As the Federal Communications Commission (FCC) approaches its November 15 deadline for final rulemaking on the Infrastructure Investment and Jobs Act (IIJA), a critical issue has emerged that could shape the future of broadband access in the United States. Section 60505 of the IIJA, which addresses digital discrimination for broadband access, is currently under scrutiny.

On October 10, the National Telecommunications and Information Administration (NTIA) filed an ex parte proposal supporting a concept known as “disparate impact.” This approach suggests that internet service providers (ISPs) should be liable for uneven distribution of broadband access along protected-class lines, even if discrimination is unintentional.

The American Consumer Institute (ACI) has expressed concerns about this approach, as it may not align with the intent of Congress and could result in unintended consequences:

  1. Congressional Intent: The IIJA’s language implies that the FCC should focus on addressing intentional discrimination in future implementation rather than penalizing ISPs for past actions.
  2. False Positives: A disparate impact approach could inadvertently label normal and necessary behavior discriminatory. For instance, practices like assessing risk based on credit ratings, vital for loan decisions, might be deemed discriminatory.
  3. Racial Disparity vs. Income and Adoption: Focusing solely on racial disparity might obscure the broader factors affecting broadband access, such as income and adoption rates.
  4. Broadband Equity, Access, and Deployment (BEAD) Program: The BEAD program, aimed at ensuring equitable broadband access, may face challenges with compliance under a disparate impact standard.
  5. Price Regulation: The NTIA suggests pricing should be subject to a disparate impact standard, which might not align with Congress’ original intent.

A disparate impact standard raises significant concerns, including potential harm to broadband investments and unnecessary risks that could hinder development.

The Bipartisan Policy Center has also highlighted that many minority communities in urban areas already have high levels of broadband access but struggle with low adoption rates. An infrastructure reductionist approach could result in overbuilding rather than addressing the root causes of adoption challenges.

The ACI’s comments on this matter include a statistical test on census data, revealing that demographic clustering by age, race, and income often results in statistically different census block areas. Consequently, ISPs may appear to be discriminating based on these factors when making investment decisions.

Furthermore, concerns about compliance and the functionality of BEAD programs under a disparate impact standard have been raised, which could deter ISPs from participating and slow down broadband development.

In conclusion, the FCC faces a critical decision on how to address digital discrimination for broadband access. While the goal is to protect consumers and ensure equitable access, it is vital to strike a balance that encourages investment and innovation without discouraging ISPs from expanding services.

The American Consumer Institute calls on the FCC to carefully consider the implications of adopting a disparate impact standard and to align the rules with Congress’ original intent to promote broadband development. This balance will be crucial in ensuring underserved communities receive the high-speed broadband access they need.

Read the full submission below or download it here.

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