- The U.S. Court of Appeals for the Eighth Circuit struck down the digital equity rule implemented by the former FCC under Jessica Rosenworcel
- This week’s court ruling will have the most impact on the government’s Broadband, Equity, Access and Deployment (BEAD) program
- Telecom industry groups celebrated the overturning of the digital equity rule
In the Infrastructure Investment and Jobs Act of 2021, Congress tasked the Federal Communications Commission (FCC) with adopting rules to prevent digital discrimination of access to broadband by consumers. The prior FCC under Chair Jessica Rosenworcel sought comment on various ways the agency could implement the statute and adopted a rule accordingly.
But this week, the U.S. Court of Appeals for the Eighth Circuit struck down that rule, finding that the Rosenworcel FCC overstepped the limits on its statutory authority.
FCC Chairman Brendan Carr issued a statement saying, “Back in 2023, I dissented from the Biden FCC’s decision to adopt sweeping and unlawful ‘digital equity’ rules.”
This week’s court ruling will have the most impact on the government’s Broadband, Equity, Access and Deployment (BEAD) program. DEI is structurally embedded in BEAD with the word “equity” literally in the name.
Currently, the $42.5 billion BEAD program has a huge slush fund of about $21 billion in left-over monies after so many awards went to cheap satellite broadband instead of more expensive fiber. The Infrastructure Investment and Jobs Act, which established BEAD, made clear that non-deployment funds be spent on such things as broadband adoption programs, affordability initiatives and digital literacy and workforce development.
The National Telecommunications and Information Administration (NTIA) has not determined what it’s going to do with the non-deployment funds and keeps stalling on making a decision. But after the new court ruling, those funds will not be spent in any way that takes into account digital equity under the former FCC’s rule.
The ruling is a win for the Carr FCC and the Trump Administration, which have been on a mission to stamp out Diversity, Equity and Inclusion (DEI) rules wherever they can.
Carr wrote, “Now, the FCC is focused on advancing our Build America Agenda and ensuring that regulated entities do not discriminate, including through our efforts to end invidious forms of DEI.”
Predictably, telecom industry groups celebrated the overturning of the digital equity rule.
“ACA Connects thanks the Eighth Circuit Court of Appeals for heeding our arguments on behalf of independent operators about the unwarranted and illegal overreach of the FCC's digital discrimination rules," said Grant Spellmeyer, President and CEO of America's Communications Association. "Today's levelheaded decision vacating the Commission's unjust order corrects an unprecedented mistake by the Commission that would have overregulated every corner of the internet marketplace.
Joe Kane, director of broadband and spectrum policy with the think tank Information Technology and Innovation Foundation (ITIF), said, “The court recognized that Congress did not authorize the FCC to become a free-floating civil rights enforcer.”
Digital redlining
The telecom industry has been accused of digital redlining for decades. Digital redlining is the practice of declining to provide high-quality internet service to certain neighborhoods based on demographic factors such as income, race or location.
In 2023, the Rosenworcel FCC adopted the (now vacated) rule to combat digital redlining and other forms of discrimination as required by the IIJA.