DOJ and FCC Defend Digital Discrimination Rules to Eighth Circuit

WASHINGTON, June 24, 2024 – The Justice Department and the Federal Communications Commission defended the agency’s digital discrimination rules in a Friday filing with the Eighth Circuit Court of Appeals in St. Louis.

As mandated by the Infrastructure Act of 2021, the FCC adopted in November rules aimed at preventing gaps in broadband access based on race, ethnicity, income level, and other characteristics – known as digital discrimination. Equal access was defined in the statute as the ability to subscribe to comparable service at comparable rates within a given area.

The rules opted for a “disparate impact” standard as a method for identifying digital discrimination, meaning broadband providers and other entities that facilitate broadband access could be in violation of the rules even if they are not intentionally withholding quality internet from a protected group.

The major broadband industry groups were quick to take the agency to court, alleging among other things that the statute only calls for preventing intentionally discriminatory practices.

The Justice Department and the FCC said the law - section 60506 of the Infrastructure Investment and Jobs Act of 2021 - actually required a disparate impact interpretation.

“Congress directed the FCC to ‘adopt final rules to facilitate equal access,’ including rules ‘preventing digital discrimination of access,’” the government wrote in the filing. “To fulfill that broad mandate, the FCC has determined that its rules must encompass business practices with unjustified discriminatory effects on access to broadband service,” as opposed to just those with discriminatory intent.

Intentional discrimination, broadband providers pointed out during the agency’s rulemaking process, has almost never occurred in broadband deployments. In the agency’s view, targeting just intentional practices would render the law ineffectual.

“Accordingly, restricting the reading of digital discrimination ‘to conduct motivated by discriminatory intent would not fully accomplish’ Congress’s mandate ‘to facilitate equal access to broadband service and prevent discrimination,’” the Justice Department and the FCC wrote, quoting the adopted digital discrimination rules. “The FCC concluded that it must ‘adopt rules that address the problems that do exist rather than those that do not.’”

When evaluating claims of discrimination, the Infrastructure Act required the FCC to take into account the “technical or economic feasibility” of offering comparable services and rates to a given area. But that hasn’t convinced trade groups that the agency will avoid levying penalties for routine business practices.

The rules went into effect on March 22 but do not enter enforcement until September 22. Oral arguments in the challenge before the Eighth Circuit were tentatively scheduled for the same week in September.

Two consumer advocacy groups filed their own challenge to the agency’s rules, on the basis that they should have stood up a more formal complaint process. The government pushed back on this claim as well, arguing the agency’s informal process is best while it “gains experience” investigating a new kind of complaint.

Participants in the Biden administration’s $42.5-billion broadband expansion effort, known as BEAD, or the FCC’s Universal Service Fund subsidy will enjoy a “presumption of compliance” with the digital discrimination rules. Those programs have nondiscrimination rules of their own, the FCC noted in its adopted rules.

The consumer advocate petitioners – Media Alliance and Great Public Schools Now, as well as the Benton Institute for Broadband and Society – have also challenged the exemption on the grounds the FCC did not give interested parties enough notice that it was considering the presumption decision and that the agency failed to justify it.

The government responded Friday that “it was reasonable for the FCC to establish a presumption — subject to contrary evidence — of compliance with its digital-discrimination rules based on a broadband provider’s compliance with the independent non-discrimination requirements imposed by the BEAD program, which cover the same ground.”