different angles, and they're likely to file lawsuits.
Well, that'll be fun for you to cover after the rulemaking process gets completed. It's always fun to cover the litigation. All right, Matt, good stuff.
Thank you.
All right, I think we're gonna leave it there. We'll wrap up this episode of Votes and Verdicts. As always, thank you for listening, and also, as always, if you have any questions about anything that we discussed on this episode, please do not hesitate to reach out to any of us at you're convenience with questions. As a reminder, you can find all of our research on the Bloomberg terminal at big or on our litigation and policy dashboard at
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