Vacated – Eighth Circuit Tosses Out Rosenworcel’s Digital Discrimination Rules over Unlawful ‘Disparate Impact’ Standard

Court: A federal appeals court has thrown out the FCC’s digital discrimination rules, delivering a major setback to the Biden administration’s broadband‑equity agenda. When the rules were adopted in 2023, FCC Chairman Brendan Carr, then just a Commissioner in the GOP minority, warned that the Biden rules went far beyond what Congress had authorized in the Infrastructure Investment and Jobs Act of 2021 (IIJA). Taking 588 days since oral arguments to issue a ruling, a three‑judge panel of the U.S. Court of Appeals for the 8th Circuit — all Republican appointees — agreed with Carr, ruling Wednesday that the FCC exceeded its authority when it adopted a disparate‑impact standard to police discrimination in broadband deployment. Judge James B. Loken, writing for the unanimous panel, said the agency “exceeded its statutory authority … by adopting a final rule that authorized the imposition of disparate impact liability and defined the entities covered by the rule overbroadly.” The court sent the FCC back to the drawing board. Disparate impact can hold parties, such as ISPs, legally liable for unintentional acts of discrimination. “As the imposition of disparate impact liability on a wide universe of entities not otherwise regulated by the FCC is at the core of the final rule, we follow our normal practice [and] vacate the final rule in its entirety,” the court wrote. The rules were championed by FCC Chairwoman Jessica Rosenworcel, Commissioner Anna Gomez, and Commissioner Geoffrey Starks, a Democratic majority forged by the Biden White House. (More after paywall)