FCC Ready To Ramp Up Rulemaking on Two Key Issues

The Federal Communications Commission (FCC) is one of the most important regulatory agencies in America, and perhaps the world.  It is home to scores of talented, dedicated, and hard-working engineers, economists, and legal experts who have eschewed private-sector lucre for selfless public service.  

With statutory authority to regulate the nation’s communications systems, devices, and technology, the FCC has power to approve or deny mergers; levy fines and penalties; bring suit; award licenses and contracts; allocate spectrum; conduct hearings and inquiries; establish standards and codes; and promulgate regulations governing television, radio, telephone, wireless, mobile, Internet, cable, satellite, and international services in the multibillion-dollar telecom, media, and technology sector.  

Established by President Franklin D. Roosevelt in 1934 to consolidate oversight of all forms of wired and wireless communication in the United States, the agency has played a central role in shaping the country’s communications landscape, adapting to technological advancements and the changing needs of the industry and the public.  

The FCC has been at the forefront of monumental, paradigm-changing rulings, many of which have implications far beyond the realm of media and communications.  The agency today is as critical as ever for both consumers and commerce alike, and its decisions have far-reaching practical and market implications for society. 

During its nearly 90 years of existence, the FCC has seen its share of litigation.  Its track record on appeals is less than stellar, having been on the losing side of numerous decisions in the federal circuit courts and the U.S. Supreme Court.  Despite its poor record on appeal, the FCC remains undaunted and undeterred.  With its newly constituted three-Democrat majority, the agency is now barreling toward yet another round of adverse rulings. 

On net neutrality, the FCC has just notified the country – and indeed, the world – that it is poised to conduct another rulemaking to regulate the Internet as a public utility or “telecommunications service” under Title II of the Communications Act.  That approach found favor under the Obama FCC in 2015.  

But in 2017, the Trump FCC undid those rules in favor of a less regulatory approach to the Internet as an “information service.”  When challenged in 2019 by Mozilla, the U.S. Court of Appeals for the D.C. Circuit upheld the Trump FCC regulations, which remain in effect today.  The court found that the FCC had the authority to reclassify broadband as an “information service” rather than a “telecommunications service.”  This distinction is significant because “information services” are subject to less-stringent regulation than “telecommunications services.” 

As the Biden FCC takes a stroll down memory lane, several things are bound to happen.  First, it will likely pass the same or similar rules as the Obama Administration to reclassify Title II regulation of the Internet as a telecommunications service.  And it is likely – even predictable – that those rules will be challenged by the industries that bring us the services.  Also likely is the same or similar ruling by the very appellate court that overturned them the first time.  With ping-pong predictability, this will mark the third time the agency has instituted rules to regulate the Internet as a public utility.  And, more than likely the third time it will lose on appeal. 

Another equally important ruling now before the FCC is the matter of digital discrimination.  You may recall the landmark Infrastructure Investment and Jobs Act (IIJA) of 2021, which Biden proudly boasts provided $65 billion in broadband funding to close the digital divide.  Pursuant to the IIJA, Congress has tasked the FCC to come up with rules to “facilitate equal access to broadband internet access” and to identify steps to prevent “digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin.” 

Key to those rules is the definition of “digital discrimination” that will govern the actions of broadband providers like AT&T, Verizon, Comcast, and others. 

At this point, the FCC proposes to adopt a definition of “digital discrimination of access” that encompasses actions or omissions by a provider that differentially impact consumers’ access to broadband Internet access service.  In other words, the FCC is looking at whether providers’ actions will have a “disparate impact” (or discriminatory effect) on certain consumers.  Such a standard would be contrary to what other federal agencies have already adopted and could have the unintended effect of unraveling existing civil rights protections. 

In contrast, there is weighty evidence that the FCC should adopt a definition of digital discrimination that focuses on disparate treatment (or discriminatory intent).  With the support of business groups, the U.S. Chamber of Commerce, and industry providers, the latter approach augurs well for continued commitment to investment and broadband deployment. 

While to most of us this may be a distinction without a difference, the laws of discrimination are clear.  Title VI of the Civil Rights Act of 1964 provides that no person “on the ground of race, color, or national origin” be subjected to discrimination under any program receiving federal funding.  And in 2001 the Supreme Court ruled in Alexander v. Sandoval that a Title VI plaintiff cannot sue under a disparate impact theory because the statutory language (discrimination “on the ground of”) “prohibits only intentional discrimination.”  

Similarly, the key section of the IIJA states that the FCC “facilitate equal access to broadband internet” by preventing digital discrimination “based on income level, race, ethnicity, color, religion, or national origin.”  The consonance of these provisions should be sufficient to guide the FCC to a discriminatory intent standard. 

But we cannot be sure.  Signs are that the Commission is posturing to adopt a standard different from what other federal agencies have already adopted.  If so, the agency’s ruling could once again be overturned by a federal appeals court.  And that might hasten the unraveling of other equally essential civil rights protections. 

By any objective measure, the FCC has been a beleaguered agency.  Browbeaten by Congress, criticized by consumers, and pilloried in the press, the Commission rarely gets its due as an expert independent agency that does amazing work.  Whether its woes are due to lack of leadership, errant enforcement, or partisan politics, is hard to say.  

But one thing is certain: Another stumbling series of rulings on net neutrality and digital discrimination will only marginalize the important work it otherwise does.  And that will not further the cause of consumers, industries, or the public interest in the least. 

Adonis Hoffman is CEO of The Advisory Counsel LLC and a former professor at Georgetown University.  He served as chief of staff and senior legal advisor at the FCC and previously in senior roles in the U.S. House of Representatives.  He is a member of The Media Institute’s Board of Trustees and First Amendment Advisory Council.  This article appeared in The Hill.