The U.S. Court of Appeals for the Eighth Circuit ruled on May 6, local time, that a key rule by the U.S. Federal Communications Commission (FCC) targeting “digital discrimination” in broadband access was ultra vires and revoked the rule in its entirety, delivering a major victory to the telecommunications and cable TV lobby groups that had long opposed the rule. The ruling was also publicly welcomed by current FCC Chairman Brendan Carr, who voted against the rule passed during the Biden administration in 2023.
According to the ruling of three judges appointed by Republican presidents, the FCC went beyond the scope of congressional authorization by introducing a "disparate impact" liability mechanism in the rules. The court held that the relevant laws only support traditional anti-discrimination supervision for “disparate treatment” and do not include accountability for “unintentional discrimination” that is neutral on the surface but adversely affects specific groups in effect. The judgment stated that the Infrastructure Investment and Employment Act requires the FCC to formulate rules to prevent "digital access discrimination" based on income, race, color, religion, or country of origin. However, the Supreme Court has repeatedly emphasized that the usual meaning of "discrimination" is "differential treatment."
The court also rejected the FCC’s practice of applying the rules to non-broadband service providers, finding that the FCC also exceeded its authority in defining “covered entities.” In the overturned rules, the FCC attempted to extend the scope of responsibility to various entities that "affect consumers' access to broadband services," including contractors entrusted by broadband operators, third parties that assist in providing services, companies responsible for maintaining and upgrading network infrastructure, and even other entities that "affect consumers' broadband access in some way," such as landlords who restrict the choice of operators in buildings. The court pointed out that the relevant legal text only explicitly mentioned two types of entities - broadband providers and service subscribers, so there was "no textual basis" to extend the regulatory objects to other parties such as local governments or broadband infrastructure owners.
The revoked rule originated from an order during the Biden administration and was designed to provide consumers with a complaint channel and clarify the elements that the FCC will review when investigating suspected digital discrimination. Once it is determined that a violation occurs, all available penalties and remedies can be used. At that time, the FCC defined "broadband access discrimination" as: certain policies or practices that have a disparate impact on consumers of a specific income level, race, ethnicity, color, religion, or nationality, or that are intended to have a disparate impact, provided there are no real technical or economic feasibility barriers.
After the court's ruling, FCC Chairman Carr issued a statement calling it "another common-sense anti-discrimination victory." He claimed that the overturned rules would actually "force broadband providers and many other businesses to treat people differently based on race, gender or other protected characteristics," but did not elaborate on how the rules would "force" discriminatory behavior in operation. Carr also compared the rule to diversity, equity and inclusion (DEI) policies that he has long criticized, arguing that both are equally "discriminatory" measures.
However, John Bergmayer, legal director of the public interest advocacy organization "Public Knowledge", severely criticized the ruling, saying that it "eliminates a regulatory tool for a problem with sufficient evidence in reality." He noted that low-income communities and communities of color "often get slower networks, older equipment, and pay higher prices for the same products as wealthier communities" for broadband service. After the rule was overturned, the FCC will only be able to take action in the future if it can find "smoking gun" evidence of direct intentional discrimination, and such clear records "almost never appear" in reality.
The litigation front against FCC rules is quite extensive. Several national telecommunications and cable industry lobbying organizations, including NCTA, which represents cable operators, wireless industry lobbying organization CTIA, and USTelecom, which represents multiple Internet service providers across the United States, filed challenges in six federal appeals courts, and the case eventually landed in the Eighth Circuit Court of Appeals through random assignment. In addition, some industry groups representing the interests of state operators have also joined the lawsuit, covering Minnesota, Missouri, Ohio, Florida, Alabama, Mississippi and Texas. There are also groups representing rental property owners and contractors building broadband networks for operators. Congressional Republicans also initiated a legislative process in 2024 in an attempt to veto the rule through a parliamentary resolution, but the relevant bill ultimately did not receive a vote.
The Eighth Circuit Court emphasized in its decision that the FCC’s rules actually cover “unintentional discrimination”, that is, a seemingly neutral policy or behavior that causes a disproportionate adverse impact on a protected group in terms of implementation results. The judges found that Congress did not write this "disparate impact liability" into law when it authorized the FCC to develop digital discrimination rules, thereby limiting the FCC's room to adopt broader anti-discrimination tools. In the court’s view, the FCC’s interpretation of the rules went beyond the reasonable boundaries of the legal text.
In the ruling, the court concluded that the FCC exceeded its statutory authority in two aspects "relevant to the core of the rule" - the introduction of a differential impact liability mechanism and the definition of the scope of regulated entities, and therefore decided to "rescind the final rule in its entirety." However, the court also pointed out that the FCC still has an unfulfilled obligation to "formulate final rules to promote equal access to broadband" under the framework of Section 1754 of Title 47 of the United States Code. This means that the FCC may need to redesign new rules in line with the court’s opinions in the future under a stricter legal interpretation framework.
Industry groups also challenged other parts of the rule in the lawsuit, including institutional arrangements such as a "burden-of-proof-shifting structure" designed for disparate impact cases. The court did not make specific rulings on these ancillary disputes this time, but reminded that any new attempts by the FCC to adopt new digital discrimination rules will face additional constraints from the latest Supreme Court precedents. Under a 2024 Supreme Court ruling, federal agencies' room for autonomy in interpreting vague legal provisions has been significantly reduced, and courts will have greater initiative when reviewing relevant rules.
Bergmeier said the Eighth Circuit "made a mistake" in its understanding of the statute. In his view, Congress’s original intention was to require the FCC to prevent digital discrimination, and judging from the entire regulatory structure, legislators clearly want to address the consequences of long-term accumulated structural discrimination, rather than just provide relief when clear and demonstrable subjective malicious discrimination occurs. He warned that under the current ruling, many of the inequalities that have been widely documented will be more difficult to correct through administrative supervision.