Ever since the U.S. Senate confirmed Anna Gomez to the Federal Communications Commission, cementing Democratic control over the commission, the agency has moved at break-neck speed to expand federal control over America’s telecommunication network. These moves are all occurring under the guise of increasing the affordability and connectivity of fast and reliable internet to more Americans. While well intended, these moves only increase regulatory burdens on Internet Service Providers (ISPs) that, in the long term, risk disincentivizing investment in network deployment, upgrades, and maintenance.
While the FCC’s proposal to reintroduce net neutrality guidelines has captured the public’s imagination, a far more dangerous rulemaking concerning digital discrimination was adopted Wednesday in a 3-2 party line vote. While this spector-like proposal has largely been absent from broader discussions, the far-reaching implications of the new rule could upend the broadband market and leave consumers paying the price.
What is Digital Discrimination?
When the average American hears the term digital discrimination, they correctly assume it describes a situation where minority communities, whether African-American, Latino, or low-income, are less likely to have access to high-speed internet. Additionally, the use of the term discrimination presumes providers are actively seeking to deny these communities access to broadband and the benefits of connectivity.
In order to correct this alleged discrimination, the FCC’s new framework would “facilitate equal access to broadband internet service by preventing digital discrimination.” The framework would establish a disparate impact standard that defines digital discrimination as “the policies or practices, not justified by genuine issues of technical or economic feasibility, that differentially impact consumers’ access to broadband internet access service based on their income level, race, ethnicity, color, religion or national origin.” Under these new rules, the FCC could:
- Dictate “network infrastructure deployment, network reliability, network upgrades, network maintenance, customer-premises equipment, and installation;”
- Mandate “speeds, capacities, latency, data caps, throttling, pricing, promotional rates, imposition of late fees, opportunity for equipment rental, installation time, contract renewal terms, service termination terms, and use of customer credit and account history;”
- Impose “mandatory arbitration clauses, pricing, deposits, discounts, customer service, language options, credit checks, marketing or advertising, contract renewal, upgrades, account termination, transfers to another covered entity, and service suspension.”
The FCC’s digital discrimination rules represent the largest expansion of the agency’s power in its history and deal a catastrophic blow to an industry that has made significant strides to connect marginalized communities. Critically, these advancements occurred outside of government dictates and delivered affordable broadband to anyone who wants it.
While well-intentioned, the guidelines ignore the fact that between 1998 and 2022, the number of individuals from minority groups with internet access has substantially increased. In 2007, for example, just 50 percent of African Americans had access to the internet. Today, that number is 77 percent and only slightly lags White Americans. Similarly, Hispanic Americans have made substantial progress in getting connected. In 2007, just 47 percent of Hispanics had access to the Internet. In 2022, that number had risen to 77 percent, just behind White Americans. These substantial gains were made because ISPs made a concerted effort to invest in underserved communities and deliver high-speed internet at an affordable price. Importantly these gains were made absent of draconian government mandates, highlighting that while work still needs to be done, private companies offer the best solution to ensuring every American can access the internet.
The most concerning aspect of the new digital discrimination rules is that they represent a substantial and potentially irrevocable government intervention in America’s telecommunication networks. In opposing the rulemaking, FCC Republican Commissioner Brendan Carr contended the “rules would give the federal government a roving mandate to micromanage nearly every aspect of how the Internet functions—from how ISPs allocate capital and where they build, to the services that consumers can purchase, from the profits that ISPs can realize and how they market and advertise services, to the discounts and promotions that consumers can receive.” These new powers, and red tape, ultimately make it harder for ISPs to continue making record investments in deployment, upgrades, and maintenance that has made internet access affordable for millions of Americans, particularly in underserved and marginalized communities.
Aside from the colossal expansion of government power into America’s communications network, questions also exist around whether a Supreme Court that has been skeptical of agency overreach would allow the rules to go into effect. In West Virginia vs. EPA, the Supreme Court ruled that agencies, like the FCC, must establish clear congressional intent, particularly when “the agency’s new policy or rule will have a significant impact on the economy or national policy and springs from an enlargement of an agency’s power or growth in a new area of regulation.” As Commissioner Carr has noted, “Congress never contemplated the sweeping regulatory regime that President Biden asked the FCC to adopt—let alone authorized the agency to implement.” Such legal ambiguity means there is a real chance that the proposed rules could be struck down, leaving taxpayers on the hook for millions of dollars in legal fees and providers fearful that new measures could be just around the corner.
The FCC’s ruling also runs the risk of duplicating Congressional efforts to close the digital divide and connect marginalized communities. As Jeff Westling from the American Action Forum has noted, “Congress has already made a $42.5 billion investment in broadband deployment, which will largely target the disparities in access that currently exist, especially in rural areas.” While not specifically targeting marginalized communities, the Broadband Equity Access and Deployment Program will help connect rural communities that are most likely to be without internet access and also “alleviating some of the concerns regarding digital discrimination.”
In an era when broadband is becoming a necessity and not a luxury, the FCC’s desire to connect marginalized communities is understandable, perhaps also admirable. The problem lies in the fact that the FCC is attempting an unprecedented, and likely unconstitutional, power grab, that would allow it to regulate an industry that has connected more minority Americans than ever before. The new rules and powers that the FCC plans to bestow upon itself in the name of equity face certain legal challenges and, worse, destroy record investments that have connected more Americans to the internet than ever before.