The FCC’s Digital Discrimination Order Will Harm Deployment

Today, the Federal Communications Commission (FCC) voted along party lines to adopt rules that will have a negative impact on communications providers regardless of size and scope of their services, and their customers, all in the name of so-called “digital equity.”

Congress required that the FCC determine how to address possible digital discrimination in section 60506 of the Infrastructure Investment and Jobs Act (IIJA), which was signed into law in November 2021. But with the adoption of the Digital Discrimination Report and Order and Further Notice of Proposed Rulemaking (GN Docket No. 22-69) even if there is no evidence of intent to discriminate, which is the standard for such liability, fault can still be found.

As FCC Commissioner Brendan Carr noted on November 6, 2023, this means, “if you take any action, you may be liable, and if you do nothing, you may be liable. There is no path to complying with this standardless regime.”

The order will not only impact the telecommunications industry landscape but also industries not typically regulated by the FCC, including landlords, construction crews, marketing agencies, banks, and even the government itself.

The broad stroke of this new rule places the future of broadband deployment in jeopardy, and there is a lot at stake given the $45 billion allocated by Congress in the IIJA just for the Broadband Equity Access and Deployment program, which prioritizes unserved communities. With this order, the FCC is making it not only unattractive for providers to apply for funding and build infrastructure in these communities, but also creating an environment where potential providers will find it untenable to offer service to those communities.

The power grab by the FCC caught the notice of 28 senators, led by Senate Commerce, Science, and Transportation Committee Ranking Member Ted Cruz (R-Texas). They wrote to Chairwoman Jessica Rosenworcel, insisting that she “adhere to the will of Congress and conform to the plain meaning of section 60506 to avoid causing serious damage to the competitive and innovative U.S. broadband industry.” Among the concerns raised by the senators was what they deemed to be the legality of the order’s “disparate impact standard of liability;” the potential of the “FCC explicitly contemplates regulating a broadband provider’s deployment decisions, network reliability, network maintenance, the equipment it distributes to customers, pricing, promotional discounts, customer service, language options, credit checks, marketing and advertising, and more;” and, the FCC’s determination to assert its authority over all these activities covering “both actions and omissions.”

Chairwoman Rosenworcel should take heed of what these senators are telling her. As currently written, the Digital Discrimination Report and Order is problematic and will do more to harm consumers than help them, particularly for those still living on the wrong side of the digital divide.

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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