Could FCC actions impact internet access for you, businesses?

Matt Furlow
Senior Director and Policy Counsel, C_TEC, U.S. Chamber of Commerce

Published

June 14, 2024

Closing the digital divide remains a top priority for many policymakers. After all, an internet connection is a vital tool that offers significant benefits for communities, especially pertaining to work, school, healthcare, banking, and communication.

However, any prospects of achieving this important goal are being hamstrung by the Biden Administration’s regulatory crusade to micromanage the broadband marketplace. Not only is this endeavor counterproductive to the Administration’s own “Internet for All” goals, but it is also fraught with policies that have proven to do nothing more than stifle innovation and undermine American free enterprise.

Outline of the FCC’s Regulatory Overreach

While the Administration has several regulatory undertakings in the broadband space, two major rulemakings from the Federal Communications Commission (FCC) are perhaps the ones that most significantly and adversely impact Americans’ ability to get online.

Title II Reclassification: Reclassification would cause broadband to be regulated under the same 1930s-era public utility framework implemented for legacy telephone networks. If upheld, the FCC could seek to exercise extraordinary powers over nearly every aspect of the broadband marketplace and empower the FCC to pick and choose which sections of Title II to apply to broadband—making the Commission a de facto legislator.
Digital Discrimination: This rulemaking, which the FCC finalized in November 2023, seeks to address alleged “digital discrimination” in the broadband marketplace and to ensure equal access to broadband across income level, race, ethnicity, color, religion, and national origin. The Chamber opposes discrimination. However, the FCC embraced a legally questionable and onerous disparate impact standard, where a business can be held liable for legitimate business and deployment decisions even if they did not intend to discriminate. Most concerningly, the rule creates potential liability for simple pricing decisions.

Why The FCC’s Actions are Concerning

These rules hinder the goal of connecting all Americans by not only stifling broadband investment and innovation but also unraveling longstanding communications policy, which could unleash a wrath of legal challenges.

Closing the Digital Divide Becomes Harder: These rules undermine public and private sector efforts to build modern broadband networks—jeopardizing connectivity for all Americans.
Longstanding U.S. Communications Policy Gets Overhauled: Both rulemakings represent a major departure from the longstanding communications policy in the U.S., which prided itself in offering targeted regulation and federal investments to support broadband deployment and affordability. Instead, through these rulemakings, the FCC is seeking to establish itself as a rate regulator for broadband, which it lacks the Congressional authority to do.

Challenging the FCC in Court

Both rulemakings rest on shaky legal grounds that not only make them vulnerable to court challenges but also fuel substantial policy uncertainty for private sector innovators.

The Chamber joined a chorus of voices arguing that Title II reclassification likely runs afoul of the Supreme Court’s major questions doctrine considering the history of Title II, political and economic impact, and lack of clear Congressional authorization. Our comments to the FCC underscored this point. However, on April 25, the FCC voted on partisan lines to reclassify broadband under Title II, imposing utility-style regulations on the sector. The Chamber issued a statement strongly opposing this rule.
In January, the U.S. Chamber filed a lawsuit against the FCC on the Commission’s overly broad “digital discrimination rule” for exceeding its statutory authority and acting arbitrarily and capriciously in violation of the Administrative Procedure Act. Our opening brief was filed in April and the Eighth Circuit will hear the case later this year.