Political Pressure on the FCC and the Future of Media Valuations: A 2025 Investment Analysis

The Federal Communications Commission's (FCC) 2025 net neutrality defeat marks a pivotal moment in the regulatory history of the internet. On January 3, 2025, the U.S. Court of Appeals for the Sixth Circuit struck down the FCC's attempt to reinstate Obama-era net neutrality rules, citing the Supreme Court's Loper Bright Enterprises v. Raimondo decision, which curtailed agency deferenceNet neutrality is struck down by federal appeals court^[1]. This ruling not only invalidated the FCC's reclassification of broadband providers under Title II of the Communications Act but also shifted the regulatory burden to Congress and state legislaturesWhy the FCC’s Net Neutrality Rules Were Struck Down^[2]. For media conglomerates like Disney, Warner Bros. Discovery, and Netflix, the implications are profound: a fragmented regulatory environment, heightened operational risks, and uncertain investor sentiment.

The New Regulatory Landscape: Deregulation and Fragmentation

The Sixth Circuit's decision preserved the 2018 repeal of net neutrality, leaving the door open for internet service providers (ISPs) to prioritize traffic, charge content creators for faster delivery, or throttle servicesNet Neutrality Rules Struck Down by Appeals Court^[3]. While states like California and Washington have maintained their own net neutrality laws, the lack of a federal standard creates a patchwork of compliance requirements. For media companies, this means navigating divergent rules across jurisdictions, inflating legal and operational costsNet neutrality rules explained. Why a court struck them down^[4].

The FCC's “Delete, Delete, Delete” initiative under Chairman Brendan Carr has further accelerated deregulation, removing 41 rules deemed “utility-style burdens” on the internetCarr Eliminates Already Defunct Net Neutrality Regulations^[5]. While proponents argue this fosters innovation, critics warn it empowers ISPs to exploit market power, potentially stifling competition in streaming and content creationNet Neutrality Is At Risk Again, And The Free Market …^[6]. For instance, smaller platforms may struggle to pay for “fast lane” access, creating a competitive disadvantage for firms like Netflix or Disney+ compared to well-capitalized incumbentsHow the End of Net Neutrality Could Impact Your Business^[7].

Valuation Metrics and Investor Sentiment: A Tale of Two Narratives

The stock valuations of major media companies reflect the tension between regulatory uncertainty and strategic adaptation. As of September 2025, Disney's price-to-earnings (P/E) ratio stands at 18.40, down from a 12-month average of 28.71, signaling improved investor confidence amid cost-cutting measures and a strong slate of contentDisney PE Ratio 2010-2025 | DIS - Macrotrends^[8]. Warner Bros. Discovery, however, trades at a P/E of 39.53, reflecting lingering concerns over declining linear TV revenues and debt burdensWarner Bros Discovery PE Ratio 2010-2025 | WBD^[9]. Netflix, the sector's standout performer, commands a P/E of 51.23 and an EV/EBITDA multiple of 40.2x, underscoring its dominance in streaming and content innovationNetflix: current P/E Ratio^[10].

These divergent metrics highlight how regulatory risk interacts with corporate strategy. Disney's pivot to cost efficiency and blockbuster-driven content has insulated it from some regulatory headwinds, while Warner Bros. Discovery's restructuring efforts remain unproven. Netflix's pure-play streaming model, meanwhile, benefits from its ability to scale globally, though it faces rising content costs and potential ISP fees in a post-net neutrality worldMedia Stocks of 2024 The Rise of Netflix and the …^[11].

Political Pressures and Long-Term Outlook

The FCC's political polarization—exemplified by the contrasting views of outgoing Chair Jessica Rosenworcel and incoming Chair Brendan Carr—has amplified uncertainty. Rosenworcel's call for congressional action to codify net neutrality contrasts with Carr's deregulatory agenda, leaving media companies in a regulatory limboNet neutrality dealt a final defeat in a blow to Democrats^[12]. This dynamic is particularly relevant for investors: without federal clarity, state-level laws may become the de facto standard, but legal challenges and enforcement inconsistencies could persistConsolidation Alone Won’t Solve Media Challenges^[13].

For long-term investors, the key question is whether media companies can adapt to a world where ISPs wield greater control. Historical precedents suggest that deregulation often leads to consolidation, as seen in past mergers between telecom and media firmsWhy deregulation may not unlock media deals for …^[14]. However, the risk of market concentration—where a few ISPs dominate both content delivery and distribution—could undermine innovation and subscriber growth, ultimately affecting EBITDA margins and valuation multiplesTen Key Regulatory Challenges: 2025 Mid-Year Report^[15].

Conclusion: Navigating the Uncertain Terrain

The 2025 FCC rulings have reshaped the regulatory risk profile for media conglomerates. While deregulation may spur short-term cost savings for ISPs, the long-term impact on media valuations hinges on Congress's ability to legislate a unified framework. Until then, investors must weigh the potential for state-level fragmentation, rising operational costs, and the strategic agility of companies like Disney, Warner Bros., and Netflix. In this environment, transparency in corporate financial planning and proactive engagement with regulatory developments will be critical for sustaining investor confidence.