FCC Adopts New Rule Against Digital Discrimination
By: Sean Tropea -Georgia and South Carolina Licensed Associate Attorney with Brownlee Whitlow & Praet, PLLC
On November 20, 2023, the Federal Communications Commission (FCC) released a Report and Order and a Further Notice
of Proposed Rulemaking, adopting rules made with an intent to curb digital discrimination of access and addressing
proposed obligations for broadband internet access service providers involving intentional discrimination and discrimination through disparate impact.
“DIGITAL DISCRIMINATION OF ACCESS” DEFINED
The FCC’s new rules prohibit policies and practices that affect, intentionally or through disparate impact, consumer digital discrimination of access. The rules define “digital discrimination of access” as “[p]olicies or practices, not justified by
genuine issues of technical or economic feasibility, that (1) differentially impact consumers’ access to broadband internet
access service based on their income level, race, ethnicity, color, religion or national origin, or (2) are intended to have such differential impact.” This definition expresses a broader “disparate impact” viewpoint of discrimination liability, making it
easier for the FCC to prove discrimination because it may not be required to prove that a provider had any discriminatory
intent behind whatever policy or practice is being alleged as discriminatory.
WHAT DO THE NEW RULES APPLY TO?
The new rules broadly apply to many aspects of broadband service, and it is now possible that any material differentiation
in quality of broadband service may provide a basis for discrimination liability. More specifically, discrimination liability may
now lie within technical aspects of service (e.g., speed, latency, and capacity), technical trends (e.g., installation, deployment, and network maintenance), and even “terms and conditions of service” (e.g., price, discounts, credit requirements, marketing, upgrades, and termination). The sweeping breadth of the rules opens providers up to complaints and potential enforcement not only for the networks they build and services they provide, but the financial and contracting practices that govern nearly
all aspects of relationships with customers.
WHO DO THE NEW RULES APPLY TO?
The new rules also broadly apply to any “covered entities” that provide, facilitate, and affect consumer access to
broadband internet service (e.g., broadband providers and their contractors; entities facilitating or involved in providing broadband internet service; entities maintaining and upgrading networks; and entities otherwise affecting consumer access
to broadband internet access service).
The new rules define “consumers” as both current and prospective broadband internet service subscribers (e.g., individual persons, groups of persons, individual organizations, and groups of organizations) with the capacity to “subscribe to and receive broadband internet access service.”
In context of the rental housing industry, a conservative interpretation of the above terms indicates that “covered entities” includes property owners, and “consumers” includes residents. Therefore, under the new rules, property owners may now become the subject of an FCC investigation if a resident makes a complaint of digital discrimination.
With the new rules existing in their infancy and being written so vaguely, many unknown variables (e.g., future
governmental administrations, litigation trends, and evolutions in the implementation of broadband service) have yet to provide onlookers within the rental housing industry with a clear image of examples where property owners may become entangled in a complaint of digital discrimination. Because of the vague construction and unknown future of these new
rules, it is safest to observe them with caution as they provide the FCC with what appears to be a broad reach to
investigate alleged digital discrimination. An investigation could start with allegations from a resident that a property owner
participated in or contributed to any discrimination by communicating (i.e., directly or through management) with a
broadband provider in a manner that impacted the prices or options of broadband services available to a resident or
group of residents. If a property owner were to share demographic information with a broadband provider who is
subsequently found by the FCC to be liable for digital discrimination, the act of sharing that information could be enough
to find the property owner liable as well.
COMPLAINTS UNDER THE NEW RULES
When investigating complaints, the new rules outline that the FCC will: (1) identify the policy or practice alleged as discriminatory; (2) assess whether said policy or practice is otherwise justified by genuine issues of technical or economic feasibility (although the FCC has indicated it is apprehensive of covered entities who seek to defend themselves on
economic convenience alone); and (3) determine whether any reasonable, less discriminatory alternatives exist.
The FCC will investigate and address complaints of digital discrimination of access via letters of inquiry and audits, issuing remedial orders and potentially initiating forfeiture proceedings when it determines a covered entity is liable. There are additional methods, however, through which the FCC may address complaints.
The new rules include an option for complainants and covered entities to engage in voluntary mediation. Additionally,
covered entities may request advisory opinions from the FCC whenever compliance clarity is sought.
PREPARING FOR THE ROAD AHEAD
Although the new rules establish a “grace period” after they go into effect, during which no complaint will result in an investigation for at least six (6) months, and these rules will likely become subject to public debate and comment,
those who fall within the scope of “covered entities” may begin taking certain preparatory measures now, such as:
- facilitating awareness and understanding the basics of these new rules, to better ensure liability is avoided in the future;
- auditing current policies and procedures, as well as contracts with any other parties who may be considered “covered entities,” to determine if any aspects of broadband service may soon present a risk of liability;
- monitor the ongoing development of the new rules and any authority they may create or impact; and
- consult legal counsel for assistance with navigating and more fully understanding this new area of law.
*The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information in this article is for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information. Viewers of this material should contact their attorney to obtain advice with respect to any particular legal matter. No viewer of this material should act or refrain from acting on the basis of information in this presentation without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this article does not create an attorney-client relationship between the reader and Brownlee Whitlow & Praet, PLLC or any contributing law firms. All liability with respect to actions taken or not taken based on the contents of this article are hereby expressly disclaimed.
