FCC Releases Adopted Digital Discrimination R&O and FNPRM

On November 20, 2023, the FCC released the Report and Order and Further Notice of Proposed Rulemaking (“R&O” and “FNPRM” respectively) adopting rules to prevent digital discrimination of access to broadband.  The item was adopted at the November Open Meeting.

You may recall that section 60506 of the Infrastructure Investment and Jobs Act of 2021 requires the FCC to establish a framework to facilitate equal access to broadband by November 15, 2023.  As explained in greater detail below, the R&O adopts rules in accordance with this mandate, and the FNPRM seeks comment on additional matters pertaining to the implementation of section 60506.

Report and Order

In the R&O, the FCC adopts rules to facilitate equal access to broadband.  The rules are intended to address policies and practices that impede equal access to broadband, while taking into account issues of technical and economic feasibility that pose challenges to equal access.  Specifically, the FCC adopts the following:

  • Definition of “Digital Discrimination of Access”:   The FCC adopts a definition of “Digital Discrimination of Access” based on both disparate treatment and disparate impact.  Specifically, the FCC defines “digital discrimination of access” as “policies and practices, not justified by genuine issues of technical or economic feasibility, that (1) differentially impact consumers’ access to broadband service based on income level, race, ethnicity, color, religion, or national origin, or (2) are intended to have such differential impact.
    • Disparate Treatment:  The FCC defines disparate treatment to include “any act by a covered entity that is intended to differentially impact access to broadband internet access service on one of the listed basis and is not justified by genuine issues of technical or economic feasibly.”  The FCC does not expect to encounter many instances of intentional discrimination with respect to deployment and network upgrades, and that, in most cases, a determination that a covered entity engaged in intentional discrimination will lead to liability.
    • Disparate Impact:  The FCC defines disparate impact to include any business conduct having the discriminatory effect of denying consumers the equal opportunity to subscribe to an offered broadband service, regardless of the motivation for such actions.  The FCC limits disparate impact claims by requiring two showings: (1) that the disparate impact is caused by a specific policy or practice; and (2) the policy is not justified by “issues of technical and economic feasibility.”  The FCC anticipates that a demonstration of “issues of technical and economic feasibility” will include proof that there is not a reasonably available and achievable alternative policy or practice that would serve the entity’s legitimate business objectives with less discriminatory effect.
      • Definition of “technically feasible”:  The FCC defines a “technically feasible” policy or practice to mean “one that is reasonably achievable as evidenced by prior success by covered entities under similar circumstances or demonstrated technological advances clearly indicating that the policy or practice in question may reasonably be adopted, implemented, and utilized.”
      • Definition of “economically feasible”:  The FCC defines an “economically feasible” policy or practice to mean “a policy or practice that is reasonably achievable as evidenced by prior success by covered entities under similar circumstances or demonstrated new economic conditions clearly indicating that the policy or practice in question may reasonably be adopted, implemented, and utilized.”
  • Prohibition of Digital Discrimination of Access:  The FCC adopts a rule broadly and directly prohibiting “digital discrimination of access.”  Under this rule, both intentionally discriminatory conduct and conduct that produces discriminatory effects are expressly forbidden.
  • Scope of the Prohibition:
    • Providers: The FCC applies the adopted rules to “entities that provide, facilitate and affect consumer access to broadband internet service.”  This includes: broadband providers as defined in rule 54.1600(b), 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.
    • Consumers:  The FCC defines “consumers” to include both current subscribers and prospective subscribers of broadband internet access service.  This includes individuals, groups, organizations, and businesses.
    • Services:  The FCC applies the adopted rules to “broadband internet access service” defined as “a mass-market retail service by wire or radio that provides the capability to transmit data to and receive data from all or substantially all internet endpoints, including any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up internet access service.  This term also encompasses any service that the Commission finds to be providing a functional equivalent of the service described in the previous sentence or that is used to evade the protections set forth in this part.”  In considering disparate impact or comparability of service, the FCC will consider things like service quality and terms and conditions of service, including but not limited to price.
  • Revised Informal Consumer Complaint Process:  The FCC revises its informal consumer complaint process to: (1) add a dedicated pathway for digital discrimination of access complaints; (2) collect voluntary demographic information from filers who submit digital discrimination of access complaints; and (3) establish a clear pathway for organizations to submit digital discrimination of access complaints.
  • Enforcement:  The FCC will use its traditional enforcement mechanisms to enforce the digital discrimination rules, ranging from letters of inquiry to remedial orders to forfeiture proceedings.  The FCC will apply the standard discriminatory frameworks used by courts and other agencies to determine whether providers.  The FCC declines to adopt a structured formal complaint process at this time.
  • State and Local Model Policies and Best Practices:  The FCC adopts the Communications Equity and Diversity Council’s recommendations that propose model policies and practices for states and localities to address digital discrimination of access.

The rules will be effective 60 days after publication in the Federal Register, except for the rules establishing a new informal complaint process, for which the Commission must seek OMB approval.

Further Notice of Proposed Rulemaking 

In the FNPRM, the FCC proposes and seeks comment on:

  • Affirmative obligations that might be taken by broadband service access providers to expand broadband access and address possible discrimination of access, including annual reporting on deployment, upgrade, and maintenance projects completed or substantially completed by each provider over the preceding calendar year.  The FCC specifically proposes that each provider would be required to: (1) submit an annual, publicly-available supplement to the BDC describing, on a state-by-state or territory-by-territory basis, any large-scale broadband deployment, upgrade, and maintenance projects that were completed or substantially completed during the preceding calendar year and the communities served by such projects; and (2) establish a mandatory internal compliance program requiring regular internal assessment of (a) what communities are served by recent, pending, and planned large-scale projects and (b) whether the provider’s broadband-related policies and practices might differentially impact consumers’ access to broadband based on a listed characteristic and without adequate technical or economic justification.
  • Other efforts to promote digital equity and inclusion.

Comments will be due 30 days after Federal Register publication.

Reply comments will be due 60 days after Federal Register publication.

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