Michael Kratsios, Set to Drive AI Policy at OSTP, Scheduled for Confirmation Hearing

The Federal Communications Commission (FCC), with new FCC Chairman Brendan Carr at the helm, will be holding the agency’s first Open Meeting on Thursday, February 27 from 10:30 a.m. – 12:30 p.m. ET amidst uncertainties related to independent agencies and presidential power as reflected in a recent Executive Order. The FCC has released an agenda for the meeting, which is available here, along with public drafts of the five new items that will be up for consideration by the FCC:

This Tuesday, Michael Kratsios, who is President Donald Trump’s nominee for Director of the White House Office of Science and Technology Policy (OSTP), will appear before the Senate Commerce Committee for a hearing. During President Trump’s first term, Kratsios served as the chief technology officer for OSTP, a position he was confirmed to with unanimous Senate support. In his prior stint with the administration, Kratsios heavily focused on artificial intelligence (AI) policy, establishing the American AI Initiative and the National AI Initiative Office. Kratsios also supported the White House push to integrate drones in the National Airspace System, and was key in implementing a presidential memorandum in 2017 establishing the Unmanned Aircraft Systems Integration Pilot Program. Since leaving office in 2021, Kratsios has been at Scale AI, a data management company.

President Trump’s Executive Order (EO) titled, “Restoring Freedom of Speech and Ending Federal Censorship” is the administration’s first step to pursue the President’s content moderation goals for broadcast outlets and social media. President Trump has made clear his view that fact-checking by online platforms and broadcasters interferes with free speech. The purpose of this Executive Order is set forth in Section 1:

Under Commissioner Brendan Carr’s leadership, the Federal Communications Commission (FCC) will likely focus on expediting the review and approval process for applications to launch new satellites.

The U.S. Court of Appeals for the 6th Circuit heard oral arguments on a challenge to the Federal Communications Commission’s (FCC) net neutrality rules, which reclassified broadband Internet access services under Title II of the Communications Act, on October 31. The court has already issued a stay of the rules’ effectiveness pending its decision on the merits, citing the “major question” doctrine. The rules, originally adopted under Obama-era FCC Chairman Tom Wheeler, later repealed by Trump-appointed FCC Chairman Ajit Pai, and readopted under current FCC Chairwoman Jessica Rosenworcel, if upheld by the court or remanded to the agency for further action, will almost certainly be repealed under Commissioner Brendan Carr.

The new Trump administration will likely take a deregulatory approach to artificial intelligence (AI). President-elect Donald Trump has pledged to repeal President Joe Biden’s AI executive order, which imposed new reporting requirements on developers of advanced AI models and laid the groundwork for future rules. Scaled-back regulation could be paired with slashed research funding for AI.

Expect to see new entities added to the Federal Communications Commission’s (FCC) “Covered List” of communications equipment and services deemed to pose an unacceptable risk to the national security of the United States (U.S.) under a Republican-led FCC. Commissioner Brendan Carr has been particularly vocal on this issue, urging that the FCC “must do a better job of ensuring that its Covered List stays up to date and accounts for changes in corporate names and forms,” and suggesting that the new administration “should create a more regular and timely process for reviewing entities with ties to the Chinese Communist Party’s surveillance state.” Expect FCC staff to take a more proactive role in investigating companies for ties to prohibited entities, and working with other agencies focused on national security to add them to the Covered List. While the FCC has so far only banned Covered List companies from obtaining FCC authorizations, Commissioner Carr has proposed revoking the existing authorizations of Covered List companies. Additionally, Commissioner Carr could be expected to prohibit U.S. providers from interconnecting with Covered List companies, in order to prevent those companies from continuing to offer service on a private, unregulated basis.

Under Republican administrations, the Federal Communications Commission (FCC) has historically taken a more permissive approach to approving mergers and acquisitions (M&A) transactions involving companies that hold FCC licenses and other authorizations. This pattern will likely continue under the new Trump administration, with quicker approvals for transactions and fewer conditions imposed by the FCC. This may be tempered by the new Team Telecom paradigm that recently took effect, however, which could lengthen the approval process for applications involving reportable foreign ownership. Under the new Team Telecom framework, applications that involve International Section 214 authority to provide international telecommunications service or submarine landing licenses are now referred to the Committee for the Assessment of Foreign Participation in the United States (CFIUS) Telecommunications Services Sector if an applicant has 10% or greater direct or indirect foreign investment. Applications to exceed the FCC’s statutory foreign ownership benchmarks, which are codified at Section 310 of the Communications Act, are also referred to the CFIUS. Applicants must complete a standardized set of questions when filing an application, and a 120-day review period commences once CFIUS determines that the applicant’s responses are complete, during which time FCC action is deferred. This timeline may be extended by an additional 90 days at the CFIUS’s discretion. In one recent example, the Department of Justice (DOJ) requested that the FCC defer action on T-Mobile’s proposal to acquire parts of US Cellular until CFIUS can complete a review of the proposed transaction, citing potential national security and law enforcement concerns related to T-Mobile’s significant foreign ownership. This DOJ request is generally at odds with how the FCC has treated T-Mobile’s 100% foreign ownership in the past.