November 15th, 2023

ARLINGTON, VIRGINIA – Today, in a party-line vote, the Federal Communications Commission (FCC) voted 3-2 to approve an expansive new rule on Digital Discrimination that the American Consumer Institute believes will have significant unintended consequences for the broadband market.

Stemming from Section 60506 of the Infrastructure Investment and Jobs Act (IIJA), which directed the Commission to adopt new rules that facilitate “equal access to broadband internet access service based on income level, race, ethnicity, color, religion and national origin,” the new rule goes far beyond the language of the IIJA.

For instance, the new rule casts aside Congress’ call for the Commission to consider “issues of technical and economic feasibility” when trying to fulfill its objective. Congress specifically included this language so that the Commission would not assume that all broadband offers and services are discriminatory.

Yet, the Commission’s new rules do just that by embracing vague new concepts like the “disparate impact standard.” This standard holds that internet service providers (ISPs) are liable for uneven broadband access regardless of whether they intended to discriminate or not. In practice, ISPs may be found guilty by association simply because of the existence of unequal outcomes. Such a standard is overly broad and will almost certainly discourage future broadband investment and development. No ISP will want to participate in programs like the Broadband Equity Access and Deployment program if they think there is a good chance they be penalized.

Also troubling is the fact the Commission specifically rejects a narrow definition of “equal access” to services. Rather than understanding equal access to mean “equal opportunity to subscribe to an offered service that provides comparable speeds, capacities, latency” as was intended by Congress, the Commission argues the complexity of broadband service requires that it adopt a “flexible approach” to regulation that recognizes the existence of “intangible variables.” However, such an approach will make compliance next to impossible for ISPs and give the Commission the power to regulate virtually every aspect of their operations. This is a recipe for disaster that could quickly lead to rate regulation and other forms of market regulation.

Congress never intended the Commission to have such sweeping power over the broadband market. While it is always important to protect consumers from discriminatory practices, that does not give the Commission a license to overstep its statutory authority.

The American Consumer Institute is a nonprofit education and research organization. For more information about the new rule or the Institute, visit www.TheAmericanConsumer.Org or follow us on Twitter (X) @ConsumerPal.