Court Selected to Hear Legal Challenges to FCC's Digital Discrimination Order

According to a February 9 order by the U.S. Judicial Panel on Multidistrict Litigation, several legal challenges against the FCC's November 2023 Digital Discrimination Order will be consolidated and heard before the 8th Circuit Court of Appeals. Although all acknowledge that Section 60506 of the Infrastructure Investment and Jobs Act of 2021 authorizes the Commission to adopt rules prohibiting intentional digital discrimination of access to broadband Internet services based on one's membership in a protected class, the Commission's Order exceeds the agency's statutory authority by imposing unintentional disparate impact liability on broadband Internet service providers.

In March 2023, the Free State Foundation filed public comments in the Commission's digital discrimination proceeding addressing the legal authority conferred on the Commission:

The text of the Infrastructure Act requires an intent-based definitional standard for digital discrimination. Section 60506(b) authorizes the Commission to adopt rules that prevent digital discrimination "based on" the specific categories of income level, race, ethnicity, religion, or

natural origin. The Infrastructure Act's inclusion of the words "based on" in connection with suspect or prohibited classifications and – most significantly for purposes of statutory interpretation – the absence of any broader catchall terms such as "results in" or "otherwise

adversely [a]ffects" indicates that proof of intent is a necessary element of any successful claim of "digital discrimination." 

Congress undoubtedly also was aware of Supreme Court precedents regarding the use of catchall terms to express intent when it enacted the Infrastructure Act and declined to include in the statute any such catchall terminology. As a result, Section 60506 should be understood as conferring no authority on the Commission to adopt an unintentional disparate impact standard for digital discrimination in broadband deployment.

 

Given recent developments in Supreme Court jurisprudence, particularly the emergence of the major questions doctrine, the Commission may not be able to rely on Chevron deference to prop up the agency's imposition of unintentional disparate impact liability. The Free State Foundation's April 2023 reply comments addressed this point:

We agree with comments that the Commission's interpretation of Section 60506 is limited by the major questions doctrine. As explained by the Supreme Court in West Virginia v. EPA (2023), the doctrine holds that there are certain "extraordinary cases" involving decisions of such "political and economic significance" that a "clear congressional authorization" by Congress is required for the agency to exercise the powers it claims. Section 60506 does not contain clear congressional authorization for redrawing the regulatory landscape of broadband Internet services under the Communications Act… The broader the extent to which the Commission's rules impose liability on ISPs and the more onerous the restrictions and obligations they impose on the details of deployment undertakings, the more likely it is that such rules would be of vast political and economic significance. 

FSF's reply comments concluded if the Commission imposed disparate impact liability that the agency's new regulatory apparatus would more likely be considered an extraordinary case that would be unlawful under the major questions doctrine.