Restart on Digital Discrimination Rules

Key Takeaways

• 8th Circuit vacated FCC’s 2023 broadband discrimination order
• Court rejected FCC’s disparate discrimination test as beyond congressional authority
• Ruling limits enforcement to intentional discrimination, raising proof burden
• New FCC rules must target only last‑mile ISPs
• Landlords exempted from broadband discrimination complaints under revised framework

Pulse Analysis

The Infrastructure Investment and Jobs Act of 2021 tasked the FCC with preventing digital discrimination in broadband services. In 2023 the agency issued a two‑pronged rule: it barred intentional discrimination—explicit policies that target a class of users—and introduced a disparate‑impact test that examined outcomes regardless of motive. The latter mirrored housing‑fair‑practice standards and extended the rule’s reach to multi‑dwelling‑unit owners and other non‑last‑mile providers. Major carriers, led by AT&T, Comcast, Charter, Verizon and T‑Mobile, immediately filed suit, arguing the FCC had exceeded its statutory authority.

The Eighth Circuit focused on the major questions doctrine, which recent Supreme Court decisions reserve for agencies only those actions with clear congressional endorsement. The court found that Congress never expressly authorized a disparate‑impact test for broadband, nor did it permit the FCC to regulate entities beyond last‑mile providers. By striking down both the test and the broader applicability, the decision narrows the regulatory toolkit and raises the evidentiary bar for any future discrimination claims. Plaintiffs will now need concrete proof of intent, a standard that is notoriously difficult to satisfy in the telecom arena.

The FCC remains bound by the IIJA, so a revised rulebook is inevitable. Industry observers expect the commission to draft a narrower proposal that focuses solely on intentional discrimination and confines its reach to traditional last‑mile ISPs, likely accompanied by a robust comment period to address the court’s concerns. For consumers, the immediate effect is minimal—no enforcement changes will materialize until new rules are finalized—but the higher proof threshold could delay remediation of subtle bias in service quality or pricing. The case also signals to other regulators that expansive, outcome‑based tests may face heightened judicial scrutiny, reshaping how digital equity policies are crafted nationwide.