ST. LOUIS (CN) — A coalition of broadband-related industry entities argued before the Eighth Circuit on Wednesday that the Federal Communications Commission overstepped its authority with a rule designed to prevent discrimination when it comes to broadband access.
At issue is the scope of a rule implementing a provision of the Infrastructure Investment and Jobs Act under which the commission issues rules “preventing digital discrimination of access” to broadband internet “based on income level, race, ethnicity, color, religion or national origin.”
The petitioners, led by the Minnesota Telecom Alliance, claim the FCC overreached by not limiting its rules to intentional discrimination.
Industry petitioners attorney Morgan L. Ratner, of Sullivan & Cromwell in New York, began her arguments by attacking the use of disparate impact language in the rule, calling it the broadest disparate impact scheme the government has seen.
“Things only get worse from there,” Ratner told the three-judge panel. “The commission applies its rules not just to broadband providers, but to a host of other entities, from landlords to contractors. It covers every possible term of service, from advertising, to pricing, to deployment, to any other number of terms. And to top it all off, it applies its full gamut of remedies, including punitive fines, without a word from Congress.”
Ratner said the inclusion of the term “income level” without any additional qualifiers makes the scope of the rule extremely broad.
“Just as the sort of real-world effect on that disparate impact that includes income level picks up virtually everything a business does,” Ratner said. “A provider decides to lay cable or build a tower in one neighborhood before the next, to put an ad on one TV channel instead of another, to hire one additional technician, one additional customer service representative, to give a promotional discount to new customers or existing customers. Every single one of those things is likely to have a disparate impact based on income.”
FCC lawyer Jacob M. Lewis argued the rule is all about equal opportunity and equal access.
“Disparate impact claims, technical and economic feasibility are part of the business justifications that the court has recognized are part and parcel of disparate impact,” Lewis said. “So not only de we have the statutory markers of equal access and equal opportunity, we have this other statutory mark of technical and economic feasibility, of consideration that applies more neatly with disparate impact claims.”
Ratner said the disparate impact fails to meet any of the guidelines laid out by the Supreme Court, including that it had to be results oriented.
Lewis pushed back on that during his argument time.
“Equal access and equal opportunity are the kinds of result-oriented terms that inclusive communities points to,” Lewis said.
U.S. Circuit Judges James B. Loken, a George H.W. Bush appointee, and Duane Benton, a George W. Bush appointee, both questioned Lewis about the definition of arbitrary and capricious.
“All the commission said was our charge is to prevent additional discrimination of access to broadband,” Lewis said. “Broadband providers are not the only people who can adversely affect access to broadband service.”
The FCC filed a 108-page brief prior to the hearing, outlining its defense of the rule.
“Industry petitioners’ policy arguments are directed at an expansive regulatory framework that the commission specifically rejected,” the FCC said. “The digital-discrimination rules are confined to practices with unjustified discriminatory effects, and to the comparability of broadband service offered to consumers; they do not bar ordinary business practices.”
Marc Epstein, of the DC based Lawyers’ Committee for Civil Rights Under Law, argued against the rule during the hourlong hearing while representing public intervenors claiming the FCC failed to allow victims of broadband access discrimination the option of filing a formal complaint.
“Informal complaints merely allow individuals to file something,” Epstein said. “In other words, the victim tells the FCC about an allegation of discrimination, and the SEC decides whether or not to investigate. Formal complaints, however, allow victims to pursue claims regardless of the FCC decision of whether or not to investigate.”
U.S. Circuit Judge L. Steven Grasz, a Donald Trump, appointee, rounded out the panel, which took the case under advisement. There is no timetable for a ruling.