NAM Brief: FCC Digital Discrimination Rule Will ‘Hobble’ Broadband Deployment

The FCC’s digital discrimination rule “has gone far beyond what Congress intended” when it enacted the Infrastructure Investment and Jobs Act, the National Association of Manufacturers said in an amicus brief Tuesday (docket 24-1179) in the 8th U.S. Circuit Court of Appeals. The brief supports the 20 industry petitioners that want the rule vacated as unlawful in part, they say, because the FCC imposed it without clear congressional intent (see 2404230032).

The consolidated petitions that challenge the rule present “deeply consequential questions regarding the future of broadband for U.S. manufacturers,” said the brief. Congress enacted the statute “to address the many and varied infrastructure challenges facing modern America, including the availability and reliability of high-speed internet,” it said.

Section 60506 of the statute prohibits intentional discrimination in the deployment of broadband based on race and class, among other factors, said the brief. It orders the FCC to pass rules to implement that prohibition, it said. But the FCC’s rule “goes much further and bans not just intentional discrimination, but also any deployment that has a disparate impact on specified groups within a service area,” it said.

The “disparate impact standard” that the rule “unilaterally” imposes “will hobble broadband deployment,” said the brief. Because no broadband provider can deploy everywhere at once, “any broadband provider could find itself under investigation and facing substantial liability” for allegedly engaging in discrimination under the FCC’s standard, it said. That's so even if the broadband provider "bases capital-investment decisions on neutral factors other than income or race, such as household density, relative construction costs, and expected demand,” it said.

By basing significant liability on a “broad and nebulous” standard -- presenting providers with a choice between not expanding their networks or expanding in the face of “potentially devastating liability” -- the rule will deter investment in critical broadband infrastructure, said the brief. “That will harm manufacturers, which increasingly need high-speed, reliable broadband to process the enormous amount of data they create and use,” it said.

By imposing the rule, the FCC “impermissibly attempts” to resolve a major question, one with extraordinary nationwide social, economic and political consequences, “without clear congressional authorization,” said the brief. Nowhere in the statute does Congress instruct the FCC “to penalize broadband employers for expanding broadband access unevenly,” it said.

Congress instructed the FCC “only to create rules to prevent intentional discrimination in the deployment of broadband, not deployments that have disparate impacts,” said the brief. Because the FCC can point to no clear congressional authorization for the disparate impact provision in its rule, the rule is invalid, it said.

Broadband providers shouldn’t be subject to devastating liability under a far-reaching rule “that expands their responsibilities light years beyond the statute and addresses a major question without appropriate congressional authorization,” said the brief. The 8th Circuit should vacate the rule, it said.