Court Vacates Digital Discrimination Rules

In 2023, a large consortium of local government filed Comments (February 21, 2023) and Reply Comments (April 20, 2023) in the FCC’s Digital Discrimination docket (GN Docket No. 22-69). Yesterday, the U.S. Court of Appeals for the Eighth Circuit in Minnesota Telecom Alliance et al. v. FCC et al. (No. 24-1179 and consolidated cases), on judicial review vacated the FCC’s final digital discrimination rules in their entirety.

Local Government Comments & Reply Comments

In the local government filings, we urged the Commission to adopt strong, effective rules to prevent and eliminate digital discrimination in broadband access. Key arguments included:

• Impact-based rules (i.e., disparate impact) with meaningful, flexible quality-of-service standards and no “safe harbor” loopholes for claims of technical or economic infeasibility.
• Coverage limited to broadband providers (while noting the FCC lacks authority over other entities).
• Recognition of concurrent federal/state/local authority, with a strong emphasis on preserving and restoring local government authority, including repeal of FCC preemptive rules (e.g., Small Cell Order, In-Kind Compensation and Mixed Use Rules) that hinder franchising, rights-of-way management, and deployment.
• Adoption of the Communications Equity and Diversity Council (CEDC) Model Policies and Best Practices.
• Rejection of industry claims that digital discrimination does not exist, while highlighting the proven success of local franchising in ensuring universal buildout, uniform pricing, and public benefits.

Court’s Ruling on Judicial Review

The court agreed with the appellants that the FCC exceeded its statutory authority under Section 60506 of the Infrastructure Investment and Jobs Act (IIJA). The Court spent much of the decision determining whether Section 60506 required intent-based rules (disparate treatment) or neutral rules based on the effect on disadvantaged groups regardless of intent (disparate impact). The Court held that the statute’s language required intent-only rules and vacated the rules because they were based on both intent and effect.

On the reach of the rules, the court found “no textual basis for extending a statute focused on the subscriber-provider relationship to the acts and omissions of entities such as local governments and broadband infrastructure owners.” This is consistent with our Comments and Reply Comments arguments and an important holding for local governments moving forward, as it should limit preemptive action against local governments by the FCC when it prepares new digital discrimination rules to replace those the Court vacated.

While the court struck down the impact-based rules that we supported, the Court left the core congressional mandate intact and reinforced the statute’s focus on providers, which aligned with our position that the FCC lacks authority over “other entities.”

Next Steps

The FCC must now craft narrower intent-based rules focused on broadband providers and their subscribers. Local governments must remain vigilant against regulatory creep on municipal authority. Local governments have a good story to tell regarding franchising and protecting residents and subscribers. Advocacy for local authority, repealing FCC preemptive rules, and maintaining full franchising/rights-of-way authority is more relevant than ever.

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Bradley Werner, LLC

Michael Bradley and Nancy Werner are nationally recognized and respected local government attorneys. Our firm is dedicated to representing local governments on broadband, cable, telecommunications, utilities, and right-of-way management issues. We have decades of experience representing municipalities on communications and utilities matters.