Industry Pushes Back on FCC Digital Discrimination Rules as ‘Rate Regulation’

WASHINGTON, November 7, 2023 – Broadband providers and industry groups are pushing the Federal Communications Commission to change course on proposed digital discrimination rules.

The Infrastructure Act requires the FCC to adopt rules promoting equal broadband service for a given provider’s subscribers. That includes preventing differences in access based on race, income level, religion, and other categories – known as digital discrimination.

FCC Chairwoman Jessica Rosenworcel said in October that the commission is considering a ‘disparate impact’ standard for identifying that discrimination, meaning broadband providers could be in violation of the rules even if they are not intentionally withholding quality internet from a protected group.

The U.S. Chamber of Commerce, AT&T, Verizon, and trade groups representing broadband companies met with commission staff last week to voice concerns about that standard and other parts of the proposed rules.

In the months before the FCC announced the proposal, industry groups argued that a disparate impact standard is too broad and would result in companies being sanctioned for routine business practices.

Despite the commission’s proposed rules rejecting that argument, industry groups reiterated the position last week. They also expanded their complaints to the factors the FCC is planning to consider when evaluating digital discrimination complaints, vague requirements, and the framework the commission proposed to use in making determinations.

The commission is proposing to include pricing in the scope of practices that could potentially be discriminatory. Its proposed digital discrimination order would require prices for similar levels of service to be comparable for different groups of consumers.

Chamber of Commerce calls FCC proposal ‘rate regulation by another name’

For the Chamber of Commerce, that would be “rate regulation by another name,” the group said in a Monday ex parte filing. Jordan Crenshaw, the vice president of the group’s Technology Engagement Center, argued that this oversteps the Infrastructure Act, which allows the commission to ensure “terms and conditions” are equitable, but does explicitly say that prices or rates are included.

A coalition of public interest groups like the National Urban League and Coalition for Black Civic Participation also met with commission staff last week. They supported the move, saying it will “have a positive impact in the communities we represent along with other marginalized communities in America.”

The group also pushed the commission to create an annual report on the digital discrimination complaints it receives and adjudicates.

Multiple industry commenters pointed to Inclusive Communities, a 2015 Supreme Court case related to disparate impact discrimination claims. They argued the commission’s rules would run afoul of that case’s precedent by opening up non-arbitrary business practices – those that further a material business interest – to scrutiny, and by allowing one-timer decisions to potentially be found to be discriminatory.

Those opposed to the rule have at least one ally on the commission. Commissioner Brendan Carr issued a lengthy statement against the move Monday, objecting to the broadening of FCC oversight.

The commission will vote on the proposed rules at its November 15 open meeting. That’s the deadline set by the Infrastructure Act for its digital discrimination rules to be adopted.