Legal market overview in United States
The development and deployment of wireless infrastructure has been a key theme in the telecoms market this year, with the move towards 5G wireless internet continuing apace, as well as the increasing demand for satellite backhaul networks to complement high-speed wireless broadband. In concert with the current infrastructure push, there has been a robust conversation surrounding wireless spectrum recently, including various proposed changes to C-band and millimeter wave (mMW) spectrum usage. On the transactional side, the wireless market has seen one of its biggest shakeups in recent years, with the announced acquisition of T-Mobile by Sprint — a deal that will change the face of the US wireless market.
Wireless backhaul is far from the only issue currently at play in the satellite sector, with several major players either entering or looking to expand their presence in the Non-Geostationary Orbit (NGSO) market, such as OneWeb, Boeing and SES. Launch services agreements remain a key area of work for satellite-focused firms, especially given the high volume of satellites required for current NGSO projects. Since satellite companies often operate on a global scale, cross-border regulatory work such as representation before the International Telecommunications Union (ITU) has become an important issue for firms handling work for satellite clients.
In a similar vein, firms undertaking work for foreign clients, or companies dealing with foreign clients, have had to adapt to the Trump administration's increased focus on national security issues, with many reporting that the approval processes before the Council on Foreign Investments in the United States (CFIUS) and the multi-agency panel Team Telecom (TT) have become more rigorous in recent times. The controversy surrounding the Restoring Internet Freedom Order, which repealed net neutrality rules and is probably the administration's best-known telecoms policy, has refused to abate in the last year, with a DC circuit appeals case ongoing at the time of writing.
The broadcast market is also undergoing some significant changes, with top-level consolidation underway alongside the myriad local market reorganizations arising out of the FCC's incentive auction. Perhaps the most headline-grabbing transactions have been Walt Disney's proposed acquisition of 21st Century Fox, and its various connected spin-offs and divestments, but Nexstar, Discovery Communications, and Meredith have also been involved in high-profile deals.
The telecoms and broadcast sectors looked to be off to a slow start in 2019 following the suspension of FCC operations during the government shutdown, and it remains to be seen how much of an effect the resultant backlog will have on matters due before the commission in 2019, though many in the field are predicting few significant consequences to the commission's dry January.
The legal market, has remained relatively stable in the last twelve months, with comparatively few high-profile moves as compared to recent years. Notable firms include Latham & Watkins LLP and Hogan Lovells US LLP for their one-stop practices, Jones Day and Milbank for their satellite expertise, and Debevoise & Plimpton LLP and Cravath, Swaine & Moore LLP for their transactional work.
Looking to the tech space, fintech continues to transform and disrupt the financial services industry in the US and globally. Given the attractiveness of startups in the sector, established fintech players have continued to evolve and innovate, and banks and other financial institutions have been compelled to embrace a culture of collaboration in the financial services industry.
The sale of digital tokens in ICOs had in previous years been a particularly active area; however, this has largely subsided following the SEC’s regulatory clarification that these can constitute securities, and be subject to US securities law. This has sparked a series of SEC investigations and enforcement actions against fintech players alleging registration violations, as well as prompting the need for further clarification from state and federal regulators.
Even beyond securities law, the lack of cohesive regulation for fintechs in the US makes the market a difficult area to navigate, with companies being subject to a series of overlapping authorities, fragmented across state and federal levels. Data protection and cybersecurity are key areas of concern, with compliance advice surrounding GDPR and the upcoming California Consumer Privacy Act (CCPA) being a focus for many firms.
Although the cryptocurrency bubble has arguably burst, or at least largely deflated — with 2018 seeing the value of popular coins plummet — blockchain and distributed ledger technology (DLT) continues to be at the forefront of fintech development. DLT in particular is a hot topic in the sector and forms the basis of many products and solutions, with uses ranging from smart contracts and trading platforms to payment solutions and alternative lending. The interest in artificial intelligence and exploration around its uses in the financial sector is also noteworthy, with the development of robo-advisors predicted to become an area of increased focus over the next 12 months. Other key areas of development under the fintech umbrella include the growth of evermore sophisticated InsurTech and RegTech products.
Fintech, biotech, and energy technology are of course major generators of high-value work, but given the ubiquity of integrated technologies across industry sectors and in our day-to-days, cybersecurity and data privacy have become increasingly salient issues for businesses, which have been facing hacking threats and cyber-attacks of unprecedented intensity and sophistication. For this reason, lawyers have been busy with advising and training companies’ boards and CEOs on breach preparation, prevention and response. Attention is also being drawn to the regulatory aspects of data privacy and data protection, particularly with respect to the EU GDPR. Domestically, the California Consumer Privacy Act (CCPA), which will become effective from January 2020, holds any company of a certain size that does business in California accountable and responsible for the safety of consumers’ personal information. On the contentious side, the main area of activity for lawyers has been litigation of class actions that follow notifications of security breaches. Assistance with the Federal Trade Commission (FTC)’s investigations and enforcement is another service in high demand. Practices have been assembling specialised teams in order to live up to the challenges of cybersecurity and privacy work. In particular, Orrick, Herrington & Sutcliffe LLP and Cooley LLP have been significantly strengthening their profiles with new arrivals from the legal and institutional world. The market is led by practices with large international networks like Baker McKenzie LLP and Hogan Lovells US LLP, as well as by more US-centric outfits such as Hunton Andrews Kurth LLP and Morrison & Foerster LLP.