Digital Discrimination

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As previously discussed on this site (see ICORE Blog editions of 1/27/23, 12/6/23, and 2/23/24), on 11/15/23 the FCC adopted a Report and Order (Order) and a Further Notice of Proposed Rulemaking (FNPRM) on Preventing Digital Discrimination as required by Section 60506 of the Infrastructure and Jobs Act. The Order defines Digital Discrimination of Access as “policies or practices, not justified by genuine issues of technical or economic feasibility, that differently impact consumers’ access to broadband internet service based on their income level, race, ethnicity, color, religion or national origin, or are intended to have such differential impact. The Order created new rules under which the FCC will investigate conduct alleged to be motivated by discriminatory intent as well as conduct alleged to have discriminatory effect. The issue of discriminatory effect was a hot-button issue in this proceeding with many commenters urging the Commission not to promulgate rules addressing discriminatory effect, however, in spite of significant opposition, the final rules adopted address both discriminatory intent and effect. In the FNPRM, the Commission sought comments regarding a new requirement for providers to file annual reports that facilitate greater transparency in regard to substantial broadband projects recently completed and the creation of internal compliance programs targeted to evaluating the demographics of communities served and not served by recently completed projects.

In response to the Order, numerous Petitions for Review were filed in the Federal Courts. These Petitions were consolidated for review in the U.S. Court of Appeals for the 8th Circuit Court. The Petitions focused on the Order’s inclusion of discriminatory effect. The Petitioners seek review of the Order on the grounds that it exceeds the FCC’s authority, is arbitrary and capricious and request that the Court overturn and set aside the Order.  On April 2, 2024, the 8th Circuit Court issued an order setting the briefing schedule and tentatively scheduled oral arguments in the case for either September 25th or 26th, 2024.  In addition to the opposition to the Order in the Federal Courts, recently the U.S. Senate and House of Representatives have addressed the Order. On March 14, 2024, a joint resolution of disapproval was introduced in the U.S. Senate to nullify the FCC’s Digital Discrimination Order and a companion resolution was introduced in the House. Congressional members supporting the resolutions believe that the FCC’s Order will harm broadband investment and undermine the goal of promoting high-speed internet access for all Americans. So, while the FCC’s rules promulgated in the Order are currently in effect, challenges to those rules have been made in both the Federal Court and the U.S. Congress.

In regard to the FNPRM, and its consideration of requiring additional reporting requirements and internal compliance programs, Comments and Reply Comments have now been filed by numerous Parties. In Joint Comments and Reply Comments filed by ACA Connects, NTCA, and WISPA (Joint Petitioners), the FCC was urged to not create additional compliance requirements for providers until a reasonable period of time has elapsed to allow the FCC to measure the effectiveness of the initial rules created by the Order. In addition, the Joint Commenters posited that deferral of any new rules would allow for the challenges to the existing rules that have been made in the Courts to be adjudicated. Finally, the Joint Commenters propose that if the FCC proceeds with new rules, appropriate relief should be provided for smaller and rural providers that would incur increased costs without any evidence of discriminatory practices.

As stated above, the FCC’s rules created by the 11/15/23 Order are currently in effect but significant challenges to those rules exist and have yet to play out. Due to this uncertainty, the FCC should defer the creation of additional rules via the FNPRM at this time. We will continue to monitor this issue and will provide updates as the situation evolves.

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