ISPs Strongly Oppose FCC’s Proposed Broadband Discrimination Rules

In November, in a Report and Order (Order) in Docket 22-69, the FCC adopted rules to prevent and eliminate broadband digital discrimination. The Commission took this action to comply with the 2021 Federal Infrastructure Investment and Jobs Act, which requires that all Americans have equal access to reliable, high-speed broadband services without discrimination.

With these new rules, the Commission can now investigate possible instances of discrimination of broadband access, work with companies to solve discrimination problems, facilitate mediation, and, when necessary, penalize companies for violating its rules. To aid the process, the agency reviews consumer digital discrimination complaints through an improved consumer complaint portal and monthly meetings to assess trends in complaint patterns.

The new rules are expansive, applying to “covered entities” such as:

  • Broadband Internet access service providers;
  • Contractors retained by, or entities working through partnership agreements or
  • other business arrangements with broadband internet access service providers;
  • Entities facilitating or involved in the provision of broadband internet access service;
  • Entities maintaining and upgrading network infrastructure; and,
  • Entities that otherwise affect consumer access to broadband internet access service.

As we predicted in November, ISPs have opposed the Order. Almost twenty parties appealed it to the courts and those appeals have been consolidated by the Eighth Circuit Court of Appeals which is hearing the case. The appellants claim that the Commission’s actions are arbitrary and capricious and have not been clearly enunciated by Congress. A loss by ISPs will almost certainly be appealed upward to the Supreme Court.

At the same time the agency issued this Broadband Discrimination Order, it also created additional rules in a Further Notice of Proposed Rulemaking (Further Notice). Those proposals would require that, each broadband provider submit an annual, publicly available supplement to the Broadband Data Collection that describes, on a state-by-state or territory-by-territory basis, all major deployment, upgrade, and maintenance projects completed or substantially completed in the preceding calendar year; and that each provider be required to establish and maintain a mandatory internal compliance program to ensure that the provider regularly assesses whether and how its policies and practices advance or impede equal access to broadband internet service in its service areas.

In comments filed on March 4, 2024, ISPs strongly opposed these additional rules. For example, ACA Connects – America’s Communications Association (“ACA Connects”), NTCA – The Rural Broadband Association (“NTCA”) and WISPA – The Association for Broadband Without Boundaries (“WISPA”) (“Joint Commenters”) note that the legality of the original rules has yet to be established, therefore any consideration of these additional proposals should be deferred until the legal appeals are exhausted. Moreover, they claim the new rules are not needed and are burdensome.

[T]he Commission fails to establish a need for the proposed annual reports documenting each large broadband “deployment, upgrade, maintenance, or a combination thereof” and providing “a narrative description of the [broadband deployment] project and of the areas served by the project.” Broadband providers are already required to submit location-specific broadband availability data every six months. As demonstrated by filings in the record, this BDC data, and other data the Commission collects and analyzes pursuant to its Section 706 inquiries, can be used to assess whether providers are differentiating their broadband service offerings in a way that may implicate digital discrimination. (Joint Comments, Docket 22-69, filed March 4, 2024, at pp. 4-5).

US Telecom complains that complying with the new rules would inappropriately intrude into the business plans of every broadband provider.

The compliance program proposal in the Further Notice starts with an assumption of non-compliance. That is, it apparently is based on Commission consent decrees resolving investigations, which typically require the entity involved to establish a compliance plan. The Commission typically enters such consent decrees only after it has performed extensive fact gathering to ascertain whether there has been an apparent violation of the rules. In exchange for resolving an investigation, regulated entities agree to address the agency’s questions regarding compliance by committing to added internal processes. Yet, before even a single disparate impact complaint has been reviewed, the Further Notice suggests that all providers are presumed non-compliant and should be subject to burdensome compliance programs. (US Telecom Comments, Docket 22-69, filed March 4, 2024, at p. 14.).

Like the Order, the Further Notice will be appealed and wind its way through the Courts. It looks like for the foreseeable future the industry will have a liberal FCC adding more and more rules for ISPs to comply with. The legality of those rules will undoubtedly be decided by a conservative Supreme Court. Hopefully, only the rules truly needed will be found lawful.