FCC Adopts Digital Discrimination Rules in 3-2 Vote

"Our rules would miss the mark if they cover just discriminatory intent because we would fall short of meeting our statutory obligation to facilitate equal access to broadband," said Chairwoman Jessica Rosenworcel: "I believe this approach puts us both on the right side of history and the right side of the law."

In a lengthy dissent, Commissioner Brendan Carr said the Biden administration's broadband agenda "can be boiled down to one single word, control." The digital equity framework "gives the FCC a nearly limitless power to veto private sector decisions," Carr said. The cost of building out internet infrastructure has "skyrocketed thanks to the Biden administration's inflationary policies," he said, adding the administration is "blaming the private sector and free-market capitalism" for its "own policy shortfalls."

Carr criticized several aspects of the order. The plan "allows the FCC to impose unfunded build mandates and unlimited monetary funds on every covered entity," he said, adding that it "sweeps entire industries within the FCC's jurisdiction for the first time in the agency's 90-year history." The FCC is also wrong to conclude that Congress provided it with "more expansive rate regulation authority through an implicit delegation," Carr said, adding adoption of these rules "sets up another headlong run in with the major questions doctrine." Commissioner Nathan Simington, also dissenting, said the rules will "place the commission in a permanently inquisitorial posture for every communications development or operation project in America."

Including disparate impact and intent in the definition of digital discrimination recognizes the "multifaceted nature of digital discrimination" and "is consistent with recent Supreme Court precedent," said Commissioner Geoffrey Starks. Not including disparate impact would otherwise make it "simply implausible" to "prevent and eliminate digital discrimination by solely addressing intentional discrimination," Starks said. He thanked Rosenworcel for accepting his request to seek comment on forming an Office of Civil Rights within the FCC and creating a safe harbor for ISPs receiving support through the Universal Service Fund and NTIA's broadband, equity, access and deployment program. "We must prioritize digital equity," said Commissioner Anna Gomez, and "that is exactly what we do here today." Gomez sought language in the final order that would create a "point person" in the Enforcement Bureau for digital discrimination issues and identify reporting mechanisms.

Democrats' Support

Rosenworcel pushed back Tuesday during a news conference on Capitol Hill against opponents who believe the FCC strayed too far from IIJA's statutory language. Senate Commerce Committee ranking member Ted Cruz of Texas and other Republicans warned Rosenworcel earlier this week that the then-draft rules didn’t hew to IIJA’s legislative intent (see 2311130059). Cruz repeated that claim Tuesday, saying the “only beneficiaries of this Orwellian ‘equity’ plan are overzealous government regulators who want to control the Internet.”

“The language in the law is broad, and we took meaningful steps today to prevent and eliminate discrimination,” Rosenworcel told reporters. “I'm confident going forward.” Congress told the FCC “to develop rules to facilitate equal access to broadband and prevent and eliminate digital discrimination,” she said: Congress “was very clear” in IIJA that we should prevent and eliminate digital discrimination,” but lawmakers “also thought we should be reasonable.” The FCC must “make sure that” if companies “wanted to defend their practices … [they] should be able to demonstrate that there was a genuine issue of technical or economic feasibility that led them to make that decision,” Rosenworcel said.

Senate Majority Leader Chuck Schumer of New York was among several congressional Democrats who praised the FCC’s action during the news conference. The FCC’s approval of the rules has “been a long time in coming” as a way of “making sure all Americans have access to high-speed internet,” Schumer said. The FCC heard “loud and clear” the call Democrats made for the commission to “adopt key principles such as disparate impact definition” in the rules “that are the core to the fight against digital discrimination.” The FCC “is making good on this mandate to make sure no one regardless of who they are, where they live, is shut out of the benefits of the digital age,” said House Commerce Committee member Rep. Yvette Clarke of New York.

Every American has “the same right to opportunity ... and you won't have that opportunity unless we make certain that you get the buildout in your communities,” said Senate Commerce member Sen. Peter Welch, D-Vt. “That's what this is about. And to suggest that there's any other agenda than opportunity for all Americans is essentially to cave in to a lot of the big companies that basically want to build out their property as opposed to the opportunity for every American.” Many “of my Republican colleagues represent rural communities, many more than Democrats, and they need to understand that this is an investment in their backyard and their districts,” said House Communications Subcommittee member Rep. Marc Veasey, D-Texas.

Mixed Response

The vote received a mixed response from industry and advocates. "The FCC has unfortunately chosen to move forward with highly controversial provisions of its digital-discrimination rulemaking," said Kristian Stout, International Center for Law and Economics director-innovation policy. "Such rules will have a host of unintended consequences, including introducing de facto rate regulation, which the FCC has historically eschewed," Stout said. The rules will be "counterproductive to closing the digital divide," said Joe Kane, Information Technology and Innovation Foundation director-broadband and spectrum policy. The FCC's decisions "go well beyond the scope of rules authorized by Congress."

Wednesday's order was "the most far-reaching unauthorized power grab in the history of the agency," said Free State Foundation President Randolph May. "It’s difficult to see how the agency will not get bogged down in years-long proceedings that resemble old-fashioned utility rate cases," May said. ACA Connects CEO Grant Spellmeyer said the FCC adopted a "poorly designed set of rules that will fundamentally undermine its own stated purpose." CTIA CEO Meredith Baker said the order "upends Congress’s carefully balanced framework, pursuing an approach that far exceeds the agency’s authority."

"We still need to see the final order as approved and in particular understand better its application to operations in deeply rural areas," said NTCA CEO Shirley Bloomfield: "As we review the order, we hope that the commission will be open to further discussions regarding the scope and implementation." Free Press Policy Director Joshua Stager said there's "mounting evidence that low-income families and people of color are more likely to live in monopoly service areas that have just one high-speed internet provider." Congress "was right to recognize these disparities when it gave the FCC the authority to enact today’s order," Stager added.

"The aggressive pushback from some telecommunications companies and their antiregulatory allies was hardly a surprise, and we can also expect them to take these rules to court," said Andrew Schwartzman, Benton Institute for Broadband & Society senior counselor: "The FCC and supporters of universal broadband stand ready to make sure these important rules are allowed to do what Congress intended."